1

Energy Efficiency Program Status

Jay Zarnikau

Frontier Associates

On Behalf of the

Electric Utility Marketing Managers of Texas (EUMMOT) Organization

July 2004

2

Outline

2003 Program Activity Residential and Small Commercial Sector Activities

Measures Being Installed Demand Savings Incentive Costs per kW

Large Commercial and Industrial Sector Activities Measures Being Installed Demand Savings Incentive Costs per kW

Activities in Non-Attainment Areas Actions Taken to Enhance Program Effectiveness Outlook for 2005 and Beyond

3

2003 Achievements

Energy efficiency programs offered by the investor-owned electric utilities in Texas in 2003 resulted in about 150 MW of demand reduction and over 370 GWh of annual energy conservation.

This exceeds the demand reduction goal for energy efficiency programs established by the State Legislature by about 11%.

The Demand Goal was 135 MW, achievements were 150.7 MW.

Administrative costs were held to a comparatively low share of total program costs – in the 8% range.

4

2003 Program Activity

kW Achieved by Program

Hard To Reach SOP6%

Other Programs13%

Res/SC SOP17%

C&I SOP22%

Energy Star Homes MTP

32%

AC Distributor MTP10%

Energy Star Homes MTP

AC Distributor MTP

C&I SOP

Res/SC SOP

Hard To Reach SOP

Other Programs

5

Residential Sector Achievements

Budgets are quickly committed. Small project set-asides are working well in stimulating

program participation by smaller local providers of energy efficiency services.

Hard-to-Reach goals are achieved (HTR savings exceed 5% of the total demand reduction).

A wide variety of measures are being completed, although a few (like duct efficiency and air infiltration improvements) dominate.

Programs are cost-effective. The Energy Star New Home program has been particularly

successful. CenterPoint and TXU Electric Delivery. continue to win EPA awards for their efforts in this area.

6

Number of Installations: Res/Sm Comm and HTR SOPs

0

10,000

20,000

30,000

40,000

50,000N

um

be

r o

f In

sta

llati

on

s

7

Demand Savings: Res/Sm Comm and HTR SOPs

0

4,000

8,000

12,000

16,000

20,000kW

Sav

ings

8

Incentives Paid per kW Savings: Res/Sm Comm and HTR SOPs

$0

$400

$800

$1,200

$1,600

$2,000$

pe

r kW

9

Commercial Sector Achievements

Some programs were under-subscribed in 2003, so the utilities initiated a number of steps to increase program activity. These initiatives appear to be working.

A wide variety of measures are being completed. Programs are cost-effective. Demand reduction is being achieved at a

much lower cost than in the residential/small commercial sector.

10

C&I SOP: Numbers of Installations

0

100

200

300

400

500

11

C&I SOP: Demand Reduction

0

4000

8000

12000

16000

20000

kW

12

C&I SOP: Incentives Paid per kW Savings

0

100

200

300

400

500

600

700

Do

llar

s p

er k

W

13

Activities in Non-Attainment Areas

Grand Totals by Non-Attainment,

Near-Non-Attainment, & Other 'Attainment' Counties

kW KWh % kW % KWh Total Non-Attainment 108,008 239,707,635 74% 68%

Total Near-Non-Attainment 17,134 34,947,559 12% 10%

Total Other 20,609 75,708,025 14% 22%

Totals 145,751 350,363,219

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Actions Taken to Enhance Program Effectiveness

Program activity in the C&I Sector was lower than anticipated in 2002, so a number of new program templates were undertaken in 2003 to increase C&I participation.

These new program efforts are paying off. Many of the utility C&I Standard Offer Programs are already fully subscribed this year. The new market transformation programs are off to a good start.

Small project set-asides are succeeding in promoting interest and participation in the programs among smaller local contractors.

15

Outlook for 2005 and Beyond

Update deemed savings values, as appliance and equipment standards change.

Continue outreach activities. We expect continued growth in program activity in the C&I sector. We are optimistic that, absent major changes in the program structure

or goal, that the programs will continue to promote sufficient energy efficiency activity to meet their peak demand goals.