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Incentives for Utility Programs
Robert Balzar, Director
Seattle City Light Conservation
American Public Power Association
Webinar May 8, 2008
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Efficiency is a better energy choice Baltimore Sun (March 10, 2008)
Iowa needs to follow U.S. lead on energyDes Moines Register (March 11, 2008)
Thermal Power Heats Up NevadaTIME Magazine (March 3, 2008)
Corporate Social Responsibility: A Change in Climate The Economist (January 17, 2008)
Nationwide Vision on Conservation working with a public that “Gets It”
Seattle City Light CFL Campaign
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Seattle City Light providing energy efficient programs since 1977
One of the first in the nation to develop and promote conservation programs
Delivering a cost-effective energy resource
Reducing residential, commercial and industrial customer bills
Eliminating greenhouse gas emissions and other environmental impacts
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Seattle City Light conservation is Seattle’s energy resource of choice
Energy Efficiency Action Plan 2008 - 2012 Aggressive, accelerated conservation goals
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2004 2005 2006 2007 2008 2009 2010 2011 2012Year
Average MegaWatts
(aMW)
Load Growth
National Leadership Path
Current Capabilities
Recent Accomplishments
Low hanging fruit has been picked
Challenges of stringent codes and standards
Competition for customers and trade allies with neighboring utilities
What can you afford to pay?
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Seattle City Light a national leader in conservation
Incremental Conservation & Percent of Retail Sales
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10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Firs
t-yea
r Meg
awat
t-hou
r (M
Wh)
Ene
rgy
Savi
ngs
0.00%
0.10%
0.20%
0.30%
0.40%
0.50%
0.60%
0.70%
0.80%
0.90%
1.00%
Cons
erva
tion
MW
h as
% o
f Ret
ail S
ales
Commercial
Industrial & Gov't.
Residential
Conservation Pct of MWh Sold
Conservation Goals: Market
transformation to improve energy efficiency
More stringent energy codes and standards
Help customers install energy efficient products by offering financial and technical support
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2007 Energy Resources “Net Zero” Carbon Emissions
*From BPA Contract and Market Purchases. These and other operations-related GHG emissions are offset.
2007 Sources of Power
Boundary 26.9%
South Fork Tolt0.4%
State Line Wind2.9%
Skagit Projects20.5%
Cedar Falls0.5%
Irrigation3.9%
Other Hydro0.2%
BPA Block15.7%
BC Hydro & 7 Mile 2.4%
BPA Slice26.6%
0.1%Other*
0.9%Coal*
1.1%Natural Gas*
3.5%Wind
4.6%Nuclear*
89.8%Hydro
PercentageGeneration Type
0.1%Other*
0.9%Coal*
1.1%Natural Gas*
3.5%Wind
4.6%Nuclear*
89.8%Hydro
PercentageGeneration Type
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Overriding Policy: Conservation is the Utility’s resource of first choice to meet customer energy demands
Analytical Approach: Develop Conservation Potential Assessment (CPA) for
SCL’s service territory Construct alternative conservation resource paths from
CPA for assessment in the IRP Analyze conservation paths as part of overall IRP
resource portfolios for their effect on costs and risks Develop findings and recommendations for long term
conservation resource goals and policy
Seattle City Light analytical framework for conservation resources
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Achievable Conservation Potential Seattle City Light's Service TerritoryAll Sectors, Below 60 Mills per MWh
ResidentialCFLs10%
ResidentialAppliances
4%
CommercialLighting
19%
CommercialHVAC23%
CommercialRefrigeration
4%
CommercialSpace Heat
4%
Industrial Motors /Drives10%
Industrial Other8%
CommercialOther2%
Industrial Process Heat / Furnaces
12%
ResidentialSpace Heat
4%
Commercial Other33%
Seattle City Light achievable conservation potential
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Conservation in preferred portfolio acquired at a rate of 7 aMW per year or 140 aMW over 2007-2026
Portfolio with accelerated conservation path achieved greater economic benefits & lower revenue requirements than the preferred portfolio
Study the feasibility, costs and benefits of accelerating conservation acquisition beyond the preferred option in SCL’s 5 Year Conservation Action Plan
Conservation
Seattle City Light 2006 IRP preferred portfolio
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7.07.38.0
9.0
10.0 10.0 10.0
7.3
10.1
17.3
15.3
16.5
14.913.514.0
7.07.08.0 7.0
12.1
15.815.614.4
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2007 2008 2009 2010 2011 2012Year
aM
W
Load Growth 2006 IRP 2006 IRP Accelerated 5 YR Plan ('08 IRP)
Seattle City Light alternative conservation paths vs load growth
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Utility Incentive Programs an important component of an energy efficiency program
Monetary Incentives Change Customer BehaviorTypes of Incentives Calculation per kilowatt hour of savings
Make consistent between similar measures and market segments Base in part on expected measure life Ex: All City Light Lighting Programs = $.20/kWh 1st year savings
Fixed amount payment or rebate per unit or fixture Simple to implement and understand Ex: City Light Refrigerator Recycling Program pays customer $30 per
refrigerator or freezer Payment as a percentage of job cost
Set cost caps to encourage customer stake in keeping costs down City Light MF Common Area Retrofit program pays 85% of qualifying
costs
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Utility Incentive Programs program design principles
Determine program cost effectiveness Service territory or Total Resource Cost
Includes financial incentive, program delivery, and customer share
What’s the value of savings? Previous focus on incentives centered around
cost of measures, now the shift to focus on value of savings
Pay as much as you need, but no more to meet conservation goals Pay more if the value of savings are worth more
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Utility Incentive Programs GOAL: capture energy savings and reduce overall costs
Guidelines for Effective Incentive Programs
Develop incentives specifically by sector and market Where are you trying to affect change?
Start from existing base of incentives Set incentive at certain level and see what kind of participation it
generates
Split Incentive: Who’s getting the energy savings and the benefits of cost savings? The commercial developer who sells a completed project won’t
see the long-term bill savings, so incentives can overcome these types of barriers by paying more
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Longer lived measures with long term benefits have greater benefits, more value Commercial and MF shell upgrades will last longer (30-45
years) than commercial lighting (10-15 years)
Understand Customer Needs What will get them to use energy conservation measures?
Targeted needs for residential customers and small business May need to pay more to get residents and small business
owners to install EE measures
Communicate Creatively Strategic Marketing, Communication and Outreach Plan
Utility Incentive Programs Risk overpaying to capture maximum energy savings, but avoid paying more than what the measure costs
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Energy Smart Services financial incentives and technical assistance for existing facilities and new construction projects
Commercial and Industrial Customers
Family of Measure Incentives Include:
Lighting HVAC
Water Heating / Cooling & Treatment
Compressed Air
Building Envelope Plug Loads
Data Management Industrial Process Lamps
Food Service Equipment Elevators & Escalators
Power Supply Measures
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Incentives & Simple Rebates
Standard Measures Funded Incentive Amounts(applied to first-year savings)
LIGHTING UPGRADEST-12 to T-8 or T-5 Replaced Incandescent, Exit Signs, Instant Motion Sensors, others20¢ per kWh saved
20¢ per kWh savings
HVACEfficient chillers, heat pumps, variable speed drives for fans.
Up to 29¢ kWh savings
High Efficiency Industrial Equipment Expected 15-year service life 23¢ per kWh savings
NEW: PC Power Management $8/pcEstimated savings up
to 375 kWh/PC
NEW: Hot Food Holding Cabinets Up to $500 per cabinet
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Built Smart Programbuildings designed and built to conserve resources while providing a tranquil living environment
Program Incentives: Building materials, windows, walls, ceilings Insulation and HVAC Interior and exterior common area lighting Energy efficient fans, controls, in-unit appliances,
thermostats, elevators
certified BUILT SMARTBUILT SMART standards exceed the highest recommendations of the
State Building Code for energy efficiency and comfort. Every BUILT SMART apartment and condominium building
undergoes rigorous inspection during construction. When the building is successfully completed, it is awarded a BUILT
SMART certification plaque that can be displayed in the lobby.
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Built Smart Incentive Schedule & Simple Rebates
Standard Measures Funded Incentive Amounts(applied to first-year savings)
Multifamily New Construction Common Area Lighting
Requirements:New construction residential building, gas or electrically heated
5 units or more, no limits on number of stories
$0.20/kWh saved over code in common area lighting
$25/fixture for energy efficient in-unit lights
Built SmartFull Measure Program(Market Rate and Affordable
Housing components)
Requirements:New construction
residential building
5 units or more, no more than 7 stories
Electrically heated
$0.75/kWh saved over code in wall, window, ceiling & floor insulation
$0.20/kWh saved over code in common area lighting
$25/fixture for energy efficient in-unit lights
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Refrigerator Recycling Program we pick up your old fridge...and you pick up 30 bucks
Old second appliances use three times as much energy as newer ones, significantly running up the electric bill and contributing to global warming.
Fixed rebate program: $30 per refrigerator or freezer Partnership with leading appliance recycling company
JACO Environmental Picks up the appliance from resident homes Uses a state-of-the-art process to recycle 95% of the
materials that make up the old refrigerators and freezers
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Twist & Save Program compact fluorescent bulbs to transform the lighting market
Inexpensive: Energy Star® Compact Fluorescent bulbs for less than $1 at participating retailers
Easy: No coupons or rebates forms Opportunities:
CFL Saturation Almost 3 out of 10 homes do not have at least one CFL
installed Challenges in reaching these homes include cultural and
language barriers that will require creative communication techniques to reach and persuade these customers
CFL Bulb Recycling and Mercury Concerns Take it Back Network Program City Light Recycling Bins at Service Centers
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Utility Incentives for a world-class conservation power plant
Seattle City LightConservation Resources
Click on screen to play video
conservation is Seattle’s energy resource of choicewww.seattle.gov/light/conserve
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Robert Balzar 30 years experience in engineering, marketing and utility management
Past experience: Director of Marketing and Product Development for Pinnacle Homes in Las
Vegas 21 years at Sierra Pacific Power and Nevada Power Companies, including five
years leading a team that developed and expanded the Energy Efficiency and Conservation Department
Member of: Board Member, Northwest Energy Efficiency Alliance Served on the State of Nevada Task Force on Renewable Energy and Energy
Conservation Served as a Board member of Southwest Energy Efficiency Program in
Boulder, Colorado
Education: B.S. in Electrical Engineering from the U of NV, Reno
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