1. EASTERN CARIBBEAN ENERGY LABELING PROJECT (ECELP) Workshop To discuss Policy/Legislation Model to promote Energy Efficiency Standards & Labels Saint Lucia Feb 25, 2013 | Herbert A (Haz) Samuel Policies & Incentives for increasing the purchase of ENERGY-EFFICIENT APPLIANCES through Consumer Information, Engagement & Associated Measures

2. Structure of presentation 1.Incentives 2.Tariff Structures and Schemes 3.Utility activities in Customer Engagement

3. Our policy/legislation model will propose a combination of Fiscal Incentives, Financial Incentives and Disincentives. FISCAL INCENTIVES DISINCENTIVES FINANCIAL INCENTIVES

4. Fiscal (Tax) incentives  Fiscal incentives are common but may be problematic because EE definitions (in the absence of specific standards and labeling schemes) are not straightforward: o Reduced or zero duty rates are easy to apply to CFLs, but not other appliances;  Some appliances may be considered luxury items in the overall tax/revenue schemes of the national governments

5. Financial Incentives  Financial incentives should be considered – eg: rebates for replacing energy hogs with energy- efficient appliances;  Financing institutions must be encouraged to offer soft loans for purchase of energy-efficient appliances. Such incentives will need support from state budgets and multilateral agency funds to cover the differential between regular and preferential interest rates.

6. Disincentives In some cases, disincentives (taxes, fees, levies) may be appropriate – but must be carefully considered, because disincentives directly impact the individual budget (incentives on the other hand are a drain on the national budget)

7. Disincentives (cont’d) Eg: a levy could be charged on incandescent light bulbs (with proceeds directly used for EE campaigns & programmes). This may be considered a fair response to the higher environmental & social costs created by the use of the product (increased fuel importation, pollutants and GHG emissions). But this has significant potential drawbacks.

8. Disincentives (cont’d) It might be preferable simply to phase out the use of incandescents altogether and provide financial incentives (rebates) for purchase of CFLs

9. Disincentives (cont’d) An existing example is where electricity rates follow a progressive scheme with rising prices at increased consumption (more on this below). Of the seven utilities surveyed for this project, four have tariffs which charge higher prices at higher consumption bands; two have the opposite and one is flat across all consumption.

10. FISCAL INCENTIVES DIS- INCENTIVES FINANCIAL INCENTIVES The final combination of incentive types may look more like this:

11. TARIFF STRUCTURES & SCHEMES Our review looks at the existing situation of utility tariff structures  Significant variation found in approaches across the six countries (seven utilities) o Variations in treatments of non-fuel charges (energy charges), fuel surcharge base year, VAT and levies

12. Utility Non-fuel charge Fuel Charge Dec 2012 OtherVAT All-inclusive cost in Dec 2012 of 100 kWh per month 200 kWh per month 400 kWh per month APUA 0.40 0.80 00% $120.00$240.00$478.00 0.38 DOMLEC 0.578 0.54 0 0% $116.51$255.79$534.34 0.67 15% GRENLEC0.4150.67 5.00 15% $114.47$228.94$457.88 10.00 SKELEC 0.59 0.27 00% $89.00$182.50$372.50 0.65 0.68 NEVLEC 0.51 0.48 00% $105.20$205.50$401.50 0.49 0.47 LUCELEC 0.867 0.04 00% $91.00$183.00$375.00 0.917 VINLEC 0.425 0.54 0 0% $104.42$208.84$447.68 0.50 15% Electricity Tariffs and Retail Prices (Dec 2012, Residential)

13. Utility Non-fuel charge Fuel Charge Dec 2012 OtherVAT All-inclusive cost in Dec 2012 of 100 kWh per month 200 kWh per month 400 kWh per month APUA 0.40 0.80 00% $120.00$240.00$478.00 0.38 DOMLEC 0.578 0.54 0 0% $116.51$255.79$534.34 0.67 15% GRENLEC0.4150.67 5.00 15% $114.47$228.94$457.88 10.00 SKELEC 0.59 0.27 00% $89.00$182.50$372.50 0.65 0.68 NEVLEC 0.51 0.48 00% $105.20$205.50$401.50 0.49 0.47 LUCELEC 0.867 0.04 00% $91.00$183.00$375.00 0.917 VINLEC 0.425 0.54 0 0% $104.42$208.84$447.68 0.50 15% Electricity Tariffs and Retail Prices (Dec 2012, Residential)

14. Tariff Structures & Schemes (cont’d) In most cases, all domestic customers benefit from the lower rates of the initial tier, independent of their total consumption.  Our policy model will recommend a modification of this approach to conform to the VINLEC approach, where the subsidy is uniquely targeting low-income customers.

15. Six of the seven utilities do not have an independent electricity sector regulator. The exception is Dominica.  What is the status of ECERA in the region? DISCUSSION POINT:

16. CUSTOMER ENGAGEMENT Several utilities in the region (some outside of this group) are  Improving the quality of information delivered to customers, and  Making better efforts to engage their customers  LUCELEC has launched a new bill format 

17. Information & Engagement Examples  VINLEC has set up a physical showroom that has been well-received;  LUCELEC has launched a new bill format;  Others - ?

18. Information & Engagement Examples Include graphical or written information about historical energy consumption

19. Information & Engagement Example Design

21. Other Information & Engagement Examples  ANGLEC – actively using Facebook and twitter to communicate outage information, etc;

22. Other Information & Engagement Examples  ANGLEC – actively using Facebook and twitter to communicate outage information, etc;  JPSCo is about to fill a management-level social media position to increase outreach and engagement

23. THANKS FOR YOUR ATTENTION!