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Energy Optimization Overview May 11, 2009. Legislation 2.

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Presentation on theme: "Energy Optimization Overview May 11, 2009. Legislation 2."— Presentation transcript:

1 Energy Optimization Overview May 11, 2009

2 Legislation 2

3 33 Energy Optimization in PA 295 Detroit Edison must achieve the following energy savings targets: Incremental Energy Savings ~Impact to Detroit Edison –2008/9 0.30% of 2007 retail sales150,000 MWh –2010 0.50% of 2009 retail sales250,000 MWh –2011 0.75% of 2010 retail sales375,000 MWh –2012+ 1.00% of prior year retail sales500,000 MWh Subject to MPSC rulemaking and outcome of final order

4 44 The program is paid for via customer surcharges Non-residential electric customers will be assessed a monthly meter charge, estimated to be: Primary metered sites 2009 - $250 2010 - $350 Secondary metered sites* 2009 - $2.75 2010 - $3.75 *Represents an estimated average. The MPSC Temporary Order specifies that multiple per-meter charges be offered to reflect the diverse load characteristics of this class All classes will contribute toward low income residential programs Subject to MPSC rulemaking and outcome of final order. Also subject to program spending levels, program launch date and other variables. Energy Optimization Surcharges by Customer Class

5 5 Energy Optimization Program Spending & Impact To comply with legislation and ensure all customers have the opportunity to participate, programs will be offered to each customer class Programs likely to be offered include: Residential Low Income, ENERGY STAR, Appliance Recycling, Residential HVAC, Multifamily Direct Install, New Home Construction, C&I Prescriptive, and C&I Non-Prescriptive Our program will include customer education and pilot programs for future EO program development and emerging technologies Program cost will include customer incentives, program delivery and other costs Preliminary Detroit Edison EO Program Spending & Impact Program YearEst. Maximum Program Cost ($mil) Est. Annual Savings Goal (MWh) Est. Cumulative Savings Goal (MWh) 2009$33.1150,000 2010$44.2250,000400,000 2011$66.3375,000775,000 2012+$88.4500,0001,275,000

6 6 Energy Optimization Program Timeline Legislation signed MPSC temporary order EO plan filed EO Plan approved by MPSC Launch Programs October 6, 2008 December 4, 2008 March 4, 2009 June 3, 2009 Mid to Late 2009

7 EO Programs 7

8 8 Detroit Edison Energy Optimization Portfolio Integration with MichCon MichCon Portfolio

9 99 ProgramDescriptionProducts Key Delivery Channel ENERGY STAR Increase the market share of ENERGY STAR qualified products sold through retail sales channels CFLs Clothes Washers Room ACs/Dehumidifiers Retailers Appliance Recycling Provide pick-up and special drop-off events for operable, inefficient appliances and, dismantle and recycle these appliances in an environmentally safe manner Refrigerators & Freezers Room ACs Dehumidifiers Certified Recycling Agency & Retailers HVACEncourage customers to install energy-efficiency heating and cooling equipment Central AC EMC furnace motors Distributors & HVAC Dealers Low IncomeWork with existing CAP Agencies to expand their low income services and issue RFPs for vendor(s) to install energy-efficiency equipment and improve insulation levels for low income homeowners Refrigerators CFLs & Education CAP Agencies and Contractors New Home Construction Provide incentives and assistance to encourage the construction of ENERGY STAR certified homes Electrical appliances, building shell materials Homeowners, Builders/Dev. Multifamily Direct Install Provide direct installation of EE measures to residential customers living in multifamily buildings. CFLs, T-8 & T-5 lamps, LED signs, Contractors Residential Program Overview

10 10 ProgramDescriptionProducts Key Delivery Channel C&I PrescriptiveThe C&I Prescriptive Program provides incentives to Detroit Edison’s C&I primary and secondary customers for the installation of energy-efficient equipment for numerous applications Lighting HVAC Motors/VFDs Food Service Detroit Edison Account Mgrs/ Energy Partnership Equipment Dealers & Distributors C&I CustomThe C&I Custom Program provides custom incentives to C&I customers for the installation of innovative and unique energy-efficiency equipment and controls. Compressed air Process equipment Unique processes Detroit Edison Account Mgrs/ Energy Partnership Equipment Dealers & Distributors C&I RFPThe C&I RFP Program provides custom incentives to select C&I customers/markets on a very targeted and limited time basis for the installation of innovative and non-standard energy-efficiency equipment and controls. Unique processes Detroit Edison Account Mgrs/ Energy Partnership Equipment Dealers & Distributors C&I New Construction The C&I New Construction Program provides design assistance and custom incentives to customers for building more efficient new buildings and installing energy-efficiency equipment and controls that are not required by building energy codes and are above standard construction practices Lighting HVAC Building envelope Controls Architects and Engineers, Building Owners Commercial & Industrial (C&I) Program Overview

11 11 Collaboration with Other Michigan Utilities Potential areas of collaboration Include: Common database for measures and their deemed savings value Common cost effectiveness model – DSMore Similar or Consistent Programs High Level – Custom, Prescriptive, New Construction, Low Income, Multi-Family Detailed Level – Coordination of measures, incentive levels & processing, qualification & technical standards Possible joint RFP for implementation (ex: Low Income, Refrigerator Turn In, Application Processing) EM&V – range from similar approaches to combined evaluations

12 C&I Prescriptive 12

13 13 C&I Prescriptive Program Encourages C&I customers to improve energy efficiency in existing and new facilities using predetermined measures and incentive amounts. –Lighting –Motors/Pumps/Drives –HVAC equipment –Controls –Refrigeration and other Food Service equipment T-12 T-8

14 14 C&I Prescriptive Program Process Flow Program questions may be directed to Detroit Edison Account Manager or 800 Number Customer identifies qualifying measures Customer receives info on program and pursues project Incentive form is verified for accuracy Information tracked in database Customer implements project and submits incentive form Incentive payment made to customer or contractor Information tracked in database Measure, verification, sampling Customer incentive form is processed

15 15 C&I Prescriptive Program – Q & A What is the target market?All Detroit Edison C & I customers. How many measures are offered?Over 170 measures will be offered. What are the incentives? Incentives vary widely based on the measure installed (ex. perhaps $20 for a T8 fixture, $1,000 for a large HVAC roof top unit). How is the program implemented? Detroit Edison will manage the program with a third party implementation contractor who will work with our Michigan located trade allies to deliver the programs. When will the program be available? Detroit Edison will file its program with the MPSC in March 2009 and the programs will be available in mid to late 2009. How do customers receive incentives? The customer or their contractor completes and submits a rebate form (which they will find on our web site) with the appropriate documentation to receive incentive dollars. How do customer know what qualifies as a prescriptive measure? Through promotional and educational materials created for Account Managers and our web site. What if my customer’s technology is not included in the prescriptive program? The prescriptive program offers proven technologies that will help Detroit Edison achieve the mandated savings goal. Non-standard technologies could be covered in the non-prescriptive programs. How will Account Managers be kept informed of developments or changes in the program? Tactical Marketing will develop periodic updates to keep you informed.

16 C&I Non-Prescriptive 16

17 17 C&I Non-Prescriptive Programs Flexible programs that encourage C&I customers to install energy efficient measures in their facilities using custom incentives to draw out innovative and unique energy efficient equipment and controls Three non-prescriptive programs: –C&I Custom. Detroit Edison incentives for approved customer projects –C&I RFP. Detroit Edison targets certain market sector (i.e. hospitals), limited time basis. –C&I New Construction. Incentives for upgrade of whole building as a system, above current building codes.

18 C&I Non-Prescriptive Measures Policies Pre-approved engineering estimates will be used to set targets for per kW and kWh savings from each application. Incentive levels will vary over time based on costs and market need, but Detroit Edison will typically set them in one-year increments. Detroit Edison will use two tiers for Custom Program incentives. –Tier I: Uses a lower rate, focuses on established, known technologies that customers may not use without incentives. –Tier II: Higher-level tier rewards customers for using technologies that are newer, riskier, or otherwise less likely to be used. Most new technologies will start at the second tier and migrate to the first as the market accepts them. Projects may have payback period restrictions Projects may be bundled under RFP Programs Customers who self-direct will not be eligible 18

19 19 Projects reviewed. Incentive approved or rejected by Detroit Edison. First come first served basis. Customers submits application with detailed engineering study to Detroit Edison Incentive form is verified for accuracy Information tracked in database After approval Customer implements project within 6 months and submits incentive form Incentive payment made to customer or contractor Information tracked in database Measure, verification, sampling Customer incentive form is processed C&I Non-Prescriptive Program Process Flow

20 20 C&I Non-Prescriptive Program – Q & A What is the target market?Existing C&I customers utilizing more complicated systems or unique processes in existing and new facilities. How do customers apply for a custom program? Customers submit an application that must be approved by Detroit Edison. How are incentive levels set?C & I Custom  Incentives will be set using a per kW and kWh basis so that both energy and demand savings will be rewarded.  We may have other limitations to ensure equity among customers C & I RFP  Incentives will be based on the RFP issued by Detroit Edison for a narrowly defined market or technology, e.g. hospitals, schools, etc.  Incentives will be set using a per kW and kWh basis. C & I New Construction  Incentives will be based on the percent improvement above the local building code or above the ASHRAE 90.1-2004 standards as determined by DOE-2 or equivalent building simulation modeling. How will custom programs be verified? Customer programs will be evaluated by an independent firm to ensure approved application measures are installed and estimated savings are achieved.

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