1. 2009-2011 Residential Lighting: A Balanced Approach for Optimal Energy Savings ED Lighting Workshop June 2009 Presented by PG&E, SCE, SDG&E

2. 2 2009-2011 Residential Lighting: A Balanced Approach for Optimal Energy Savings Overview The Lighting Technology Balancing Act The Super Lamp (previously Super CFL) Incentives and Timelines

3. 3 2009-2011 Residential Lighting: A Balanced Approach for Optimal Energy Savings Main Programs: Residential Advanced Consumer Lighting –Upstream Specialty CFLs, Fixtures, and LEDs –Advanced LED Ambient Lighting – Primarily Recessed Fixtures and Screw-in Reflectors –Lighting Showroom – High End Fluorescent or LED Fixtures –Exchange – Turn-in Events to Exchange Plug-in Lamps –Super Lamp – Drive the creation of a light bulb technology that does not yet exist, test it, and provide rebates for it. Residential Basic CFL – Upstream Incentives For Non-dimmable Bare Spirals Lighting Measures In Nonresidential Rebate and Direct Install Programs – Fluorescent, LED, HID Lighting Market Transformation Program – Cross-program Coordination of Market Transition and Technology Advancement Strategies

4. 4 Lighting Programs – A Balanced Measure Mix Primary Objectives: –Support all cost-effective, market ready lighting technologies and their program-eligible products –Socket penetration for lamps –installation penetration for fixtures –Maximize Energy Savings, Demand Reduction, and Green House Gas Reduction In a Cost-effective Way Task At Hand: –Compose IOU forecasts of the balanced measure mix and incentives based on market, program, industry, and socket-level data.

5. 5 Balancing Various Lighting Technologies Comparing Statewide Sales Ratios to Possible Upstream Program Ratios (Quantities) It will require an extensive effort to achieve the CFL Program Share depicted on the right. Approximate Readiness for Market of Improved Specialty Bulbs is 2009-2010. Eventual Potential of Dimmable CFLs is up to 72% of sockets, but not by 2011 * Source California Residential Market Share Tracking: Published December 9, 2008. CFL Technologies – Possible Measure Mix

6. 6 Balancing Various Lighting Technologies (Cont.) Estimated phase in periods of LEDs (readiness for program at realistic prices) 2009 –Refrigerated Case Lighting –Street Lights –Task, Under Cabinet, Signs, Accent –Recessed Cans For Nonresidential 2010 –Recessed Cans For Residential, Dimmable - With Improved Beam Spread, Color, and Dimmability Replacing Halogen Downlights of 65 Watts or less, –Screw-in Reflectors, Dimmable - Mostly Spots, Replacing Halogen Reflectors of 65 Watts or less, –Exterior Residential – Porch lights, etc. 2011 –Recessed Cans Replacing Halogen with improved Beam Spread, Color, and Dimmability. –Screw-in Reflectors, Dimmable - Replacing Greater than 65 Watt Halogen, True Floods. –Ambient Hardwired Fixtures Replacing Linear Fluorescents

7. 7 IOU Super Lamp activities exemplify value of supporting lighting market Detailed Summary of the Joint IOU Plan for Advancing the Super Lamp Market 2009 –Introduce The Specification To Manufacturers And Ask Them To Build Prototypes –Conduct Research To Prepare For Marketing Most Effectively –Quality Test the First Prototypes (if any) 2010 –Continue Quality Testing Any Prototypes –Conduct Market Tests and Pilots to Confirm The Products Will Overcome Market and Socket Penetration Barriers –Determine Appropriate Introductory Per-Unit Incentives For Different Product Types That Pass Testing –Grant Allocations For Products That Pass Testing –Gauge Market Acceptance 2011 –If Applicable, Expand Allocations and Qualifying Products –Determine If and When the Introductory Per-Unit Incentive Levels Are No Longer Necessary - Reduce Per-Unit Incentives Accordingly

8. 8 Possible Per-Unit Incentive Level Ranges Specialty CFLs: Up to $1.50 above published lumen- equivalent basic CFL incentive Super Lamps: Introductory Incentive - 80% to 100% of manufacturer’s wholesale cost LED: 50% to 100% of manufacturer’s wholesale cost ENERGY STAR® SSL Specification Not Yet Out. Readiness For Market Will Depend On Meeting New Requirements. LumensUp To 0 to 799Up to $4 800 to 1,099Up to $6 1,100 to 1,599Up to $8 1,600 or >Up to $10 LumensUp To 0 to 799$2.50 800 to 1,099$2.75 1,100 to 1,599$3.25 1,600 or >$3.50 TypeUp To Hardwired Fixture$50 Screw-in Reflector$35 Estimated Ready Now Estimated Ready May 2010 September 2010 December 2010 March 2011 Estimated Ready March 2010

9. 9 Capturing immense potential in lighting requires maximizing cost-effective CFLs Our proposed portfolio mix corresponds to the technology mix within the energy efficiency potential study findings. It is not out of line to consider the need for a large portion of the portfolio to be in lighting when a consistently large portion of the opportunity potential is in lighting.

10. 10 IOU 2009-2011 Portfolios respond to the California Long- Term Energy Efficiency Strategic Plan CLTEESP: 2.1.3 Goals. #4 (page 11): “Utilities will begin to phase traditional mass market CFL bulbs promotions and giveaways out of program portfolios and shift focus toward new lighting technologies and other innovative programs that focus on lasting energy savings and improved customer uptake.” Strategies for Goal 4 (page 24)IOU Portfolio Activity 4.1 Drive advances through R&D and competitions The IOU’s Emerging Technology and Rebate Programs work closely with DOE on SSL technology transfer, CALiPER testing, L-Prize, and also with CLTC and PIER projects. 4-2: Create demand for improved lighting products through demonstration projects, marketing efforts, and utility programs The proposed Lighting Market Transformation Program will coordinate across programs to optimize market transformation strategies and practices including improved marketing and program design. It will coordinate with other programs for demonstration projects and technology assessments. 4-3: Continuously strengthen standards. Lighting and Codes & Standards programs will coordinate alignment with AB1109 and other legislation 4-4: Coordinated phase out of Utility incentives for CFLs Gradual - beginning by 2011increasing thereafter as EM&V and market status shows appropriate. 4-5: Ensure environmental safety of CFLs merging lighting solutions Aggressive efforts in limiting mercury in program products, and providing disposal education. Coordination with retailers that house collection sites, and with other agencies.

11. 11 IOU residential replacement lamp transition strategy: CFLs Basic CFLs  Consumer accepted for many applications  Widely available  IOU 2009-2011 programs have reduced focus on Basic CFLs: Smaller percentage of portfolio compared to previous years Promotional Focus Away From Basic CFLs Split Upstream Lighting into two programs, Basic & Advanced to give visibility to reduction in basic CFL presence  IOUs can leverage upstream relationships for future product development  For many consumers, a cost-effective gateway to other energy efficiency purchases  For California, a cost-effective way to achieve GHG reductions  Strategic Plan Indicates Phase Out of Promotion Should Begin by 2011, Increase Thereafter 2009 Phase Out of Basic CFL Incentives 2020

12. 12 IOU residential replacement lamp transition strategy: Specialty CFLs Super Lamp LEDs Specialty CFLs Increase Quality –Selectivity of products for allocations by quality (relative to incandescent/halogen performance) Increase Consumer Familiarity –Education and promotion, paid from the applicable program’s budgets. Increase Market Acceptance –Manufacturer signage requirements to include features and benefits of specialty products 2009 2020

13. 13 IOU residential replacement lamp transition strategy: Super Lamp Super Lamp Product does not yet exist; IOU’s working with manufacturers to develop IOUs incentives planned Goals, aimed at removing qualitative barriers to adoption, include improved start up, improved CRI, etc. Goals are technology neutral; LEDs are acceptable, as are induction, cold cathode, or other light sources. CFLs LEDs Specialty CFLs 2009 2020

14. 14 IOU residential replacement lamp transition strategy: LEDs LEDs IOUs, DOE, and CEE engaged to avoid CFL mistakes Most products tested in DOE CALiPER program do not yet meet claims or match incumbent performance Incentives upon program rollout for niche LEDs that are market ready. Energy Star Spec expected in 2009 Cost for Energy Star products likely to be very high: –Manufacturer estimates $200+ for LED vs. $10 for a Par 38 lamp; As eligible market-ready LEDs become available, IOUs will grant allocations and begin to promote ET strategies include: –Work with DOE, CEE –Prepare market: Fact sheets/field placements Super Lamp Specialty CFLs CFLs 2009 2020

15. 15 Transition timing and incentive levels will be guided by new product availability and EM&V studies ProductTimingIncentives Basic Bare Spiral Non- dimmable CFLs Gradual incentive phase out begins by between 2010 and 2011, monitoring snap back to incandescent Gradual decrease in percentage of total incentive budget, as guided by ongoing EM&V and market entry of new products Specialty CFLs Incentives for eligible lamps 2009-2011 Incentives now available; Eligible lamps could account for 38% of upstream lighting incentives by 2011 Super Lamps Roll Out Anticipated Complete By Mid 2011 Introductory Incentive High. Reduce When Costs Drop. LEDsAs Ready For Market and Qualified Through Energy Star Not yet determined. Need balance between driving sales and cost-effectiveness.

16. 16 IOU residential lamp transition strategy optimizes market/product progress—and delivers cost-effective EE Guiding principles: –Leverage years of lessons learned to deliver easy- to-use energy and GHG saving solutions in a cost- effective way –Continue and expand active support of advanced lighting options –Minimize risk, maximize opportunity