Workshop 2014 Residential Standard Offer Program October 23, 2013

Agenda Key Changes for 2014 Overview of RSOP RSOP – TCC Large Projects Small Projects RSOP – TNC Single Program Summary 2

3 KEY CHANGES for 2014  Sites  Residential dwellings, or additions, completed after January 1, 2012 do not qualify  TNC now a single program  Re-defined Underserved TNC  Incentive TNC  A new field to report “# of bedrooms” has been added as a required field on the customer input form  New document upload feature added to database

4 Continuing in 2014  Work schedules required for Project Sponsors completing duct efficiency and infiltration measures in Single Family projects  Changes to the Host Customer Agreement and Acknowledgement Form to include all Pre and Post CFM readings for Duct Efficiency and Air Infiltration measures and “R” Value of Existing Ceiling Insulation  All use of marketing, including social media, telemarketing, etc., must be approved by AEP prior to use

5 RSOP Overview

Residential SOP Overview  Program adheres to PUCT rules and guidelines  Internet application and reporting  Incentives paid for kW and kWh savings  AEP  reviews, approves, rejects applications  pre-approves all marketing material, including social media and telemarketing  processes Incentive Requests based on inspection results  manages programs and incentive dollars  adjusts programs as needed to meet goals

Residential SOP Overview  Project Sponsor  Enters into SOP Agreement  Follows program requirements outlined in manual  Identifies project opportunities  Markets program and negotiates terms with customer  Verifies customer eligibility – ESI ID  Explains to customer:  Role of PS, AEP and customer  HCA – Customer protection, complaint process  AEP does not provide endorsements  AEP does not pay for measures, material or labor  Installs and reports qualifying measures

8 Eligible Customers and Measures

9 Eligible Customers  Customer must be an AEP distribution customer  ESI ID begins with:  TCC ….  TNC ….  May be a customer of any Retail Electric Provider  Customers of Municipals and Co-ops are not eligible

10 Eligible Customer Sites Residential Only  Single-family  Dwellings consisting of two or less units (i.e., a duplex or less)  Multi-family  Individually-metered are residential (each unit)  Common areas and master-metered are considered commercial; not eligible Residential dwellings, or additions, completed after January 1, 2012 do not qualify for the program

11 Eligible Measures  High-efficiency A/C and heat pump retrofits  Insulation  Infiltration control (includes an upper limit on the pre-retrofit CFM reading of 4 CFM per square foot of conditioned space)  Duct sealing  Refer to Program manual for other measures

12 Eligible Measures All measures shall meet criteria defined in program manual and installation standards described in deemed savings appendix Excellent workmanship is expected  Proper materials, applications

13 Required Forms  Host Customer Agreement and Acknowledgement  Customer authorizes work  Customer verifies work complete  Customer acknowledges AEP may inspect work  Requires Pre/Post CFM readings for DT and IN  Requires existing R-value for CI  Work schedule required:  Multi-family projects  Duct efficiency  Infiltration

14 Reporting  Homes cooled with window a/c only are considered “gas” for heat type (electric space heaters are plug loads)  Measures must be reported within 45 days

15 Marketing  All marketing material, including social media, telemarketing, Craigslist, etc., must be approved by the appropriate program manager prior to use.

16 TCC - Small vs. Large Projects

17 TCC  Large Projects  Project size equal or greater than $10,000  Reserves funds for program year  Small Projects  No minimum project size  Reserves funds for 30 days  First-time participants start here

18 TCC - Small vs. Large Projects Small Projects  Smaller project size  No security deposit  Funds reserved 30 days  Max. PS Incentive:  Per request - $5,000  Per Month - $25,000  Per Year - $150,000 Large Projects  Minimum project size $10,000  5% security deposit  Funds reserved to November 30, 2014  Max. PS Incentive:  $150,000

19 TCC - Small vs. Large (cont.) Small Projects  No milestone  M&V Options  Deemed Savings  Eligible Customers  Single-Family  New participants begin here Large Projects  Milestone schedule  M&V Options  Deemed Savings  Measured Savings  Eligible Customers  Single-Family  Multi-Family

20 TCC - Large Projects: Security Deposit  5% of approved amount  Cashier’s check, Certified check, money order, or guaranteed check  Refunded when 90% of contract achieved from inspection adjusted incentive reports

21 TCC - Large Projects: Milestones  40% of contract met by May 31, 2014  75% of contract met by August 31, 2014  Failure to meet any milestone may result in contract reduction or termination

22 TCC - Incentive Payments kW kWh  Standard Incentive Rate$242$0.08  Underserved Counties$296$0.10  Load Factor Cap: For all combined kW and kWh incentive payments, incentive is limited to $627 per kW at TCC

23 TCC - Underserved Counties  Incentives paid at underserved counties rate until budget for underserved counties depleted, then paid at Standard Rate  Underserved budget included as part of the total program budget:  Large Projects$ 650,000  SmallProjects$ 650,000

24 Underserved Counties - TCC ATASCOSAEDWARDSKINNEYUVALDE BEEFRIOLA SALLEVAL VERDE BROOKSGOLIADLIVE OAKWHARTON CALDWELLGONZALESMAVERICKWILSON COLORADOGUADALUPEMCMULLENZAPATA DE WITTJACKSONMEDINAZAVALA DIMMITJIM WELLSREAL DUVALKENEDYREFUGIO

25 Incentive Payment Example Install HVAC measures resulting in savings of: 25 kW 55,000 kWh Incentive Payment if site is in regular county (different if in underserved county): $242/kW$0.08/kWh Total Incentive $ 10,450 before any limits

26 TNC

27 TNC - Incentive Payments kW kWh  Standard Incentive Rate $254$0.084  Underserved Counties $296$0.10  Load Factor Cap: For all combined kW and kWh incentive payments, incentive is limited to $658 per kW at TNC

28 TNC - Underserved Counties  Incentives paid at underserved counties rate until budget for underserved counties depleted, then paid at Standard Rate  Underserved budget included as part of the total program budget: $63,000

29 Underserved Counties - TNC BRISCOEKENT COTTLEKING DICKENSKNOX FOARDMOTLEY HALLSTONEWALL HARDEMAN

30 How Do I Participate as a Project Sponsor?

31 Participation  Review Program Manual and SOP Agreement  Determine Project Size  TCC - Determine if Large or Small Projects  1 st -time participants apply in Small Projects  Register on program website if a 1 st time user  Complete and review on-line application  All applications must be complete and ready to submit by the program submit date  Submit application via internet  Upload testing procedures, if applicable

32 Participation (cont.)  Applications will be reviewed upon receipt  Contracts will be awarded based on project sponsor qualifications, performance history, etc., to ensure program goals will be achieved with quality installations and timely reporting  Provide proof of statutorily-required insurance  Once Application pre-approved, enter into a contract with AEP to install eligible measures  Refer to Program Manual and Program Website for additional information

33 Create Application  Update and/or Complete Project Sponsor Details  Sponsor Profile  Qualification Documents  Subcontractor Information  Project Description  All fields must be completed on each form  All forms not listed here

34 Application Schedule  1 st Day to Register  TCC and TNC – October 24, 10:00 am CDT  Begin applications  Submit applications:  TNC:November 5, 10:00 am CST  TCC Large:November 6, 10:00 am CST  TCC Small:December 3, 10:00am CST

35 Implementation Schedule  January 7, 2014  TNC Reservations 10:00 AM CST  TCC Large Projects Implementation pages 10:00 AM CST  January 21, 2014  TCC Small Projects Reservations 10:00 AM CST

Implementation Schedule  ALL  Must have 2014 HCA’s prior to implementation  Must have Approved status to make reservation  Open reservation required before installations begin 36

37 Marketing AEP will not provide marketing assistance or endorsements  Use of AEP name not allowed  Exception: pre-approved Informational Brochure  Informational Brochure  Available for download on “Downloads/Tools” on program website  Any other materials must be pre-approved by program administrator (telemarketing, radio, , newspaper, flyers, social media, etc.)

38 Identify Project Opportunities Project Sponsor must:  Verify customer eligibility  Obtain Original Customer signature and date on Host Customer Agreement & Acknowledgement form authorizing work to be performed

39 Multi-family Projects  Obtain pre-approvals for Multi-Family Projects  Site  Measures  Work Schedule  Duct Description  TNC – must submit MF template to reserve MF funds

40 Install Measures Reserve funds via internet  TCC Small Projects  TNC Large Projects (TCC)– Funds previously reserved by contract Submit work schedule for duct efficiency and infiltration measures Install measures Original Customer signature and date on Host Customer Agreement & Acknowledgement form to verify completion

41 Reporting and Invoicing  Add Installations within 45 days of completion  Monthly reporting via internet  Submit Incentive Report by the last day of the month, but no earlier than the 15 th.  Inaccurate reporting results in failures  AEP will process inspection-adjusted invoice within 45 days in normal circumstances

42 Installation Inspections  Random sample of measure installations  Verify that number of installed measures equals number of reported measures  Verify measure is installed and capable of performing its intended function with a 10 year life  Verify that measures qualify and that installation standards were followed  Verify measures were reported in a timely manner

Reporting Issues  Work schedules not kept current  Installations added but not reported within 45 days of installation

44 Common Reporting Issues  Accurate reporting – measures reported not found  HCA’s and Installations done prior to application approval or open reservation  Home square footage errors (tax records not always reliable)  ALL signatures and dates on HCA’s – customer, project sponsor, subcontractor (if applicable)  Duplicate measures on invoices (review before submitting)

45 Common Reporting Issues (cont.)  Ceiling Insulation – inaccurately reporting existing R-Value; # bags reported should match CI tag  Listing a service area on application and not servicing that area  Listing a measure on application and not providing that service  Silicone sticking A/C supply registers to ceiling sheetrock and supply boot  Inspection scheduling issues  Homeowners expecting a “Bill of Sale”

46 Photo Examples of Failed Measures Duct Efficiency, Infiltration, and Insulation

47 Duct Efficiency

48 Duct Efficiency (cont.)

49 Infiltration

50 Infiltration (cont.)

51 Infiltration (cont.)

52 Insulation

53 Insulation (cont.)

54 Program Website Refer to for:  News & Updates  Latest program announcements  FAQ’s  Program Manual  Program Downloads/Tools  Program contact information

55 AEP Contact Information  TCC – Jim Fowler  Phone:   TNC – Rhonda Fahrlender  Phone: 

56 Comments and Questions……………….