Presentation to WIEG August 7, 2008 Energy Efficiency Carol Stemrich Assistant Administrator Gas and Energy Division

Today’s Discussion Act 141 overview Key changes Structure Large Customer Programs Required contributions Types of programs for large customers Funding available for large customer programs Self-directed program requirements and approval Other Status Update Bill itemization Cost allocation Energy efficiency potential study Decoupling and utility incentives

Act 9 Versus Act 141 Key Changes  Requires IOU electric and gas public utilities to collectively create and fund statewide energy efficiency and renewable energy programs  Funds collected are deposited into a private sector account and not a state fund  Energy utilities contract, on the basis of competitive bids, with one or more persons to administer the programs  Oversight of the statewide energy efficiency and renewable resource programs was transferred from the DOA to the PSC  Temporary cap on large customer contribution  Allows for large customer self-directed programs

Structure

Contributions Required of Large Customers  Initial contribution for each customer that has been identified as a large energy customer is the amount that the customer contributed to energy efficiency and renewable resource programs in 2005  Future increase to the level of contribution  Allocation proposal and legislation  Percentage increase based on the lesser of:  The percentage increase in the energy utility’s operating revenues in the proceeding year, or  The percentage increase in the consumer price index

Programs for Large Customers Statewide FOE energy efficiency and renewable energy programs Utility-administered energy efficiency programs Voluntary utility energy efficiency and renewable energy programs Large customer self-directed energy efficiency programs

Large Customer Self-Directed Programs Funds available Maximum amount of utility funding available in any one year is the energy utility revenues that would have been collected from the customer for energy efficiency and renewable resource programs less the funds set aside for statewide renewable resource programs Aggregation of funds over multiple years is permitted Program proposals to be submitted at least six months before the beginning of the program year

Status Update Voluntary utility program proposals Large customer self-directed proposals Bill itemization report Cost recovery in rate proceedings Cost allocation proceeding Energy efficiency planning process Energy efficiency potential study Quadrennial review Request for increase in funding

Contacts Carol Stemrich Assistant Administrator Gas and Energy Division (608) Preston Schutt Business Program Manager Gas and Energy Division (608)