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Introduction to Demand Side Management Programs

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1 Introduction to Demand Side Management Programs
Presentation to the Oklahoma Renewable Energy Council Cory Toole, P.E. 11/09/2016

2 Renewable Energy and Energy Efficiency
© Copyright 2016 CLEAResult. All rights reserved.

3 Introduction to CLEAResult
We change the way people use energy™ © Copyright 2016 CLEAResult. All rights reserved.

4 Introduction to CLEAResult (cont.)
© Copyright 2016 CLEAResult. All rights reserved.

5 Introduction to CLEAResult (cont.)
© Copyright 2016 CLEAResult. All rights reserved.

6 Introduction to CLEAResult (cont.)
© Copyright 2016 CLEAResult. All rights reserved.

7 Introduction to CLEAResult (cont.)
Oklahoma City Office 45 Employees Implementer for Oklahoma Gas and Electric Company (OG&E) Commercial and Residential Utility Demand Side Management (DSM) Programs Implementer for Oklahoma Natural Gas (ONG) DSM Program © Copyright 2016 CLEAResult. All rights reserved.

8 OG&E 2016 Goals and Incentives
Commercial and Industrial Energy Efficiency Program (CEEP) kWh Savings Goal: 62,350,649 Expected Incentives: $6,851,561 Home Energy and Efficiency Program (HEEP) kWh Savings Goal: 40,155,376 Expected Incentives: $7,323,047 © Copyright 2016 CLEAResult. All rights reserved.

9 ONG 2016 Goals and Incentives
Savings Goal: 250,000 Therms Expected Incentives: $237,500 © Copyright 2016 CLEAResult. All rights reserved.

10 Demand Side Management (DSM) Programs
Why do utility companies pay their customers to use less of their product?

11 About electric and gas utilities
A company that engages in the generation, transmission, and distribution of electricity and/or natural gas Typically serves geographically distinct territories Composed of different consumer classes based on the service they provide – commercial, residential, or industrial Utilities are natural monopolies Facilitator Notes and Content Regulation has created utilities where a natural monopoly exists (defined on the slide) and the controlled resource is a “public good.” Natural monopoly When the largest supplier in the market has an overwhelming cost advantage over competitors Supplier has ability to control and set prices Other natural monopolies include railroads, pipelines, and water systems Results in government regulation © Copyright 2016 CLEAResult. All rights reserved.

12 “Regulatory Compact” Utilities were obliged to provide universal, adequate service and to submit themselves to rate and service regulation so customers would be protected from the abuses of monopoly power (high prices and poor service). States agreed to afford companies an opportunity to earn a reasonable return on prudent investments. Regulation was imposed as a substitute for competition. Facilitator Notes and Content Regulation has created utilities where a natural monopoly exists (defined on the slide) and the controlled resource is a “public good.” State regulators have historically set prices at rates that reflect infrastructure costs (e.g., building power plants, putting up wires, laying pipe). Most utility customers today are limited to a single power provider, but this wasn't always the case. In the early days of the electric power market, independent generators and distributors competed with each other for customers turning streets into a jungle of power lines. Confusion gave way to consolidation in the 1920s. This decade also saw the rise of large electric power holding companies. By 1932, the eight largest holding companies controlled 73% of the nation's investor owned electric business. Holding companies typically owned several local subsidiaries in different states. Because there was little effective state regulation, and no federal regulation, national holding companies were effectively unregulated. Some holding companies overcharged subsidiaries for equipment and service knowing that the subsidiaries had to pass their expenses on to customers. These abuses were corrected with the passage of the 1935 Federal Power Act and the Public Utility Holding Company Act (PUHCA) ( See also © Copyright 2016 CLEAResult. All rights reserved.

13 Oklahoma Corporation Commission
Ensures public utilities provide safe, adequate, and reliable utility service Regulates utility rates and services Provides mandates that affect utility delivery and cost The Corporation Commission was established in 1907 by Article 9 of the Oklahoma Constitution, and the First Legislature gave the Commission authority to regulate public service corporations, those businesses whose services are considered essential to the public welfare. The legal principle for such regulation had been established in 1877 when the United States Supreme Court upheld a lower court ruling, Munn v. Illinois, that when a private company’s business affects the community at large, it becomes a public entity subject to state regulation. Initially, the Corporation Commission regulated transportation and transmission companies, mostly railroads and telephone and telegraph companies.  The Commission also was directed to collect and maintain records of the stockholders, officers and directors of all corporations chartered or licensed to do business in Oklahoma (about 12,500 at statehood). As the state grew, the records collection task became larger than one agency could handle.  The Commission kept authority for public service companies, and responsibility for other corporations was allocated to the Secretary of State and other state commissions and agencies according to business type. The Second Legislature put oil pipelines under regulation. The Commission began regulating the prices of telephone calls in 1908 and telegrams in April Regulation of water, heat, light and power rates began in 1913. The Commission began regulating oil and gas in 1914 when it restricted oil drilling and production in the Cushing and Healdton fields to prevent waste when production exceeded pipeline transport capacity. In 1915, the Legislature passed the Oil and Gas Conservation act. This expanded oil and gas regulation to include the protection of the rights of all parties entitled to share in the benefits of oil and gas production. Also in 1915, the Legislature declared cotton gins to be public utilities and extended Corporation Commission authority over utility companies to include practices as well as rates. While the basic regulatory responsibility of the Corporation Commission has remained intact, many changes in state and federal laws have changed what is regulated.  The Commission presently regulates public utilities, except those under municipal or federal jurisdiction or exempt from regulation; oil and gas drilling, production and environmental protection; the safety aspects of motor carrier, rail and pipeline transportation and the environmental integrity of petroleum storage tank systems. The federal Motor Carrier Act of 1995 ended state authority for economic regulation (rates and routes) of intrastate transport of most commodities, but the Corporation Commission continues to enforce requirements for operating authority and insurance. The Corporation Commission also enforces federal regulations for underground injection of water and chemicals, underground disposal of certain oil and gas waste fluids and remediation of soil and groundwater pollution caused by leaking petroleum products storage tanks. The Corporation Commission has judicial, legislative and administrative authority. Three commissioners elected by statewide vote rule on all regulatory matters within Corporation Commission jurisdiction. Commission orders are appealable only to the Oklahoma Supreme Court. The Corporation Commission comprises three commissioners who are elected by statewide vote to serve six-year terms. The terms are staggered so one commissioner vacancy occurs every two years. The election pattern was established when the Commission was created by the state constitution. The first three elected commissioners drew lots for two-year, four-year and six-year terms. In-term vacancies are filled by gubernatorial appointment. Appointed commissioners serve until the next regular election. Fifteen commissioners have been seated by appointment. © Copyright 2016 CLEAResult. All rights reserved.

14 Electricity Distribution Diagram
Power Plant Power Grid Transmission Substation Distribution Substation Distribution System Service Connection Power plant - Electricity starts here, produced by spinning generators that are driven by water, a diesel engine, or a natural gas or steam turbine. Steam is made by burning coal, oil or natural gas or by a nuclear reactor. When needed, extra power is brought into an electric system from plants outside the area. Power grid - Electricity is carried over a network, or "grid," that connects power plants to a substation and from there to distribution lines that take the power to homes or businesses. Transmission substation - These facilities look like giant erector sets connected to wires from the power plant. Here large transformers increase voltage from thousands to hundreds of thousands of volts so the power can be sent over long distances. Distribution Substation - You see them around towns and cities. They are those small fenced-in areas that have electric lines coming in and going out. Inside these fenced-in areas are transformers that reduce voltage to a lower level so the power can be sent out on distribution lines to the surrounding community. Distribution system - Includes main or primary lines and lower voltage or secondary lines that deliver electricity through overhead or underground wires to homes and businesses. You see these lines every day on poles alongside roads and streets. Service connection - That's the line that connects to the meter on the side of homes and businesses. The meter is used to determine how many kilowatt-hours are used by each customer. © Copyright 2016 CLEAResult. All rights reserved.

15 Natural Gas Distribution Diagram
Wellhead Treatment facility Storage facility Compressor station High-pressure pipelines Regulation station Distribution system Individual pipe and meter connection Safety values Natural gas systems are relatively simple in concept. What's complicated is designing them to be as safe and secure as possible for use as an energy source in homes and businesses. The simple concept is: You take the gas out of the ground and use pipelines to get it to customers. Wellhead - Natural gas is flushed out of the ground. The pressure of the gas where it exists underground pushes it to the surface after the well is drilled. Treatment facility - Once out of the well, the gas is treated to remove any sand, dust, contaminants, water or condensed petroleum liquids. Storage facility - Natural gas is compressed and injected into underground storage facilities (like depleted salt caverns or old gas fields) between April and October when demand is low. In colder weather months, the gas is brought back into the distribution system as needed. Purists in the business like to say it's "drawn out.“ Compressor station - Increases gas pressure to keep it moving through a network of underground pipelines. High-pressure pipelines - Transport gas to distribution systems, often across long distances. The pipelines can range up to 48 inches in diameter. Regulator station - Reduces the pressure of the gas as it enters the distribution system and injects an odorant into the gas so it can be smelled in the event of a leak. Natural gas otherwise is odorless. Distribution system - Takes the gas from the regulator station to cities, towns and communities. Individual pipe and meter connection - Connects homes and businesses to the distribution system. A gas meter measures the amount of gas consumed by the customer. Safety valves - Used to shut off gas to specific areas during construction and emergencies. © Copyright 2016 CLEAResult. All rights reserved.

16 Supply vs demand side management
DSM Conservation Demand Response Price Incentive Load Sharing Energy Efficiency SSM Power Plant Production Plant Peaking /Interruptible Pricing and Spot Markets METER Supply Side Management refers to everything on the Utilitie’s side of the meter Generation Poles, Wires, Transformers, Substations, Switches Demand Side Management refers to everything on the end user/customer side of the meter. Appliances, Lighting, technology basically energy using equipment © Copyright 2016 CLEAResult. All rights reserved.

17 Supply side management
Increase Supply Capacity Supply Side Management Supply Side Management: Measures taken by the Utilities on power plants and transmission and distribution lines in order to minimize the cost of energy for a given level of reliability, and to reduce the impact on the environment. Improve Supply Delivery: Ensure sustained availability of reliable energy Increase Supply Capacity: Meet increasing electricity demand Decrease Supply Costs: Mitigate environmental impact of energy production and supply Improve Supply Delivery Decrease Supply Costs © Copyright 2016 CLEAResult. All rights reserved.

18 Supply side opportunities
Energy resources Clean coal technologies Fuel substitutions Renewable energy Power generation and energy conversion Operational improvements in existing plants Upgrading generation units Cogeneration Transmission Data monitoring Load aggregation Substation Improvements Distribution Resources: Clean Coal Technologies (CCTs) Overall CCTs improve the efficiency of coal-based electricity generation, with benefits such as: – Increased electrical power output per unit of coal fired; – Reduced environmental impact per unit of coal fired, possibly in conjunction with partial or total removal of CO2 and SOx emissions. Fuel Substitution The process of substituting one fuel for another – The combustion of natural gas generally can be carried out much more efficiently than oil or coal • Renewable Energy – Wind, solar, geothermal – Biomass might provide important energy supplies at competitive/ moderate cost Power: Operation Improvement in Existing Plants Improvements possible where equipment and systems are not run at top efficiency include: – Maintenance – Data and performance monitoring – Combustion - Fluid bed combustion control – Upgrading Existing Power Supply Upgrading Generation Units It can improve reliability, increase output and reduce environmental impact through: – Installation of new and improved burners – Extra flue gas heat recovery – Additional heat recovery from hot blow-down water Cogeneration Production of heat as well as electricity from a single fuel source (combined heat and power - CHP) – Benefits: • Economic • Environmental • Enhanced reliability of electricity supply Transmission They operate at high voltage Issues: – Thermal limitations – Voltage fluctuations – System operating constraints Data monitoring need for comprehensive information on all system elements: – Computerized systems available (SCADA) Load Aggregation Energy users band together to secure better prices. – Desired effect is a flatter overall load profile, a higher load factor and ultimately lower per unit energy costs for members of aggregate group Substation improvements Higher efficiency equipment – Transformers – Other key equipment: switchgear, alarms and controls. Distribution Upgrading Distribution Systems – Issues: variable losses, fixed losses and non-technical losses – Solutions: increase the cross sectional area of lines / demand-side management… • On-Site Generation – Interesting when nearing maximum level of demand • On site “self-generation” reduces demand on the grid. • Reduces transmission losses from a distant power source. Power factor improvement – Use foam on the beer analogy – it’s beer but it’s not really drinkable beer Power factor = the ratio between the useful load and the apparent load for a system: – Incentives (or penalties) to encourage power factor improvement • Energy to be used more efficiently (at higher power factor) • Less power needs to be generated Transport Lots of energy efficiency improvements possible • Pipelines: – Oversized , inappropriate motors – Opportunity for using high efficiency motors • Road transport: – Tire pressures checked regularly – Planning of routes and loads Upgrading distribution systems On-site generation Power factor improvements Transportation of fossil fuels Pipeline improvements Road transport © Copyright 2016 CLEAResult. All rights reserved.

19 Demand side management
Energy Efficiency Demand Side Management Demand Side Management: Demand-side management involves reducing electricity use through activities or programs that promote electric energy efficiency or conservation, or more efficient management of electric energy loads. Demand Response: Reducing capacity during peaks – shifting loads Energy Efficiency: Technology / Equipment to provide the same outcome with less work / energy use Conservation: Turning things off – Putting on a sweater – increasing the temperatures during the summer. Demand Response Conservation © Copyright 2016 CLEAResult. All rights reserved.

20 DSM – load shape objectives
Peak Clipping: the reduction of utility load primarily during periods of peak demand Conservation: the reduction of utility loads, more or less equally during all or most hours of the day Load Building: the increase of utility loads, more or less equally, during all or most hours of the day Valley-Filling: the improvement of system load factor by building load in off-peak periods Flexible Load Shape: refers to programs that set up utility options to alter customer energy consumption on an as needed basis, as in interruptible/curtailable agreements. Load Shifting: the reduction of utility loads during periods of peak demand, while at the same time building load in off-peak periods. Load shifting typically does not substantially alter total electricity sales. © Copyright 2016 CLEAResult. All rights reserved.

21 Using rates to support DSM
Time of use Pricing Electricity prices are set for a specific time period on an advanced or forward basis. Prices paid for energy consumed during these periods are pre-established and known to consumers in advanced. Critical Peak Pricing Time-Of-Use prices are in effect except for certain peak days, when prices may reflect the costs of generating and/or purchasing electricity at the wholesale level. Real-time Pricing Electricity prices may change as the market changes. Price signal is provided to the user on an advanced or forward basis, reflecting the utility’s cost of generating and/or purchasing electricity on the wholesale marked Time of Use: Use energy at night at different times of the day to receive a discounted per KWH rate. Critical Peak Pricing: You get a lower KWH rate all year – but the utility can call you and declare a Critical Peak time and if you use power during that time it will be at a much higher rate. Usually during an extreme weather event or system malfunction/emergency. Real Time Pricing: requires a smart meter – but the customer pays the price of the wholesale marketing – aim to use energy when demands are lower. Peak Load Reduction: Pre determined contract. Utility can call customer to curtail in Critical time. Reduces a utility’s planned capacity obligation. Peak Load Reduction Credits For consumers with large loads who enter into pre-established peak load reduction agreements that reduce a utility’s planned capacity obligation. © Copyright 2016 CLEAResult. All rights reserved.

22 Environmental Concerns Limits System Expansion
Why drive DSM? Supply Side Management Demand Side Management Environmental Concerns Economic Concerns Limits System Expansion Cost management DSM is about half the cost of additional supply Limits on system expansion Permitting challenges for new power plants, T&D lines, pipelines make expansion very difficult Economic security Lower energy use helps the bottom line, lowers risk to energy price fluctuations Environmental concerns Emissions, emissions, emissions … Cost Management © Copyright 2016 CLEAResult. All rights reserved.

23 Managing the demand DEMAND TIME (in years) NEW POWER PLANT
ENERGY EFFICIENCY PROGRAMS Demand – megawatts TIME (in years) © Copyright 2016 CLEAResult. All rights reserved.

24 Public Service Commissions
Ensure public utilities provide safe, adequate, and reliable utility service Regulate utility rates and services Provide mandates that affect utility delivery and cost Energy Efficiency programs are typically mandated by local Public Service or Utility Commissions © Copyright 2016 CLEAResult. All rights reserved.

25 Why do regulatory bodies pursue EE?
Dependent on the local politics for exact explanations, however most include one or more of the following: Lowest cost planning Environmental benefits Customer savings System stabilization Economic development © Copyright 2016 CLEAResult. All rights reserved.

26 Why do regulatory bodies pursue EE?
Dependent on the local politics for exact explanations, however most include one or more of the following: Lowest cost planning Environmental benefits Customer savings System stabilization Economic development It CAN be cheaper than increasing capacity (power plants) and transmission systems (power lines, etc.). Much of the cost of the programs is incentives Paid back to ratepayers who participate © Copyright 2016 CLEAResult. All rights reserved.

27 Cost benefits VS When a customer asks….why would a utility company ask that I use less of their product??? Energy efficiency is one of the quickest and cheapest ways to increase the amount of energy available for use. In contrast, building new power plants is expensive and requires years of paperwork before groundbreaking can happen. New report issued by ACEEE March EE costs utilities 2 to 3 times less than traditional power sources. More utilities now provide both electricity and related services to help customers reduce their electric bills. Such services also have a social benefit: Emissions of carbon dioxide are reduced, slowing global warming. Using DSM, utilities can affect the amount and timing of customer electricity use. They can reduce the amount of electricity use by improving the technical and operational efficiency with which customers use electricity. The timing of electricity use can be influenced by direct-load control programs in which the utility controls equipment at the customer site and by electricity-pricing options that vary the price of electricity with time of use. Why do our utility clients run energy efficiency programs? While the programs are generally required, utilities run programs because EE (or DSM) costs less than supply For example, let’s say that Meeting projected load growth would require a new power plant, transmission lines, and fuel that costs $1 Billion. Program history now suggests that meeting that same amount of load growth with EE would cost between $300-$500 million However, there are certain assumptions that are part of that scenario What do ratepayers get for their investment? For a power plant, if you don’t spend the $1 billion, you don’t get a power plant; if you do spend that money, you do (generally) For energy efficiency, if you don’t spend any money, you still get savings (background savings); if you do spend the money, you do get savings that need to be more than the background savings Are costs “prudent and reasonable?” © Copyright 2016 CLEAResult. All rights reserved.

28 Cost benefits Source: © Copyright 2016 CLEAResult. All rights reserved.

29 Where does the money come from?
Ratepayers pay for those energy efficiency programs, with three possible components – Usually line item in their bills © Copyright 2016 CLEAResult. All rights reserved.

30 Where does the money go? LOST REVENUE RECOVERY PROGRAM COSTS
PERFORMANCE BONUSES Costs for program implementation and administration, as well as incentives Utilities get reimbursed for lost revenues used to pay for their investments Ratepayers pay for those energy efficiency programs, with three possible components Program costs – costs for program implementation and administration, as well as incentives Lost revenue recovery – utilities get reimbursed for lost revenues used to pay for their investments (i.e., pay back their loans on capital assets) Performance bonuses – a “sweetener” to make EE a profit center, just as supply side investments can be A “sweetener” to make EE a profit center, just as supply side investments can be © Copyright 2016 CLEAResult. All rights reserved.

31 Other benefits of DSM programs
Reduces harmful power plant emissions Reduces customer needs for power resulting in less power plant construction Financial savings for customers Natural resource conservation Facilitator Notes and Content When a customer asks….why should I save energy? Provide them with a list of these benefits! Job creation Health benefits of cleaner environment Cost savings to the health care delivery system © Copyright 2016 CLEAResult. All rights reserved. Module 2: Utility 101/EE 101, 5/08/08

32 Measure of Success Based on the drivers in the locations, most commissions have benefit cost tests that determine the overall impact that programs have on… Everyone – Total Resource Cost Test (TRC) Participants – Participant Cost Test (PCT) The Utility – Utility Cost Test (UCT/PACT) Ratepayers – Ratepayer Impact Measure (RIM) Society as a whole – Societal Cost Test (SCT) These are all ratios of Benefits/Cost Ratio greater than 1.0 means more benefits than cost. © Copyright 2016 CLEAResult. All rights reserved.

33 Layers of control and evaluation
Savings (impact) of programs Third Party Evaluation TRM (often developed by third parties) Cost of program delivery RFP’s (open bid to keep costs low) Cost of Projects Customer Invoices Audits Avoided Cost of energy source Public Reporting to Regulatory bodies © Copyright 2016 CLEAResult. All rights reserved.

34 Overall industry trends
Influencers of growth: Political/economic Legislative Innovation and technology Socio/economic EXPONENTIAL GROWTH OPPORTUNITIES Visual is important to note – still in infancy. Today legislatures are telling utilities they must promote EE (impact on ROI for utilities’ revenue not known yet). Using less is the same as creating more capacity. The PUC placed burden of EE on T and D utilities to account for a % of load growth thru EE annually. Influencers of EE program growth— Increased legislative activity Greater investment in EE technology Socio-economic issues (climate change, etc.) becoming more important to people For example, public schools’ recognition that energy expenditures are the most expensive driver of Operation and Maintenance costs. © Copyright 2016 CLEAResult. All rights reserved. Module 2: Utility 101/EE 101, 5/08/08

35 Critical risks for the utilities
Utilities need cost recovery and lost revenue recovery if they can get it To do that, at a minimum, programs need to be cost effective Facilitator Notes and Content In thinking about our clients as regulated entities, CLEAResult staff need to understand the risks that they face. They are not guaranteed the ability to get funds from ratepayers. For energy efficiency program funds, certain conditions need to be met, and even if those conditions are met, there may be risks in receiving their funds. Cost recovery and lost revenue recovery are determined by the commission. © Copyright 2016 CLEAResult. All rights reserved.

36 Potential political risks
Ratepayer or other stakeholders Attacks or inquiries can come on a number of fronts: Program Performance Program Cost-Effectiveness Evaluation Results Program Design Facilitator Notes and Content As political entities, utilities also face political challenges from multiple stakeholders. Try asking new staff what challenges might be posed from stakeholders on each of the four bullets (i.e., program performance, cost-effectiveness, evaluation results, and program design). How would someone challenge whether a utility should receive funding for their efficiency programs? Cost Effectiveness – Total Resource Cost Test (TRC) Societal Cost Test (SCT) Program Administrator Cost Test (PAC) Participant Cost Test (PCT) Rate Impact Measure Test (RIM) © Copyright 2016 CLEAResult. All rights reserved.

37 Evaluation, Measurement, and Verification
CLEAResult’s role Evaluation, Measurement, and Verification Utilities must demonstrate that savings are “real” Ratepayers fund savings Independent, third-party review Is documentation credible? Were projects “business-as-usual,” or caused by the program(s)? Were programs cost-effective? We should include a discussion on how independent, third-party entities review program performance to verify that utilities should receive credit for savings achieved in the programs, and be entitled to program cost recovery and bonuses or lost revenue recovery. © Copyright 2016 CLEAResult. All rights reserved.

38 Manage Eliminate The bottom line Keep our clients out of hot water
Keep ourselves out of hot water – no chinks in the armor Hit the goals Clean and well-documented work Ensure programs are cost-effective Create good customer experience Given those political risks, there are certain things that CLEAResult must do for our clients. We are protecting our clients as well as ourselves. © Copyright 2016 CLEAResult. All rights reserved.

39 OG&E DSM Programs

40 Large Commercial & Industrial
OG&E DSM Programs Large Commercial & Industrial Lighting Retrofits and New Construction HVAC Retrofits and New Construction Compressed Air Variable Frequency Drives Retro-commissioning Refrigeration Measures Geothermal Combined Custom Measures © Copyright 2016 CLEAResult. All rights reserved.

41 Schools and Government Efficiency
OG&E DSM Programs Schools and Government Efficiency Similar Project Types as Large C&I, but applied to public schools, colleges/universities, and government agencies © Copyright 2016 CLEAResult. All rights reserved.

42 Small Business Midstream OG&E DSM Programs
Similar Project Types as Large C&I, but for customers with <150 kW peak demand Projects implemented by Contractor Trade Allies Midstream Lighting incentives offered Point of Sale through participating distributors © Copyright 2016 CLEAResult. All rights reserved.

43 Commercial and Residential Advanced A/C Tune-ups
OG&E DSM Programs Commercial and Residential Advanced A/C Tune-ups Professional tune-up by participating contractors, low cost/no cost to customer Positive Energy New Homes Incentives available to builders for homes meeting performance new home energy efficiency standards © Copyright 2016 CLEAResult. All rights reserved.

44 Residential Solutions
OG&E DSM Programs Residential Solutions Home Energy Audits, including free LED bulbs, power strips, and energy-saving recommendations Attic insulation, air sealing, windows, pool pumps Consumer Products Point of Sale lighting incentives for residential customers at local retailers (Home Depot, Lowe’s, Walmart, Sam’s, Target, etc.) © Copyright 2016 CLEAResult. All rights reserved.

45 Combination of Direct Install and Custom Measures
ONG DSM Program Combination of Direct Install and Custom Measures Incentive Payment $0.95/Therm saved © Copyright 2016 CLEAResult. All rights reserved.

46 Example Project

47 SAGE Lighting Project (Handout)
Yukon Public Schools 4 schools retrofitted with LED lighting 400,000 kWh annual energy savings OG&E incentives covered 70% of project cost © Copyright 2016 CLEAResult. All rights reserved.

48 Thank You

49 Appendix

50 Typical Metrics of Evaluation
Realization Rate The % of savings (both kW and kWh) that the evaluators deem was gained by a project Based on calculation and review of a sample of projects May also include site visits Realization rate of the sample is applied to the entire program © Copyright 2016 CLEAResult. All rights reserved.

51 Typical Metrics of Evaluation
Free Ridership Rate The % of savings that the evaluators find would have happened without program influence or incentives Based on a survey of a sample of participants Definition varies. In Arkansas, defined as “the project would have been funded and a similar efficiency installation would have occurred within 12 months.” A project may be a partial free-rider Free-rider rate of the sample is applied to the entire program © Copyright 2016 CLEAResult. All rights reserved.

52 Typical Metrics of Evaluation
Spillover Any savings that is found to have happened because of program influence, but was not attributable to a program An example might be a participant that installs a VFD compressor at a “non-program” site after doing the same project within the programs. Difficult to evaluate, we should report any spillover that we find to the program staff so they can notify the evaluators © Copyright 2016 CLEAResult. All rights reserved.

53 Typical Metrics of Evaluation
Gross Savings The savings (kW and kWh) that we report to the client Net Savings The savings (kW and kWh) that the evaluators say the utility should claim based on RR%, FR%, and spillover Net to Gross Ratio (NTG) NTG= 𝑁𝑒𝑡 𝑆𝑎𝑣𝑖𝑛𝑔𝑠 𝐺𝑟𝑜𝑠𝑠 𝑆𝑎𝑣𝑖𝑛𝑔𝑠 NTG is used in planning future program needs © Copyright 2016 CLEAResult. All rights reserved.

54 © Copyright 2016 CLEAResult. All rights reserved.


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