1. TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005 1 TOU for Tenants: Pay for What and When you Use Electricity Joseph S. Lopes Senior Vice President Applied Energy Group, Inc. Hauppauge, NY www.appliedenergygroup.com

2. TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005 2 Background About 400,000 of the 3 million apartments in NYC and Westchester County (northern suburb) are unmetered in master-metered multifamily residential buildings: –One utility “master” meter for all apartments (typical building/complex has 100 - 400 apartments, some up to 3,000) –Utility reads master meter and bills building, who collects electric charges from tenants –Apartments are unmetered so electric use collections based on apartment size – not use! –Electric charges included in building common area charges and billed as rent or maintenance charges –Con Edison offers a bulk rate for master-metered residential buildings that is 30% less than retail rate – disincentive to convert to utility metering for apartments

3. TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005 3 Background Problem: with Master-metering: No price signal for tenants so tenants waste electricity (NYSERDA: 18-26%) Solution: Programs by New York State (NYSERDA, PSC, ISO) to respond to electric deregulation –Designed to develop metering, billing technologies and residential experience –Advanced Metering (CEM) Incentives, including submetering –Demand Response programs to provide incentive to reduce/shift from peak –Incentives and pilot projects to fund advanced energy control technology –Time-sensitive or Real-Time Pricing Pilot Programs –Evaluate response with metering analysis and participant feedback

4. TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005 4 Submetering Stage 1: Submetering –Option for building to collect from tenants in proportion to their use, rather than apartment size –Rent or maintenance bill to tenants must first be reduced to account for embedded electric charges Coops more likely to do this since rent regulation and PSC rules make submetering in rentals much more difficult –Submeters must often be installed in apartments (only place to measure usage) –New technology means small submeters that can be read remotely by powerline carrier or wireless data communications –Cost of submetering, monthly meter reading and billing typically more than offset by savings

5. TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005 5 Submetering – Price Signal Under Submetering, pay for What you use (Fair!) Usage varies much more than one might expect – even the same apartment size Studios: vary from 1500 – 15000 kWh/yr 1 BR: 3000 – 25,000 kWh/yr 2 BR: 4,600 – 30,000 kWh/yr 3 BR: 3,700 – 32,000 kWh/yr

6. TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005 6 Submetering – Price Signal Many perceive their electricity as “free” Submetering price signal is incentive for reducing waste and more efficient energy usage –Tenants respond by using less and investing in efficient appliances over time – savings persist! Within the same building, submetered apts. Used 39% less than non- submetered apts. (renters)

7. TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005 7 Time-of-Use (TOU) – Price Signal Submetering –Under typical Submetering plan, master-meter bill costs typically allocated based on resident monthly kWh at a flat rate (cents/kWh) –Building master-metered bill typically has a more complex rate – peak period (demand) charges for delivery (20-30% of bill) –When you use energy MATTERS! Stage 2: Time-of-Use (TOU) pricing - Pay for When you use energy! –Most advanced submetering systems are capable of interval data collection, so TOU reading/billing is feasible at little/no additional cost

8. TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005 8 Better Price Signals for Submetering Two residents using the same monthly kWh may contribute differently to costs

9. TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005 9 Time-of-Use (TOU) – Price Signal Stage 2: Time-of-Use (TOU) pricing - Pay for When you use energy! –Reduce building electric costs and utility costs if you shift/reduce demand –Provide incentives for residents to shift away from utility and building peak –Residents need Information and incentive to help them respond: energy and TOU tips The right rate structure is needed!

10. TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005 10 TOU Pilot Program Components New Rate Design has same total cost but prices vary by time period matching: –Utility System Peak Period (2-6pm) - Weekdays –Customer/building peak (6-10pm) – Critical Day Technical assistance at no cost –Workshops, Information, analysis –web site www.apartmentenergytips.com Subsidized billing costs Provide passive signals and alerts during critical peak periods

11. TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005 11 TOU Program Rate Structure Rate Structure Design –3 time periods: Peak, Shoulder, Off-Peak –Current rate averaged app. 15 ¢/kWh last summer –Peak (2-6 pm weekdays, 2-10 pm critical days) about 30¢/kWh –Shoulder Period (10-2, 6-10 weekdays except only 10-2 on critical days) about 20¢/kWh –Off-peak about 10¢/kWh –Average resident would pay the same if they did not change their pattern of use –Most Residents will pay a little less, some may pay a bit more if they have a very peak-oriented usage pattern

12. TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005 12 TOU Program Rates Weekdays -----------------------------  Peak Hours: 2-6 pm (red) Shoulder 10am-2pm, 6-10pm (yellow) Off-Peak 10pm-10am (green)  --------- Weekends/Holidays No Peak hours Shoulder 6-10pm (yellow) Off-Peak 10pm-6pm (green) TRAFFIC LIGHT GUIDE TO TOU Caution RED: Stop; YELLOW: Caution; GREEN: Go !

13. TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005 13 TOU Program Rates Critical Day (up to 5 “peak” days per month) ------------  Peak Hours: 2-10 pm (red) (extended from 2-6 pm) ~ 30 c/kWh Shoulder 10am-2pm, (yellow): ~ 20 c/kwh Off-Peak 10pm-10am (green) ~ 10 c/kwh TRAFFIC LIGHT GUIDE TO TOU Caution RED: Stop; YELLOW: Caution; GREEN: Go!

14. TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005 14 TYPICAL WEEKDAY ENERGY PROFILE  Brooklyn, NY Coop Case Study: 1225 Apts, with 825 shareholders (owners), 400 renters (not billed on submeter)  Weekday and peak/critical day typical apartment hourly profiles, compared to TOU rate periods and price levels

15. TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005 15  Weekend day typical apartment hourly profiles, compared to TOU rate periods and price levels TYPICAL WEEKEND DAY ENERGY PROFILE

16. TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005 16 TOU Pilot Case Study Results  During July shadow billing, 55% of TOU participants (below) would have saved (avg $2 = 3%) vs. only 46% of non-parts. ||||||||||||

17. TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005 17 TOU Pilot Case Study Results  During Fall Month (below) shadow billing, 65% of TOU participants would have saved (avg $3, 6%) vs. 51% of non-parts. ||||||||||||

18. TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005 18 TOU Pilot Case Study Results  Annually, about 57% of participants would have saved on TOU rate vs. flat rate last year, based on shadow billing: More save in Spring/Fall, less in Summer.

19. TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005 19 TOU Pilot Case Study Results Building (355) with High Percentage (87%) of Participants vs. Building (193) with Low Percentage (57%) of Participants  Average Weekday: Bldg with more participants has lower overall use and lower kW peak |  Peak Period->|  Average Weekday load profile dips for high participant building at 2pm start of peak period

20. TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005 20 TOU Pilot Case Study Results Building (355) with High Percentage (87%) of Participants vs. Building (193) with Low Percentage (57%) of Participants  Peak Day (91 degrees): Bldg with more participants has lower overall use and much lower kW demands during peak and evening |  Peak Period->|  Peak Day load profile dips for high participant building at 2pm start of peak period Reduction in usage more significant on Peak Day than Average  Weekday

21. TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005 21 TOU Pilot Case Study Results Building (355) with High Percentage (87%) of Participants – Weather sensitivity of Daily kWh = 44.3 kWh/CDD65

22. TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005 22 TOU Pilot Case Study Results Building (193) with Low Percentage (57%) of Participants – Weather sensitivity of Daily kWh = 51.2 kWh/CDD65 16% more weather sensitive than high-percentage participant building Base load nearly the same as High- Participant Building (1130 kWh vs. 1142 kWh)

23. TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005 23 TOU Pilot Case Study Results Building (355) with High Percentage (87%) of Participants – Weather sensitivity of Coin Peak (2-6pm) kW = 1.82 kW/CDD65

24. TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005 24 TOU Pilot Case Study Results Building (193) with Low Percentage (57%) of Participants – Weather sensitivity of Coin Peak (2-6pm) kW = 2.19 kW/CDD65 20% more weather sensitive than high-percentage participant building Base demand the same as High-Participant Building (44 kW)

25. TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005 25 CONCLUSIONS Submetering provides an essential price signal to apartment residents – worth 20% or more in energy savings Time-of-Use (TOU) Pricing adds a valuable additional price signal that can affect both energy and demand Simple Pricing plan with high peak to off-peak ratio (3:1) and well-defined periods can be understood and responded to by residential customers Apartment-dwellers, with fewer end uses and options, can respond to price signals and TOU rates Critical Peak Pricing element provides additional help for multifamily buildings with demand charges

26. TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005 26 CONCLUSIONS Submetered tenants (Pilot Program participants) have similar base loads but are much less weather sensitivity than non-submetered/non-participants Difference in weather sensitivity estimated as 30% for kWh and 40% for coincident peak kW demand Concepts of submetering and TOU pricing should also be applicable to Commercial master-metered units Advanced Metering for residential multifamily apartments is a cost-effective option that provides demand response and energy conservation Submetering and TOU rates, especially with Critical Peak Pricing, encourages conservation, efficiency and investment in more efficient appliances, lighting and timers

27. TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005 27 NOTES

28. TOU for Tenants: Pay for What and When you Use Electricity J. Lopes; AEIC Load Research Conference – Myrtle Beach, SC; July 2005 28 Notes