AESP Magazine 2016

2016 When Two Roads Meet: The Intersection of Energy Efficiency/Demand Response & Distributed Energy ResourcesEmerging Energy Efficiency Technologies: The Fruit Keeps Growing on the TreeDriving it Home: Real-Time Measurement & Verification for Residential ProgramsHow Did You Come into the Energy Efficiency Industry?The United States of Energy Efficiency: A Regional Round UpFactoring in Efficiency: The Relationship between J.D. Power ConsumerSatisfaction Ratings and Energy Efficiency ProgramsThe Utility of the 21st Century: How Energy Services is Changing

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2016 ISSUE contentsAESP Magazine AESP BOARD OF DIRECTORS COVER STORYis printed by:Association of Energy Services Michael Volker, Corn Belt Energy, 3 When Two Roads Meet: The Intersection of EE/DR and Professionals Board Chair Distributed Energy Resources15215 S. 48th St. John Augustino, HoneywellSuite 170, Chris Baggett, APS ARTICLESPhoenix, AZ 85044 Charmaine Cigliano, Orange &Tel: (480) 704 5900 Rockland Utilities 6 Emerging Energy Efficiency Technologies: The Fruit KeepsAESP.ORG Bob Collins, Independent Growing on the Tree Electricity System OperatorEditor Sara Conzemius, Illume Advising 8 Driving it Home: Real-Time Measurement & Verification for Adeline Lui Jeff Ihnen, Michaels Energy Residential [email protected] Lark Lee, Tetra Tech Erika Lontoc, Enbridge Gas 12 How Did You Come into the Energy Efficiency Industry?AESP Publications Committee Distribution LeAndra MacDonald, Nexant 14 Factoring in Efficiency: The Relationship between J.D. PowerElizabeth Titus, NEEP, Co-chair Danielle Marquis, AM Consumer Satisfaction Ratings and Energy Efficiency ProgramsGreg Wikler, Navigant Consulting, ConservationCo-chair Sherry McCormack, SWEPCO 16 The United States of Energy Efficiency – A Regional Round UpChris Baggett, APS Mike Mernick, ICF InternationalTracy Narel, U.S. EPA Tracy Narel, U.S. EPA 19 The Utility of the 21st Century – How Energy Services is ChangingLaura Orfanedes, Fiveworx Vicki Nichols, Georgia Power Bill Norton, Opinion Dynamics INDEX LISTINGGraphic Designer Laura Orfanedes, FiveworxPaul Sawyer Sam Sirkin, Recleim AESP thanks our magazine sponsors: Cody Taylor, U.S. DOE Franklin Energy......................Inside front coverAESP STAFF Elizabeth Titus, NEEP Tetra Tech................................Page 10 Amanda Townsend, Oncor Philips.......................................Page 11 & back coverJohn Hargrove, President and CEO Lynn Westerlind, National Grid The Weidt Group....................Inside back coverSuzanne Jones, Chief Operating Greg Wikler, Navigant ConsultingOfficerClaudia Huss, Vice President, All rights reserved. Contents mayMember Relations not be reproduced by any means,Shannon King, Vice President, in whole or in part, withoutFinance & Administration prior written permission fromKim Burtraw, Director, Meetings AESP. The opinions expressed& Events by the authors do not necessarilyAdeline Lui, Director, Marketing & reflect those of AESP. AdditionalCommunications copies of this magazine may beQuinn Parker, Director, Content & ordered for $10 each, shippingResearch and handling included. ContactKara Kelly, Events Supervisor [email protected] Krone, MarketingCoordinatorApril Tourangeau, AdministrativeAssistantAshley Statt, Content Coordinator www.aesp.org | 2016 1

Get To Know YourAESP Member BenefitsRegister for AESP CONFERENCES at the member discounted rate.Over 20 BROWN BAG WEBINARS a year, all FREE for AESP members.ONSITE AND OFFSITE TRAINING COURSES IN EE SUBJECTSincluding Demand-Side Management, EM&V, Marketing, Customer Behavior,Customer Engagement, Intro to Electric Utility and Leadership Development.You can earn CEUs, too.COMPREHENSIVE SEARCHABLE RESOURCE LIBRARY withpast conference sessions, white papers, Brown Bag Webinars and more. CHAPTERS – There are 13 AESP geographic chapters. Come get to know other AESP members in your area. ■■ California Chapter ■■ Ontario (Canada) Chapter ■■ Chicago Chapter ■■ Red River Chapter (OK and TX) ■■ Evergreen Chapter (WA) ■■ Rocky Mountain Chapter ■■ Mid-Atlantic Regional Chapter ■■ Southeast Chapter ■■ Midwest Chapter ■■ Southwest Chapter ■■ Northeast Chapter ■■ Wisconsin Chapter ■■ Northwest Chapter AESP TOPIC COMMITTEES – Get involved with Topic Committees and contribute your talents in your area of expertise. The six Topic Committees that you can join are: ■■ Business Issues & Models ■■ Innovations in Tools & Technology ■■ Implementation ■■ Market Research, Evaluation & ■■ Marketing ■■ Pricing & Demand Response Greenhouse GasJOB AND RFP POSTINGS in weekly What’s New e-newsletter and website. KUDOS KORNER – Post your company news on AESP’s website forEXCLUSIVE MEMBERS-ONLY PUBLICATIONS - AESP other members to see: awards won, staff promotions, new hires, mergers,Magazine, Strategies e-magazine, and AESPecially For Members newsletter. acquisitions, new brand logo, etc! MENTORING – Looking for a mentor? Interested to mentee a professional in the industry? Embark on a mutually fulfilling mentoring relationship through AESP’s E2E Mentoring Program. MEMBER FORUM – Ask questions of other members and share answers to your work-related challenges. Connect with other members on AESP’s Member Forum or LinkedIn group.Learn More at AESP.ORG

EE, DR & DERWhen Two Roads Meet:The Intersection of EE/DR and DistributedEnergy ResourcesBy Greg WiklerINTRODUCTION appear to be driving this industry transforma- (e.g., distributed solar PV, combined heat and tion include: power, and microturbines) make up another Distributed energy resources or more ■■ Greater customer choice and demand for roughly 25 percent of the total amount.commonly known as DERs are experiencing According to a recent report by SolarCity, theunprecedented levels of growth throughout more sustainable energy options net societal benefits from DER deployment inthe United States. With state and federal pol- ■■ Increased policies and regulations to California alone is expected to be $1.4 billionicies aimed at encouraging wider adoption of per year by 2020, with the likelihood of thosea whole host of DER technologies such as reduce carbon emissions net benefits increasing significantly due to pro-rooftop solar and energy storage systems, this ■■ Search for greater shareholder value jected DER growth thereafter.growth is continuing to rise in many parts ofthe country. But with the greater adoption of through new ventures As noted, EE and DR resources representDERs comes the challenges associated with ■■ Regionalization of energy resources the largest share of the DERs in the forecasthow the effects of DERs can be managed ■■ Merging of mega-industries around period. It is important to note that regulatorywithin a complex electricity network that is policies and utility programs aimed at therapidly transforming. This transformation growth opportunities promotion of EE and DR resources have beenis primarily due to parallel policies aimed ■■ Replacement of old infrastructure in place for many years whereas many of theat modernizing the electric grid through other DERs (particularly electric vehicles andadvanced technologies and reducing carbon and transition toward an increasingly battery storage) are only now beginning toemissions from electric power production to decentralized and smarter power grid experience significant growth trends vis-à-viscombat the effects of global climate change. architecture. these same approaches. According to a recentAll the while, energy efficiency (EE) and report by the DOE, EE continues to play andemand response (DR) programs and poli- The energy industry transformation also important role in reducing carbon emissionscies that have been in place for decades are includes a wide range of strategic, opera- and improving customer end-use efficiencynow in need of transformation in their own tional, technological, commercial, envi- throughout the country, with many statesright in order to align with the broader pur- ronmental, and regulatory changes that are incorporating annual energy savings targets ofpose brought about by the rapid deployment forcing changes to the traditional strategies 1 percent or more into their energy plans andof DERs. This article highlights how EE and and business models. delivery strategies.DR programs are adapting and ultimatelymoving toward an alignment with other According to Navigant Research, DERs Significant growth is expected for DRDERs in the broader energy ecosystem. are poised to experience a significant level of resources over the next decade, brought about growth over the next decade in the U.S. In par- in part by the fact that DR has matured as aPROJECTED GROWTH OF DERS ticular, EE and DR resources are projected to market force and is increasingly being viewed contribute over 60 percent of the total amount as an important resource not only for alleviat- As the electric industry embarks on a of the U.S. DER forecast by 2024. Figure ing grid capacity constraints during peak peri-major transformation due in large part to the 1 illustrates the breakdown of this growth ods but also increasingly serving as a resourceadvent of DERs, some of the mega-trends that trend from 2016 to 2024. The chart also shows that distributed generation resources www.aesp.org | 2016 3

ibuted Electriceration Vehicles Energy Energy Distributed Electric Ef ciency Storage Generation Vehicles such that it serves as a focal point for man- FIGURE 1: U.S. DER FORECAST aging new grid needs while at the same time addressing customers’ emerging needs 150,000 brought about by the growth of DERs. SCE’s Energy Efficiency ANNUAL INSTALLATIONS (MW) Demand Response Preferred Resource Pilot has positioned DR 120,000 Electric Vehicle Charging Load as a critical element for meeting peak load 90,000 Microgrids needs at the distribution level. Finally, Distributed Energy Storage EEDavSlneepeDemcrhptgarGiynirccdoE&lVfaReefiechEccsiihcephlneoeiacnssCyrshegcatiaerngnsgintgipbnLaegotatduehsroenwds. time-based pricing Distributed Generation to optimize electric2022 2023 60,000 MicrogIrnidsHawaii, HECO faces a stiff state man- 2024 DDdeiissnatttrreiiebbruugtttyeeodd, EGinnienencrecglruoyatSdriotpionnroaggraeltaerg1e0-s0capleerscoelnatr renewable and wind, 30,000 into its grid by 2045. The company and its regulators are making plans to address the 0 enormous challenges this will create for grid 2016 2017 2018 2019 2020 2021 2022 2023 2024 stability on the islands. One of the key features Source: Navigant Research of these plans is to position DR as a load fol- lowing resource, as described earlier. Through the operation of “Fast DR” pilot programs, that can be counted on for distribution grid management needs, DR more often is now HECO is working with its customers to utilize management. According to a recent report helping to manage those needs by facilitating automation systems that can respond within by FERC, new DR policy efforts at the retail an organized deployment of various DER seconds of receiving a signal of an imbalance level in conjunction with other established and solutions, including EE, DR, energy storage between supply and demand. developing resources and technologies con- and distributed generation. DR is even being tinue to facilitate innovative grid architectures looked at as a resource that can be counted on In New York, in response to the Reforming and distribution system operations. to manage electric vehicle charging loads so as Energy Vision (REV) initiative, utilities are to ensure that those loads are being deployed using DR and EE solutions as part of a targeted With healthy growth anticipated for EE when electrical resources are abundantly demand management program that is focused and DR resources over the next decade, it is available. The industry is increasingly looking on alleviating constrained load pockets within important to better understand how these to DR resources to help integrate the growing the service territories. Con Edison has for resources fit into the broader DER paradigm. amount of intermittent renewables by bridging many years used DR to manage various con- As electric systems become operationally the gap between the sudden loss of renewable straints on its distribution system. Central more complex due in part to growing DERs, power and the start of combustion turbines or Hudson has developed a DR program that utility planners and operators are increas- other supply-side resources. includes a bring-your-own-device (BYOD) ingly looking to various resources that can be feature allowing customers to participate in deployed on a time-specific basis to help alle- Demand response programs are being DR events using their own Wi-Fi thermostats. viate those constraints. deployed for a variety of purposes to address grid conditions. Some programs are aimed at ENERGY EFFICIENCY PLAYS DEMAND RESPONSE AS obtaining near instantaneous response from A VITAL ROLE THE FACILITATOR end customers in order to mitigate voltage and frequency irregularities and maintain Notwithstanding the menu of demand With healthy growth projections on the operating reserves on the electric grid. Other response solutions, it is important to recognize horizon, it is apparent that the EE and DR programs are designed to accommodate more that EE still continues to play an important resources will be a significant part of the traditional capacity constraints, including the role in the DER paradigm. Energy efficiency DER paradigm in the next decade. But with avoidance of high cost periods and the deploy- is by far the least-cost resource available. EE significant transformation now occurring in ment of carbon-emitting generating resources. resources can and must be a central element of the electric industry, it is not yet clear what In areas with high penetrations of renewable any carbon reduction strategy. For example, role each of these resources will play in this resources, DR programs are designed to, the EPA’s Clean Power Plan (CPP), while cur- timeframe. One vision that appears to be in effect, follow the loads as they fluctuate rently on hold due to court challenges, high- emerging in high-growth DER states such throughout the day. This means that at times lights EE as one of its main elements toward as California, New York and Hawaii is where customers will effectively be increasing their reaching the goals set forth in that policy. In DR is not just the work-horse resource but loads to follow those variations in the grid. California, recently passed clean energy legis- is also being viewed as the facilitator for the lation mandates that EE resources be doubled optimal deployment of DERs. That vision is In California, utilities are using DR in various by 2030. Indeed, EE continues to be consid- illustrated in Figure 2. With utilities and grid ways to help manage the significant growth ered first in California’s Loading Order for operators looking to address a range of grid of DERs. PG&E’s strategy is to position DR Electricity Resources. 4 Association of Energy Services Professionals

Over the past 30 years, EE programs the nighttime ramp-up of load will essentially over the past 30 years. Because of the wayhave consistently delivered low cost energy double, requiring a variety of resources to fill in both EE and DR operate makes them a nat-resources that have led to measurable benefits the void for a short period of time. ural part of the distributed energy resourcefor consumers, utilities and society as a whole. paradigm. Moreover, DR programs are nowIndeed, a forthcoming report by ACEEE sug- Energy efficiency can be an important part being fully integrated into the deployment andgests that EE continues to be the least-cost of that resource mix assuming that savings management of distributed energy resources.alternative to building new power plants. The can be realized at those times. While high Together, the EE and DR roads are rapidlyACEEE report finds the average cost of EE efficiency equipment replacements have been merging onto the DER super highway.programs to be about 3.5 cents per kWh saved, the bedrock of EE programs for many years,which is significantly lower than the EPA’s program planners are looking to new and REFERENCESestimate for EE resources as part of the CPP. innovative approaches for acquiring additionalHowever, as EE programs are increasingly being savings that can meet the changing needs of FERC. “Assessment of Demand Responseviewed through the DER lens, it is import- the grid. More savings opportunities are now and Smart Metering, Staff Report.”ant for EE efforts to be more focused toward being realized through behavioral and oper- December 2015.meeting the changing operational needs on the ational efficiency initiatives. According to a Navigant. “AB802 Technical Analysiselectrical grid. These changes necessitate that recent study by Navigant for the California Potential Savings Analysis Prepared for theEE programs be focused on delivering savings Public Utilities Commission in response to California Public Utilities Commission.”at the times when those savings are needed the recently passed AB-802 legislation, it March 2016.most. In recent years, California’s independent was determined that significant new savings Navigant. “Distributed Energy Resources:grid operator constructed the now famous opportunities are potentially available through Global Forecast.” October 2015.“duck curve” which shows the predicted load operational and behavior-based programs, PG&E. Presentation to Efficiency Councilshape for the state as solar and wind resources aimed at tapping existing lighting controls and Business Forum. April 2016.become larger parts of the generation portfo- building information/energy management SolarCity. “A Pathway to the Distributedlio. In the next couple of years, load is actually system infrastructures. Grid.” February 2016.expected to decrease dramatically during the U.S. Department of Energy. “SEE Actionmiddle of the day, normally peak hours, due to Other EE program approaches being Guide for States: Energy Efficiency as a Least-solar installations. Once the sun goes down, investigated by program planners relate to new Cost Strategy to Reduce Greenhouse Gases “behavioral boosters or kick-starter” program and Air Pollution and Meet Energy Needs in FIGURE 2: design components that may have the potential the Power Sector.” February 2016. THE NEW ELECTRICITY ECOSYSTEM of enhancing current levels of savings across Wikler, Greg, Stuart Schare and Brett entire program administrator portfolios. The Feldman. Demand Response is Alive and Generation Transmission Distribution notion is that EE program approaches are now Well: DR Opportunities in a Post-Order 745 RANGE OF GRID MANAGEMENT NEEDS being focused to better understand consumers’ World. Electricity Policy.com. October 2014. motives and needs. Wood, Elisa. Energy Efficiency is Still DEMAND RESPONSE Cheaper than Building Power Plants. Energy Distributed Energy Solutions With the added understanding, the notion Efficiency Markets. March 2016. goes, we can begin to test creative approaches Energy Energy Distributed Electric using more traditional behavioral program Greg Wikler is a Ef ciency Storage Generation Vehicles efforts (e.g., the Home Energy Report pro- director of Navigant grams), and new or re-scoped efforts (e.g., Consulting’s Energy annual statewide competitions in the com- Efficiency, Demand mercial office space such as the “Kilowatt Response and Smart Crackdown Office Competition” concept Grid Programs espoused by the Northwest Energy Efficiency practice. He is an Alliance) as adjunct behavioral design energy economist approaches to existing successful programs and in his nearly 30 -- in all sectors. Such an approach will require years of experience EE program planners to reach deeper into their in this field, he has conducted numerous toolkits of innovative and creative thinking -- studies aimed at assessing market potentials, something we have done in the past and can program designs, and program evaluations certainly do to meet challenges of the present. associated with a wide variety of distributed energy resources. A BRIGHT FUTURE FOR EE AND DR www.aesp.org | 2016 5 Energy efficiency and demand response resources will play a vital role in the electric grid of the future. EE and DR resources have the track record of proven performance

TECHNOLOGY ThermostatsEmerging Energy ThermostatsEfficiency Technologies: SmartThe Fruit Keeps Growing on the Tree Technologies LEDs SmartBy Steven Nadel TechnologiesSince AESP was founded in 1989, new energy and about 40 percent of the electricity used RoofLtEoDpssaving technologies and practices have been in commercial buildings. Many of these loads Unitssteadily introduced into the market. This is can be reduced by making the most efficient Rooftopillustrated by lighting used for commercial equipment on the market common practice UniCtsHPbuildings: in 1989 many energy efficiency (e.g. for televisions, set-top boxes, personalprograms were providing rebates for reduced computers, ceiling fans and medical imaging CHPwattage fluorescent tubes (e.g., 34 Watt tubes equipment) and through use of advancedto replace 40 Watt tubes). Over the years bet- power strips that shut down equipment when price premium but growing the market share ofter technology has been commercialized and not in use. The most efficient products have a these efficient products can drive costs down,promoted, starting with T8 tubes (typically 32 just as it happened with previous generationsWatts), “Super T8” tubes (28 Watts for some FIGURE 1: of some of these products. However, mis-products), and in the past few years, LED MEASURES AND THEIR ESTIMATED SAVINGS cellaneous loads are highly diverse and evenfixtures (can be 16 Watts for the amount of the five major ones discussed abovelight produced by the old 40 Watt tubes). Measure Savings as % only account for about 29 percent of allIn other words, as we pick low-hanging fruit of 2030 Use miscellaneous loads – to achieve the large sav-on the energy efficiency tree, new fruit often ings shown in Figure 1 will ultimately requiregrows back. Large reductions in key targeted plug loads 3.4% similar efforts for dozens of miscellaneous energy uses. In the past few years there has been more Conservation voltage reduction 2.1 %talk that, as some of the old work horses of CONSERVATION VOLTAGEenergy efficiency programs become common New construction programs 1.9 % REDUCTION (CVR):practice (e.g., compact fluorescent lamps andsuper T8 lighting systems), it will be harder Comprehensive commercial retrofits 1.7 % CVR involves measuring and analyzingto keep achieving high energy efficiency sav- voltages on distribution feeders in order toings. To address these concerns, in late 2015 Smart manufacturing 1.6 % find ways to reduce overvoltage on many feed-ACEEE published a study titled New Horizons ers. CVR needs to be implemented by utilitiesfor Energy Efficiency: Major Opportunities High-efficiency residential central AC & heat 1.5 % on a feeder by feeder basis. Typically CVRto Reach Higher Electricity Savings by 2030. pumps with quality installation results in average energy savings of more thanThe study examined 19 promising energy effi- 2 percent; most of these savings are on the cus-ciency measures with low current market share Combined heat and power systems 1.3 % tomer side of the meter, but except for slightlybut high savings potential, concluding that col- lower bills, customers see no change in service.lectively they could reduce 2030 electricity use Advanced commercial lighting design 1.3 % About a dozen utilities are now pursuing CVRby about 15-31 percent below projected use and controls on their systems with quite a few others start-(mid-range estimate of 22 percent savings). ing to examine this measure.The measures and their estimated energy Replacing electric furnaces and strip heat 1.2%savings (mid-range estimate as a percent of with high-efficiency heat pumps NEW HOMES AND BUILDINGS-total 2030 US electricity sales) are noted MOVING TOWARD ZERO-NET ENERGY:in Figure 1. Smart commercial buildings 1.2 % Generally the easiest time to incorporate In the following paragraphs I discuss some Residential LEDs targeted at current 1.1 % energy efficiency measures is when a buildingof the most promising of these measures. incandescent applications is first constructed. New homes and com- mercial buildings have become substantiallyREDUCING Residential retrofits 1.0 % more energy-efficient in recent decades butMISCELLANEOUS LOADS: much greater savings are possible. Zero-net Advanced commercial rooftop units 0.9 % Small miscellaneous loads in the residential Real-time energy use feedback 0.8 %sector are growing and now consume roughly and behavioral responseone-third of the electricity used in residences Strategic energy management for large 0.8 % facilities Residential appliances (refrigerator, clothes 0.7 % washer & dryer) Heat pumps water heaters and other 0.6 % advanced systems Residential smart thermostats 0.5 % Energy performance labels for commercial & 0.5 % industrial equipment Adjustment for overlap between measures - 2.3 % Sum 21.5% Source:ACEEE6 Association of Energy Services Professionals

VoltageReductionss RVeodLLlutPPoocalltagauuieoddggnss PHuemaptsStorage Retro ts design and control, reducing energy use by PHuemaptsStorage Retro ts 50 percent or more relative to typical fluores- cent and HID systems. While some of these from large established companies to new start- savings can be achieved with good equipment ups, are now marketing these services, often selection, skilled lighting design is critical for on an annual subscription basis. maximizing savings, such as when spaces are remodeled when new tenants move in. HIGH-EFFICIENCY AIR CONDITIONING AND HEAT PUMP RESIDENTIAL SMART SYSTEMS IN THE RESIDENTIAL THERMOSTATS, REAL-TIME FEEDBACK AND BEHAVIOR: Advanced smart thermostats learn from user behavior and have been shown to reduce heating and cooling energy use by 10 percent or more. In addition, providing consumers with real-time feedback on their energy use can enable average energy savings of about AND COMMERCIAL SECTORS: 5 percent as such feedback can motivate changes in behavior. Both smart thermostats SEM Advanced variable speed air conditioners and real-time feedback can be used to reduceSEMenergy (ZNE) homes and buildings are so and heat pumps can reduce energy use by 20-30 peak demand, in addition to providing kWh percent compared to units typically being sold. savings. A number of programs are nowefficient that remaining energy needs can be However, the market for these products needs promoting smart thermostats. Furthermore,met on average over the course of a year with to increase in order to spur cost reductions. many utilities are installing smart meters inrenewable energy systems. Hundreds of such In addition, a special opportunity is replac- customer homes but only a few have gone far-homes and buildings have been built and sev- ing electric furnaces (electric resistance units ther and provided customers with easy-to-useeral efforts are targeting making ZNE or ZNE- that are common in the south) with much information on their energy use in ways thatready (highly efficient buildings but without higher-efficiency heat pumps. Most homes they can react to in real time.the renewable energy system installed) stan- with electric furnaces already have central airdard practice by 2030. Leading programs such conditioning and thus installing a new heat STRATEGIC ENERGYas ones in Oregon (for commercial buildings) pump when the air conditioner needs to be MANAGEMENT (SEM):and New York (for new homes) show the way. replaced can have very favorable econom- ics. Quality installation (air flow, refrigerant SEM is a systematic approach to energy charge, sizing, duct leakage and insulation) can management and involves establishing systems substantially reduce the ubiquitous (roughly to enable continual improvement in energy 30 percent) losses between the equipment efficiency. SEM efforts can leverage such toolsCOMPREHENSIVE plenum and the room air registers, and should as the International Standards OrganizationCOMMERCIAL RETROFITS: be part of these efforts. 50001 framework or the U.S. Department of Energy’s Superior Energy Performance frame- Energy savings of 20 percent or more can COMBINED HEAT work. Efficiency programs have successfullyoften be achieved by undertaking commer- AND POWER SYSTEMS: promoted such practices to large customers incial building retrofits that address multiple Combined heat and power systems (some- the industrial and commercial sectors in manybuilding systems at the same time and thereby times called cogeneration systems) produce regions of the country, but efforts have beenleverage energy- and cost-saving synergies. both heat and power at the same time, using particularly extensive in the Pacific Northwest.The classic example is a retrofit of the Empire less energy than producing heat and powerState Building that reduced energy use by 38 separately. Such systems can make sense in Steven Nadel is thepercent, but dozens of other examples have applications with demand for heat throughout executive directorbeen documented. Comprehensive retro- the year such as many factories, hospitals and of the Americanfit programs are now underway in several university campuses. Some of these systems Council for anstates, often working with EPA’s Building can also allow facilities to function during Energy EfficientPerformance with ENERGY STAR® initiative. Economy (ACEEE), power outages, an important consideration a non-profitSMART MANUFACTURING for some critical applications. Several utilities organization thatAND SMART BUILDINGS: and other program operators are now promot- works on programs ing and achieving large energy savings from and policies to New sensor, control and “big data” strate- these systems. advance energy-efficient technologies andgies can help to optimize production processes services. Before ACEEE, he planned andand building systems and can also help identify ADVANCED COMMERCIAL evaluated energy efficiency programs for Newproblems so they can be quickly addressed. LIGHTING AND CONTROLS: England Electric (now National Grid). HeEnergy savings of 15 percent or more can LED lighting systems not only save energy has worked in energy efficiency for 35 years.result. Several private companies, ranging directly but can also enable improved lighting www.aesp.org | 2016 7

EM&VDriving it Home: Real-Time Measurement& Verification for Residential ProgramsBy Tim GuitermanINTRODUCTION The third and fourth statements highlight more timely and more accurate…Those inter- the shortcomings of today’s model, and are ested in energy efficiency should look beyondThinking about the changing space of mea- driving an industry innovation known as the traditional EM&V practices toward thesurement and verification in the residential “EM&V 2.0.” development and adoption of new practices.”sector, I reflected on the themes I’ve heardechoed through many conversations with EM&V 2.0 - A PRIMER In the summer of 2015, there was a flurryutility executives, program administrators, of press about the challenges of measuringregulators, evaluators and implementers, In early 2014, Tom Eckman and Mark energy efficiency, most notably a Greentechsummarized in the following statements: Sylvia coined the term “EM&V 2.0.” In their Media article, which criticized EM&V by stat- article in Electric Light & Power, they stated, ing that “the industry is systematically plagued 1. Rate-payer funded utility energy effi- “Technological advances point to a future that by an outdated way of measuring performance ciency programs need to be held account- will support EM&V that is less expensive, able and responsible for delivering the energy savings they promise. FIGURE 1: 2. To date, evaluation, measurement and verification (EM&V) is the primary vehi- cle to demonstrate this accountability. 3. After establishing accountability, one of the key objectives of EM&V is to provide timely, actionable feedback to improve the effectiveness of programs. 4. Energy efficiency programs today do not have the timely and actionable feedback needed to improve program effectiveness. The first two statements describe the cur-rent model, designed to ensure that energy anddemand savings claimed by rate-payer fundedefficiency programs are valid and defensible.8 Association of Energy Services Professionals

-- partly because efficiency is hard to track FIGURE 2:compared to energy generation, and partlybecause of the industry’s inability to modern- PROGRAM SAVINGS PROGRAM PROGRESSize.” The article went on to note that “…newapproaches to tracking savings are emerging.” 156 ± 12.5 / 250 78% ± 6% 1,485 / 2,100 Dan Violette of Navigant provided a rea- METERED (MWh) REALIZATION RATE PREMISES TREATEDsoned response to the hype in the 2015 issueof AESP Magazine in his article titled “The 63% ± 5% OF GOAL 78% ± 6% OF GOAL 71% OF GOALPromise of Evaluation 2.0.” Violette was care-ful to highlight the roles and limits of the new Cumulative Savings by Project Monthtools, remarking that “we are gaining valuable2.0-type tools, but we are not redefining evalu- Savings Target: 250 MWhation.” He went on to say that “…professionalsneed to do the work that will move these tools MWhto sustained productivity more quickly. Thebenefits are too great to not actively work with Jan 2015 Feb 2015 Mar 2015 Apr 2015 May 2015 Jun 2015 Jul 2015 Aug 2015 Sep 2015these Version 2.0 tools.” Metered Savings Deemed Savings Finally, in December of 2015, both theNortheast Energy Efficiency Partnerships FIGURE 3:(NEEP) EM&V Forum and the AmericanCouncil for an Energy Efficient Economy Actual Performance (Metered Savings/Expected Savings) Can they Can we(ACEEE) released separate publications do more? tranfer beston how technology is changing the EM&V practices?landscape. Both publications highlighted therole of automated measurement tools (called Low Volume, High Volume,“automated M&V” by NEEP) in this changing High Performance High Performanceparadigm. These two well-respected organiza-tions make it clear that transformational tech- Immediatenology and tools have arrived that can unlock correctiona tremendous amount of value, not only for necessary!EM&V but for energy efficiency programs ingeneral. According to the ACEEE, “by incor- Low Volume, High Volume, LEGENDporating [automated M&V] into the design Low Performance Low Performance Contractorand management of their services, program Manager Actionadministrators and evaluators will be able to Sign them Total Expected Savingsimprove the effectiveness of their actions and up forreduce their operating costs.” Furthermore, as trainingthe NEEP paper states, “automated consump-tion data analysis can provide rapid feedback in energy usage. The analysis can use monthly to program implementation to improve out-to programs whether or not this analysis is or interval data on energy consumption, and comes. This is the shift to EM&V 2.0 – newused as the final evaluated savings.” works for any metered fuel, such as electric or software tools make granular, actionable data natural gas. Automated M&V is able to arrive on program performance available during the My company has been in the field with at confident savings estimates more quickly program year.our Automated M&V tool (a software com- than conventional billing analysis, with lessponent of the EM&V 2.0 ecosystem) for two than 12 months of post-treatment data. A SAMPLING OF BENEFITS FROMyears, and our utility clients have realized that AUTOMATED M&Vcontinuous measurement creates real value for What does this look like for a typicaltheir energy efficiency programs, ranging from utility client using the software tools? Using Trade Ally Performance: For residentialimproved program management to enhanced Figure 1 as an illustrative example automated programs that rely on contractors to meetEM&V. This value creation is best illustrated M&V software incorporates a regular stream goals and deliver satisfied customers, monitor-by way of a few examples. of usage data for the utility’s residential sector ing contractor performance, based on savings (e.g, over 1 million customers). As new project at the meter, is a critical metric. In most pro-NOTES FROM THE FIELD – tracking and usage data comes in (providing grams today, the contractor with the highestAUTOMATED M&V FOR locations and details of participating projects), volume of savings is often seen as the best, butRESIDENTIAL PROGRAMS the software updates the analysis and outputs as one of our clients discovered, quantity is not automatically, feeding a web-based dashboard necessarily a guarantor of quality. As Figure 3 First it’s helpful to describe how automated containing the results-to-date as well as the demonstrates, with metered savings data it isM&V tools work. In general, in the residential drivers behind those results. The client views possible to immediately identify the top andsector, Automated M&V measures savings their secure dashboard to understand program bottom performing contractors, enablingat the meter from hundreds to thousands of performance in near real time (see Figure 2) program staff to take corrective actions andhomes, and aggregates those savings for the and thereby is able to make proactive changes capture best practices.program. To put it more technically, AutomatedM&V leverages established M&V protocolsto perform a continuous, automated billinganalysis, across every project in a program, anduses large comparison groups of non-partici-pants as control for population-wide changes www.aesp.org | 2016 9

Tetra Tech’s energy sector expertise is complemented by our extensive capabilities inresearch methods and design, data collection and management, and the analysis of largeamounts of complex data. Tetra Tech designs research strategies so results can be usedto quickly respond to market changes and customer demands. We provide pragmaticrecommendations based on hard data.Services• Impact evaluations including gross and net energy savings, demand savings, and non-energy benefits (e.g., economic impacts, job creation, water savings)• Cost-effectiveness evaluations• Process evaluations• Market effect evaluations including market potential studiesFind us online at: http://www.tetratech.com/en/utilities-and-market-analytics tetratech.com /tetratech /tetratechTetraTech_Ad_AIEnStPe.inlldidge1nt Quality Control: Most res- reference manuals (TRM). More importantly, considerable progress in a short perio6d/14o/2f01t6im11e:3,1:38 AM idential utility programs conduct quality feeding metered savings data into a TRM but we have a long way to go before EM&V assurance/quality control (QA/QC) on-site ensures that utilities are using savings estimates 2.0 is a standard industry best practice. To get inspections to ensure equipment is being that are consistent, up-to-date and reflect the there, we look forward to working with the installed correctly and contractors are following customer experience. industry to test and validate emerging methods established protocols. Programs typically per- and tools, address regulatory and institutional form random inspections across a percentage EM&V 2.0 – FROM VISION TO barriers to deploying EM&V 2.0 tools, and of projects. Automated M&V introduces new REALITY establish protocols and standards to guide the and important data into the inspection crite- selection and application of tools to advance ria. With information on the characteristics of It’s been more than two years since Eckman EM&V and data analytics. over-or under-performing projects (e.g., mea- and Sylvia first sketched out their vision for sures, contractors, locations, etc.), utilities can EM&V 2.0. Over that time, the industry has Tim Guiterman focus precious QA/QC budgets on targeted moved forward at a record pace. Utilities and is the Director of projects. This shift in focus allows inspection other stakeholders across the country are test- Quantify Solutions at efforts to be more fruitful, less intrusive to ing 2.0 tools, and technology companies are EnergySavvy, where customers and ultimately can lead to decreased learning, improving, and innovating. Regulators he works closely with inspection costs. are also pushing the industry forward, with utilities and energy Enhancing EM&V: Utilities deploying recent legislation in California, rule makings efficiency practi- automated M&V software can now conduct at the California Public Utilities Commission, tioners to understand more value-added, integrated EM&V, where and language in New York’s Reforming the how automated the continuous monitoring of metered savings Energy Vision (REV) order all aimed at incor- measurement and verification (M&V) can data can inform and calibrate their deemed porating savings at the meter. The tools can improve and optimize energy efficiency savings, and provide timely performance feed- unlock previously unseen insights for utilities, programs and processes. Previously he was back to direct evaluation research and program drive better results from residential programs, an associate director at Navigant where he planning. One of our clients found a measure open up new program design opportunities focused on EM&V and DSM studies for that was generating over two times the deemed and enhance EM&V. And utilities increasingly several major IOUs. savings when measured at the meter – poten- need to understand how customers interact tially leaving savings on the table. This kind with their product – energy. EM&V 2.0 tools of information can be used to update deemed provide the framework to continuously assess savings estimates contained in technical how, when and why energy is being used and saved in homes and businesses. We have made10 Association of Energy Services Professionals

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MEMBER FEATUREHow Did You Come into theEnergy Efficiency Industry? For every person working in the energy efficiency industry, there’s a different story of how they became involved and why they’ve stuck around.We spoke to five members of the HOW AND WHY DID YOU GET INTOAssociation of Energy Services THE ENERGY EFFICIENCY INDUSTRY?Professionals, from companiesacross the industry and across “As a young, typically foolish 23-year-old, driven entirely by passionthe country, asking how they got and accompanied by a profound lack of common sense, and a total lack ofstarted and where they see things planning, I stumbled onto an awesome internship.headed for the future. “The year was 1983 and the internship was the Hood River Conservation Experiment, the largest energy efficiency experiment in the world ever. For the bargain WHAT IS IT ABOUT price of $21 million, we were to answer one seemingly simple question: ‘Is it better to THE INDUSTRY THAT YOU generate energy or not consume it all?’ More than three decades later, some are still trying LOVE AND WHERE DO YOU to answer that question. “As for me back in 1983, I thought I had died and gone to statisticians’ heaven. I always FEEL IT’S HEADED? wanted to be a DSM person except, we didn’t call it that back in the day. Originally, it was called Conservation and Load Management. “I was hired into the industry in 2010, and I was attracted to “Conservation sounded a bit socialistic, and ‘load management?’ Who wants it because I wanted a job where I felt like I was doing something their ‘load’ managed? It wasn’t very appealing, so the name was changed to good for society and the world. I saw the energy efficiency industry Demand-Side Management. Although that is leagues better than its predecessor, as a way to help, fighting against climate change and reducing peak demand, those sorts of things. I am still trying to explain to my mother what “I think energy efficiency is going to become a lot more important that means to this day. Overall though, it has across the nation going forward. I think whether the new provisions been a wonderful journey and I would go through and are eventually approved by the Supreme Court and follow the same exact footsteps if I were to do it again.” get implemented, or not, I think somehow there’s going to be an effort – a nationwide effort M. Sami Khawaja, – to fight climate change. And energy chief economist, efficiency is going to have a huge Cadmus role in that.” Jordan Michel, ATAeECcuShhngiPoculoasSggytuo–m16mT-h1e8e r,Gr2Cea0ot1n6GafmeereChnancgeer senior program manager, Oncor1122 Association of Energy Services Professionals

WHAT DO YOU SEE AS THE FUTURE OF THE INDUSTRY, AND WHAT KEEPS YOU THERE? “I was interested in energy ever since my undergrad days. I came to Navigant straight from grad school and I’ve been here ever since, for about eight years now. When I was in grad school, oil prices were starting to go up and a lot of people were getting interested in sustainability and energy, and I knew that was a place I wanted to be.“Going forward, I think there will be a lot of challenges because low-cost energy efficiency is getting harder and harder to find. So many people now have CFL’s and have low-flow shower heads, so now it’s about identifying what’s the next big thing, the next mass market, cost effective energy efficiency product that has a large potential and is still untapped. I like those challenges, though, and even though energy efficiency has been around a long time, challenges are always popping up as the industry evolves. I really enjoy forecasting studies, I do a lot of energy efficiency potential studies. I’ve done them in California and in other states, a lot of modeling and data analysis, and those things really fuel my passion. When we look forward 10 years, we have to ask ourselves how our market is evolving, how our technologies are evolving, what will customer preferences be in the future. And those are tough questions! But that gets me excited, trying to answer these tough questions.” Amul Sathe, associate director, Navigant Consulting WHERE DO YOU SEE THE WHAT IS IT ABOUT INDUSTRY GOING? THE INDUSTRY THAT HAS KEPT “I think it’s at a pretty interesting place right now. I can remember YOU HERE FOR SO LONG? when I first got into the industry, going to a lot of conferences and they were always about needing to get more funding for programs. And then, lo “I’ve been in the industry for about 25 years now. I believe strongly in and behold, at around 2008 to 2010, the industry really did just kind of take what we’re doing to save customers money and to have a reliable energy off. It’s been in this wind sprint for the past several years. system. It just is really so important to everyone’s welfare and comfort. You“And what I think will happen over the course of the next generation of energy think about all the devices people use on a daily basis, including basic needsefficiency is that it’s going to need to tie in deeper with customer satisfaction. like light and heat. If it all goes away, then people struggle and it’s great to beUtility companies are going to need to find a way to forge some new, different part of an industry that is so meaningful to people in that way.relationships with their customers. Already, they’ve gone from calling their “For a while, I left this field and I went to work for Franklin Mint, where theycustomers ‘rate payers’ to now looking at them as customers. And then, probably die-cast cars and dolls and toys, those sorts of things. After a while, I thought, ‘I want to get back to the real stuff!’ That really helped make it that much in the pretty near future, they’re going to have to compete for more meaningful for me personally, after being involved with these other those customers to a certain extent as more and more consumer products. new players enter into the space. “I’ve been on all sides of energy efficiency, I’ve been on planning and “I think utilities have an advantage in their experience in offering customers energy implementation, regulatory, and now I’m in marketing. What’s efficient solutions, and I think there’s a great really interesting on the marketing side is having our opportunity for us as an industry to really engagement with customers be on a more personal level, try and leverage that and help utilities being able to hyper-target and know more about them maintain that strong connection so that we can really provide the right message to the back to their customers.” right customer at the right time. So it’s really more of a personalized customer engagement, and Frank Molander, that’s what we’re trying to work on.” energy efficiency & customer engagement consultantOFNerAlabEartSniuoPdanor2ayl7t1C3ho-n16f,e2re0n17ce Kate Ringe-Welch, manager of residential EE product marketing, National Grid www.aesp.org | 2016 13

CUSTOMER ENGAGEMENTFactoring in Efficiency:The Relationship between J.D. Power ConsumerSatisfaction Ratings and Energy Efficiency ProgramsBy L. Dennis Smith Energy efficiency programs are an effective The similar customer satisfaction model Further, customers are asked to rate on aand proven tool for utilities to meet goals for for gas utilities shares most of those factors, 10-point scale the variety of efficiency andreducing energy use, whether voluntary or with Safety & Reliability in place as the conservation programs offered by their util-mandated by state or other regulatory author- energy delivery piece instead of PQ&R. ity, a rating which ultimately rolls up into theities. Though results vary, numerous electric These factors are weighted to determine an weighted customer satisfaction index score.and natural gas companies have indeed found overall customer satisfaction score based onthat, with proper funding in place and sound how customers rate their utility’s performance While customers rate their utility’s energyefforts to raise awareness, their customers in a number of underlying attributes, which efficiency efforts as a part of the Corporatewill respond. But how do energy efficiency are impacted by numerous fundamentals of Citizenship factor, awareness and participa-programs impact another essential area of the customer experience. tion in efficiency and conservation programsconcern for the modern-day utility — cus- can also significantly impact other factors intomer satisfaction? J.D. Power has determined that energy the model and, in the end, explain the levels efficiency — both awareness of and partic- of engagement among utility customers. For The customer is an important piece of the ipation in — is among those fundamentals. example, positioning a new energy efficiencyenergy efficiency equation. Utilities must raise A customer’s familiarity with energy effi- program as a means to saving not only energy,awareness and persuade customers to adopt ciency programs and initiatives is measured but also money, by reducing a customer’s billnew technologies, install efficient equipment under the Corporate Citizenship factor in can help boost satisfaction in the Price factor.and generally take part in various programs the utility customer satisfaction studies, butfor them to be successful. Therefore, how the customers’ recollection of energy efficiency Familiarity with energy efficiency andprogram is administered and communicated messaging from their utility is captured in the conservation programs has a direct, positiveto customers has an impact on the overall Communications factor. This is because effi- impact on overall customer satisfaction (Figurecustomer experience. ciency is often a big piece of a utility’s commu- A). In the J.D. Power 2016 Utility Products and nications campaign as funding for programs Services Study,SM which will be published in For many utilities, improving customer often includes dollars for advertising. The July, only seven percent of customers throughsatisfaction is a key indicator of solid busi- actual programs themselves are an attribute the first half of the study say they are “veryness performance. J.D. Power has found a of Corporate Citizenship, as the utility initia- familiar” with their utility’s efficiency andnumber of utilities integrate various versions tives in place are seen by customers as one of conservation programs. Overall satisfactionof customer satisfaction measures into their several areas where the utility is giving back to among these customers is 836 (on a 1,000-corporate scorecard, including scores reported its community. point scale), which is very high compared within the J.D. Power Customer Satisfaction Index average utility satisfaction scores, which range(CSI) studies. in the 600s. As of November 2015, 39 percentTHE KEY TO IMPROVING FIGURFEigAur:eEANO:EvERenrGeaYrlgl CyEFuEFsfftIioCcmiIeEenNrcCySYaFtaiFsmAfaMilciatIirLoiItnyARBIoToYstBs OOSTS OVERALL CUSTOMER SATISFACTIONSATISFACTION IS TO PROVIDECUSTOMERS WITH A 1,000 Overall Customer Satisfaction Index Percentage of customers 100%GOOD EXPERIENCE. 900 836 90% 800 644 594 80%J.D. Power, through nearly two decades 700 718 35% 18% 70%of utility industry research, has identified 600 60%six key factors in the customer experi- 500 39% 50%ence for electric utilities: 400 40% 300 7% 30%■■ Power Quality & Reliability (PQ&R) 200 20%■■ Customer Service 100 10%■■ Price 0 0%■■ Billing & Payment■■ Corporate Citizenship Very familiar Somewhat familiar Not very familiar Not at all familiar■■ Communications. Overall satisfaction is 242 points higher among customers who are \"very familiar\" with their utility's energy efficiency or conservation programs than among those who are \"not at all familiar.\" Source: J.D. Power 2016 Electric Utility Residential Customer Satisfaction StudySM. Fielding periods July-August 2015, October-November 201514 Association of Energy Services Professionals

0 0% Very familiar Somewhat familiar Not very familiar Not at all familiar Overall satisfaction is 242 points higher among customers who are \"very familiar\" with their utility's energy efficiency or conservation programs than among those who are \"not at all familiar.\" Figure A: Energy Efficiency Familiarity Boosts Overall Customer Satisfaction 1,000 Overall Customer Satisfaction Index Percentage of customers 100% 900 836 90% 800 644 594 80% 700 718 35% 18% 70% 600 60% 500 39% 50% 400 40% 300 7% 30% 200 20% 100 10% 0 0% Very familiar Somewhat familiar Not very familiar Not at all familiar Overall satisfaction is 242 points higher among customers who are \"very familiar\" with their utility's energy efficiency or conservation programs than among those who are \"not at all familiar.\" FIGUFRigEuBre:BE:NEEneRrGgyYEEffFicFieInCcIyEANwCaYreAneWssAbRyEYNeEarSS BY YEAR FIGURE C: OVERALL SATISFACTION IS HIGHER AMONG CUSTOMERS ON ENERGY EFFICIENCY PROGRAMSPercentage of customers \"somewhat familiar\" or \"very 100% familiar\" with utility efficiency programs and initiatives. 75% Very familiar Overall Customer Satisfaction Index Somewhat familiar 50% 4.5% 7.4% 25% 38.7% 38.8% 0% 2013 2014 2015 2016* 2012 Year of J.D. Power Electric Utility Residential Customer Satisfaction StudySM Source: J.D. Power 2015 Consumer Engagement Study *Includes data from J.D. Power 2016 Electric Utility Residential Study,SM fielding periods July-August 2015, October-November 2015 Figure B: Energy Efficiency Awareness by Yearof customers say they are “somewhat familiar” programs in the past five years, or customers C). Satisfaction is even higher when the pro-with their utility’s efforts, yielding an overall aren’t recalling the message. Percentage of customers \"somewhat familiar\" or \"very 100% grams are easy to enroll in and customers feelsatisfaction score of 718, which is more in line familiar\" with utility efficiency programs and initiatives.with where the highest-performing utilities abucwIstgianhnesurse6ivaradisth3nvomsthteTooo0gilxtcvhoscmmh.eoeuveacesTdneeessnh,etrhmidaattosnuhihnlomsol,fteaenuuiutrrwlieheJenitrte.trcileaDdislsoponesihit.vrbmsnoiaiPo3eegegtnrg7eohschadtsrawaateolapowvulrnemeempsacptrarehrrusrtcCemeoouesJesum.tuimrnsDoorotaasitrfsomlot.glelaiotoyaePttteeemynsfioarsvttygwefcehahtsaglurhraeepeecrystSamrictreitritoatssohob257.prtfsg0550maianiyrIirc%%%%rsvtesco.af2eesbtWwa0gmfuiroocr1o3r4stoapn2t8ausi.hn5iuln.amraY8noi%eootrledt%i*nddnyaeeIssr-n,rcoluf dJfei.eDsl.ddectabcbaceEPinahnnhhunxouigtf2awlefpsooddrpsl0iefrsotecr1ieiiroeor.ncc3gilirEwmoelmeeUeialdeeinJhssssscsa.nletDscJertaniuisr.ccniynanlPedmyeUs-owpdrhAatwpaiavlurtpiocietdctgooiiytroaecsuwahmR2sgsfrelmn0eit,ayrt2,t1s2itaic0i6ni0hhecdavfm1t1aeEosiieei4e5nspnlofe,rlysttaipcaOddaneitigultricmrro.iCnelctiteoovuwUiptbpbdslweeetitirinaeornltri-ictemcNpyiayc,nureotcRertSrvVcsgcootet,eStoushaoemp2awboidnnset0mrbreieempsyt1eiienfrotirr5aertlhtnlhif2ecaoimyhwaet0aelgriov1nStmebslhne5ihitpieeu.ldaarSreiedearlsdttei.yugisia,,drddmSfyeeyryMaaeiSual3tmnMpe7ctsg8tio.wcoreoi4y.oi27lotl%rsnii0%iodrgattvtt1iaysdhooyrec6l.,*generally score. residential customers nationwide. Those customers who are aware of programs – all L. Dennis Smith is a As Figure A shows, the Customer programs including energy efficiency as well director in the ener-Satisfaction Index (CSI) among custom- as demand response, renewables, time-based gy practice at J.D.ers who are not familiar with their utility’s pricing and other energy offerings – but do Power. His respon-energy efficiency and conservation initia- not participate have higher satisfaction, at 686. sibilities includetives drops off significantly. Figure A also This group was 47 percent of customers. The thought leadership,illustrates that the majority of customers are remaining customers have even higher satis- understanding andin the middle, either “somewhat familiar” or faction, correlating to the number of programs identifying best“not very familiar” with their utility’s initia- or services in which they participate. practices, mappingtives. The challenge for utilities is capturing current and emerging trends, and develop-customers’ attention and educating them on ing insights using J.D. Power’s syndicatedefficiency and demand-side programs. In addition, the J.D. Power 2016 Utility customer satisfaction data, enabling clients Products and Services Study,SM published to deploy best practice methods in support of The collective percentage of customers annually in May, found that customers who their customer satisfaction and smart energywho say they are “very familiar” or “some- participate in efficiency-oriented programs are initiatives.what familiar” with their utility’s efficiency much more satisfied with their utility (Figureinitiatives has increased only slightly since2012 (Figure B). J.D. Power also finds duringthis same time period that the percentage ofcustomers who recall communications or mar-keting of energy efficiency rebates or financingprograms has remained flat, at around 8 per-cent. The same is true for customer recall ofenergy conservation messages and productofferings from their utility. Either utilities havenot increased their promotions of efficiency www.aesp.org | 2016 15

POLICYThe United States of Energy Efficiency– A Regional Round UpBy Elizabeth TitusREGIONAL ENERGY EFFICIENCY ORGANIZATIONS IN THE U.S.A.Like individual snowflakes, each of the states national and local/state interests, policies, THE FRONTIER STATE: CALIFORNIAin America is unique in many ways – including and research within a region. They also con-its energy efficiency market. Since a picture is nect members with each other to leverage California, ever a frontier state, has been inworth a thousand words, the accompanying information and networks. REEOs tackle the energy efficiency spotlight of late thanksgraphics help illustrate how the states com- building codes, appliance standards, emerg- in part to two landmark bills. Supported bypare to each other – whether in energy savings ing technologies, and help the DOE and EPA diverse stakeholders, both bills representin relation to retail sales (Figure 1) or overall move various initiatives forward. Another way a paradigm shift away from programmaticdelivery of energy efficiency resources, per that our industry works to connect within and regulated efficiency toward markets that treatACEEE’s Scorecard (Figure 2) While these across regions is through the 13 local chapters energy efficiency as a capacity resource anddetails show significant variation across the of AESP in the U.S. and Canada; the focus of rely on private capital and innovation to createcountry, rounding up groups of states into geo- these groups is education and networking. new business models. The Clean Energy andgraphic regions provides a higher-level per- Pollution Reduction Act of 2015 (SB-350)spective on similarities and differences to help Recently, members of several REEOs essentially doubled energy efficiency andcharacterize some of the shared opportunities were among stakeholders invited to share increased renewable energy goals as strategiesand challenges, and highlight trends around their thoughts and insights about their to attain lower greenhouse gas goals. It adoptsthe country. regions: Where do they see energy efficiency a data-driven “pay-for-performance” approach going? What challenges and opportunities linking incentives directly to measured energy One of the ways energy efficiency is are states facing? Any policy changes on the savings. AB-802 moves California towardssupported nationally is through the efforts of horizon? What do they wish for their region? meter-based energy efficiency and towardRegional Energy Efficiency Organizations, Notes taken from the conversation help implementing benchmarking across the state.also knowns as REEOs. These nongovernmen- paint a picture of the energy efficiency scene For the efficiency community, the vision of atal entities are part of the glue that connects in each region. future where most programs have embedded16 Association of Energy Services Professionals

evaluation strategies tied to the meter is start- The Northwest Energy Efficiency Alliance may adopt energy benchmarking and Denver,ing to unfold. Stay tuned as the story unfolds, (NEEA) engages over 140 utilities. It focuses CO may adopt the 2015 IECC building code.since also going on are: the California PUC’s on market transformation and new efficient While opportunities for interstate collabora-guidance on defining baselines, distributed technologies. This REEO produces 16 to tion still remain, the areas of transportation,resource plans and utility business planning in 20 percent of the region’s energy savings. industrial and CHP are where SWEEP pro-response to the new legislation. Collaborating with four gas utilities, it is now vides strong support to the region. taking on the challenges of low gas prices,THE NORTHWEST: climbing baselines, and the rural nature of IN THE MIDDLE:LESS COAL, MORE EE the region by piloting natural gas energy TEXAS AND OKLAHOMA efficiency programs. Energy efficiency has a 35-year history in Texas is known for leadership in distrib-the Northwest and continues to grow even as WESTWARD EXPANSION: uted and renewable energy generation. Formany states are awash in hydropower and also THE SOUTHWEST many reasons, it is well-poised to realize poten-meet the region’s relatively modest capacity tially large energy efficiency savings as manyneeds with imported and local coal. Anti-coal The members of the Southwest Energy of the fastest growing cities are in this region.and clean energy initiatives in Oregon and Efficiency Project (SWEEP) share abundant And, the high penetration of advanced digitalWashington are policy considerations, while sunshine and relatively high economic growth. meters create opportunities for next gener-Montana may be drawn toward energy effi- The landscape for energy efficiency in this ation efficiency integrated with distributedciency for economic development benefits, if region is harder to read, however. As Ellen resources. Currently, the region is best charac-local coal plants close. Zuckerman (SWEEP) notes, the region has terized as consistent and moderate in its deliv- robust utility efficiency programs currently ery of energy efficiency, as evidenced by their The draft 7th Northwest Regional Power in place and is “very interested in being inno- middle-of-the-pack standing in the ACEEEPlan calls for reduction in the use of imported vative within their programs.” A downward scorecard. The South Central Partnership forcoal-fired power, sees no need for more trend in avoided costs, combined with upward Energy Efficiency as a Resource (SPEER)’srenewables from a cost-effectiveness stand- trends in baselines add challenge to the goals include: (i) to explore the possibilitypoint, and has increased its six-year energy cost-effectiveness of utility programs, but of an organized market for energy efficiencyefficiency targets. Energy efficiency is well renewed interest in decoupling (rate cases products and services, (ii) helping to advancepoised to fill any energy and capacity gaps that in Colorado and New Mexico) holds prom- energy efficiency in new construction throughmay arise from reductions of coal-fired power, ise for ramping up programs in the future. its Energy Code Ambassadors and (iii)as well as potential market opportunities that Arizona and Colorado lead the way in energy support for retrofits for existing buildings,would arise from trading allocations, if a Clean efficiency in this region. With program cut- better training, innovative policies, and coop-Power Plan scenario plays out. backs in recent years, Nevada is looking ahead erative marketing. to consider green bonds and financing. Utah FIGURE 1– ENERGY EFFICIENCY AS PERCENT OF RETAIL ELECTRICITY SALES BY STATE3.50% % of 2014 retail sales3.00%2.50% Michigan2.00% Minnesota1.50%1.00% Iowa0.50% Illinois0.00% Ohio Wisconsin Indiana Missouri Kentucky Nebraska South Dakota North Dakota Kansas Oregon Washington Idaho Montana Rhode Island Massachusetts Vermont Connecticut Maryland Maine New York New Jersey Pennsylvania New Hampshire District Of Columbia Delaware North Carolina South Carolina Arkansas Tennessee Georgia Mississippi Florida Alabama Virginia Louisiana Oklahoma Texas Arizona Colorado Utah Nevada New Mexico WyomingSource: American Council for an Energy Efficient Economy www.aesp.org | 2016 17

THE MIDWEST: PROGRESS FIGURE 2 – ACEEE 2015 STATE ENERGY EFFICIENCY SCORECARD RANKINGSON THE PRAIRIE Source: American Council for an Energy Efficient Economy There is good and bad news for energyefficiency in MEEA’s region. Energy efficiency Energy Efficiency Partnerships (NEEP) - the include: market animation programs; nextis cheaper in the Midwest than in any other country’s first REEO – has helped by advanc- generation or automated M&V tools andregion, and investment in it has nearly doubled ing codes and standards, buildings programs, technologies; new buildings benchmarkingin five years. Significant potential in the indus- emerging technologies, and market transfor- tools to influence real estate transactions;trial sector exists, and through innovation, mation strategie. It has also promoted collab- and financing programs. All eyes continue toprograms are kept extremely cost-effective. orative innovation as well as standardization in watch codes and standards move baselines.On the positive side, Iowa has interest in lever- evaluation, measurement and verification. Cities may be helping to change the game.aging funding with market focused programs; All this is happening under the shadow ofIllinois and Iowa show strong support for Forging ahead to embrace a next gener- budget unknowns, a question mark on thecodes and standards while Wisconsin lags in ation of energy efficiency, Vermont, Maine Clean Power Plan, and the uncertaintiesthat regard. and Maryland have the highest penetration associated with an election this year. of Advanced Metering Infrastructure (AMI) Also on the more challenging side, in the region. Massachusetts, proud of its Contributors to this article include:although state experiences are diverse, many Number One status in the ACEEE ranking Susan Stratton, Northwest Energyshare funding or other regulatory challenges. (see Figure 2) is committed to nation-leading Efficiency AllianceWisconsin Focus on Energy operates with energy savings goals of 2.9 percent of sales Ellen Zuckerman, Southwest Energycapped spending. The statewide Energizing and has added grid modernization projects. Efficiency ProjectIndiana program has been shelved, but that New York’s Reforming the Energy Vision reg- Julia Friedman, Midwest Energystate’s utility programs are holding steady ulatory proceeding, still unfolding, can open Efficiency Alliancethanks to cost recovery. Ohio and Michigan the door to greater integration of efficiency Cyrus Bhedwar, Southeast Energyare both skirting the line between support- and distributed resources in that state, and Efficiency Allianceing efficiency and repealing legislation that bring new focus to its vision of greater reliance Elizabeth Titus, Northeast Energyenables it. Support for Exelon’s nuclear fleet on market actors for delivery of efficiency Efficiency Partnershipsmay come at the expense of relaxing Ameren’s savings. Vermont has initiated an “Energy Sara Conzemius, Illume Advisingenergy efficiency goals, depending on the out- Transformation” that can help clean air with Lark Lee, South Central Partnership forcome of an Illinois bill. its strategic electrification of heating and Energy Efficiency as a Resource transportation sectors. Small but impressive,SOUTHEAST: COST, CAUTION Rhode Island demonstrates leadership from Elizabeth Titus isAND INNOVATION grid modernization to climate issues to public the senior manager buildings policies. of the Evaluation, The Southeast has a relatively short but Measurement andslow and steady history with efficiency. Though Maryland, New Jersey and Verification ForumSupported by the Southeast Energy Efficiency Pennsylvania are operating programs in con- at Northeast EnergyAlliance (SEEA), energy efficiency is poised strained, uncertain financial environments, Efficiency Part-for expansion in some states, in the shadow of solid gains are evident in the development of nerships where sheconcern about energy efficiency costs. Most an Energy Efficiency Resource Standard in facilitates variousnoteworthy and commendable is the region’s New Hampshire, a statewide ratepayer pro- research and protocol development projects,focus on and success with energy equity. At gram in Delaware, Sustainable Energy Utility information sharing and related activities instate level, Arkansas is achieving savings at one in the District of Columbia and increased pro- the region. Recent projects have addressedpercent of sales; Mississippi and Louisiana gram budgets for Efficiency Maine. emerging technologies, the need for marketare evolving more comprehensive programs. and sales data, and common measurementTVA is the first in the region to model energy SUMMING UP and verification protocols.efficiency as part of a recently approvedIntegrated Resource Plan (IRP) which could Summing up, policy developments in sev-pave the way for similar utility practice. eral states – California, Minnesota, New York,Meanwhile, Cyrus Bhedwar of SEEA also sees and Vermont – are challenging paradigms.“positive movement and policy environments Some of the trends to watch that can helpbut no clear steps” yet in South Carolina and reshape the landscape for energy efficiencyVirginia; he believes increased integration ofkey state agencies addressing energy efficiency,and more “consistent and collective conversa-tion around EE could positively affect energyefficiency in this region.THE NORTHEAST: NEXTGENERATION EE This region is known for high fuel costs,densely settled cities, and sustained supportfor energy efficiency. City-led building energyrating and disclosure programs in Boston,Cambridge, New York City and the Districtof Columbia are among the policies raisingthe bar on integrating energy efficiency intoreal estate decisions. For 20 years Northeast18 Association of Energy Services Professionals

BUSINESS MODELSThe Utility of the 21st Century:How Energy Services is ChangingBy Rick Tempchin The business model for electric power Electric power companies are working Initiative and Arizona Public Service’scompanies in the 21st century is undergoing a to optimize the grid from generation to con- Combined Advantage Plan.major transformation. By creating the energy sumption and create a platform that supportssolutions customers want, building smarter a new distribution model. Today’s customers To meet these customers’ changing needs,energy infrastructure, and getting the policies require a two-way, interactive system with “grid modernization must differ from utilityright, we will meet customer needs and con- multiple points of entry. They want to tailor to utility reflecting the unique geography,tinue to provide clean energy while promoting their energy use to make affordable choices history, situation, and regulatory structure forenergy efficiency. that give them options. For example, purchas- each company,” according to Ralph Izzo, chair- ing grid-interactive appliances and opting for man, president, and CEO of Public ServiceENERGY SOLUTIONS time-differentiated rates give customers the Enterprise Group (PSEG). Izzo sees electricCUSTOMERS WANT ability to make usage decisions that lower power companies playing a “critical role in their bills. ensuring universal access to new technolo- Customers now have diverse interests, gies, from thermostats that promote energyexpectations, and needs, and they increasingly Many commercial and industrial cus- efficiency to solar panels, batteries, and otherseek customized solutions and individualized tomers are looking to meet corporate sustain- devices. Utilities have scale and access to cus-renewable energy choices. To meet customers’ ability goals, while specific communities are tomer information that will allow for optimalchanging needs, electric power companies are interested in developing or utilizing renewable deployment of these new technologies in achanging the way they provide services to cus- energy and microgrids that may offer residents way that maximizes benefits at the lowest cost.”tomers and individualizing those services. smart city services, and improved reliability and resiliency. Utilities’ customers want to Energy efficiency programs are key to Electric power companies today benefit manage their energy use using connected reducing costs. According to a recent studyby transforming customers into partners, says devices, through web-based platforms and by the Edison Foundation Institute forTerry Bassham, chairman and CEO of Kansas individualized solutions. Examples include Electric Innovation (IEI), energy efficiencyCity Power & Light (KCP&L). “By building Pacific Gas and Electric Company’s On-Bill programs saved 155 TeraWatt-hours in 2014,stronger demand-side connections — with Financing loan program, Avista’s work with enough energy to power approximately 15our customers and grid-edge resources — we Spokane on the Smart City Accelerator, million U.S. homes. This also helped avoidcan transform today’s challenges into oppor- Baltimore Gas and Electric’s conservation volt- the generation of 107 metric tons of carbontunities for grid optimization and improved age reduction program to support EmPower dioxide emissions. In that same year, electricutilization,” Bassham says. Maryland, ConEdison’s Brooklyn-Queens efficiency expenditures rose 3 percent, for a total of $7.3 billion. www.aesp.org | 2016 19

Izzo credits energy efficiency investments Projects like these, Bassham explained, continued and improved electric service; gridas “wins for the customer, for the envi- allow electric power companies to help define reliability and flexibility, innovation, and evolv-ronment, and for our shareholders — and “what we think should be included in the defini- ing customer needs.they create jobs.” He said, “My company tion of the modern, reliable, and resilient grid.”estimates that reducing energy consump- The Clean Charge Network demonstrates: Because states have the primary role intion by two percent in New Jersey would ■■ Beneficial electrification coupled with regulating electricity, they are the test beds forput $130 million in the pockets of the the smart grid of the future. As the complexitystate’s consumers and would eliminate one more efficient grid utilization of the power grid increases, state policymak-million tons of carbon emissions — equal to ■■ Improved environmental sustainability ers, industry leaders, and stakeholders aretaking 200,000 cars off our roads.” ■■ Local economic development developing and incorporating affordable and ■■ Increased customer programs and reliable new services and technologies. There Electric power companies are in a better is no “one-size-fits-all” method for developingposition now to offer more cost-saving energy interaction rates because each state has a diverse set of ratemanagement systems. The rollout of smart ■■ Lower costs through large-scale methodologies and preferences.meters provides a digital link between theelectric power company and the customer, purchasing and planning There are also some core rate-makingand offers popular new services. Electric ■■ Proactive policymaking both at the principles that are universal. Rates shouldpower companies now provide budget-setting be designed to reflect costs, promote efficientand high-usage alerts, online portals with regulatory and legislative levels. energy use, and assure equity across customers.easy-to-understand graph- The five core principles of rate design are:ics, home energy reports, In addition, Bassham believes the Clean ■■ Economic efficiencyand easily downloadable Charge Network will attract the auto industry, ■■ Equityenergy usage data that cus- the EV industry, and battery and charging sta- ■■ Revenue adequacy and stabilitytomers can load into their tion companies to KCP&L service territory. It ■■ Bill stability, andpreferred app. These simple, will also help make the region more popular ■■ Customer satisfaction.smart services are powered for companies looking for state-of-the-artby the information collected electric integration. Businesses and customers Rate design options could include:by smart meters. will spur regional economic development by demand charges, buy-sell agreements, reducing out-of-pocket expenses on fuel and fixed monthly charges, time-varying rates, Today, more than auto maintenance. capacity charges, an installed capacity fee,eight million customers distributed generation output fee, or an inter-in California, Delaware, As a growing market, more than 435,000 connection fee.the District of Columbia, plug-in electric vehicles have been sold in theMaryland, and Oklahoma U.S. since the Chevrolet Volt and Nissan Leaf Policies that recognize existing unbundledare eligible to participate first came on the market in 2010, which is grid services and authorize electric power com-in a variety of smart pric- twice the adoption rate of hybrid electric vehi- panies to offer new, differentiated, value-addeding programs that reward cles when they were first introduced. grid services and rate designs that rely less onparticipants for reducing subsidies and more on the real (unbundled)consumption. These pro- The value-added service to owners of cost of serving customers will be critical tograms include: Baltimore Gas & Electric’s passenger cars extends to businesses that are meeting evolving customer expectations, whileSmart Energy Rewards, Oklahoma Gas & turning to electricity to power non-road equip- continuing to provide safe, reliable, affordable,Electric’s SmartHours, Pepco and Delmarva ment. Electric airport baggage carts, tractors, and clean energy to customers.Power’s Peak Energy Savings Credit, San forklifts, cranes, and other non gas-fueled vehi-Diego Gas & Electric’s Reduce Your Use, cles reduce emissions, fuel and maintenance In this new market, electric power com-and Southern California Edison’s Save Power costs, and our dependence on oil. panies are uniquely positioned to facilitateDay. Nationally, according to the Federal customer-driven energy transactions withEnergy Regulatory Commission, customer GETTING THE POLICIES RIGHT third-party providers. Electric power compa-enrollments in incentive-based demand nies are also able to address customer solutionsresponse programs increased by almost 70 Electric power companies, in assessing all and concerns on both sides of the meter in anpercent to more than 9 million customers from the opportunities that a smart grid offers, rec- ongoing effort to optimize the system and fos-2012 to 2013. ognize that rate reform is necessary to facilitate ter partnerships with customers.SMARTER ENERGY Rick TempchinINFRASTRUCTURE is the executive director for retail Bassham encourages electric power com- energy services atpanies to improve their low-system utilization, the Edison Electricwhich averages about 43 percent nationwide. Institute (EEI). HeIn its ongoing efforts to make existing infra- joined EEI in 1987,structure smarter and more resilient, KCP&L but before that heis investing $20 million in its “Clean Charge served as a seniorNetwork,” targeting the last sector of the econ- utility analyst for Synergic Resources Corp.omy that is not electrified — transportation. and also a research analyst at the U.S.The electric power company is building a net- Department of Energy. He is a foundingwork of electric vehicle (EV) charging stations board member of the Association of Energythroughout the Kansas City region, installing Services Professionals.and operating more than 1,100 EV chargingstations to support more than 12,000 EVs.20 Association of Energy Services Professionals



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