Energy Intel Visions of 2030

FIRST QUARTER 2022

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is produced by: CONTENTS Association of Energy Services Professionals 02 04 07 15215 S. 48th St., Suite 170 Phoenix, AZ 85044 A Note From Our Leading Through Disruption: Arizona Public Service (480) 704-5900 Board Chair An Introspective Conversation Evolving Residential AESP.ORG BY SUE HANSEN with AESP’s Outgoing Chair Energy Management to be a Clean Peak Resource EDITORIAL TEAM 10 BY JEN SZARO AND RAEGAN BOND BY KERRI CARNES, JAY DELANEY Ian Motley, Manager, AND TOM HINES Marketing & Communications Chris Baggett, APS 12 14 Jeff Ihnen, Michaels Energy Greg Wikler, CEDMC Consumer Engagement Hydrogen CHP – A Proven DEI 2030: One Industry. for Residential Demand Net-Zero Enabler Two Futures. Many GRAPHIC DESIGN Side Management Proactive Steps BY KURT WEST Angela Payton, Splash Printing & Marketing BY MIKE PHILLIPS BY QUINN PARKER AESP STAFF 16 18 Jennifer Szaro, President & CEO Digital Transformation Is Vision 2030: Suzanne Jones, Chief Operating Officer Driving the Future of HVAC The Sustainable Utility Shannon Britton, Vice President, Finance & Member Services BY KRISTY O’HAGAN BY TED SCHULTZ Jenny Senff, Senior Director of Content and PROOF 2 - MARCH 30 Programs www.aesp.org | first quarter 2022 1 Ashley Wilson, Director of Membership Jennifer Lee, Program Manager Ian Motley, Manager, Marketing & Communications Kimani Johnson, Marketing and Communications Coordinator Kristi Hewitt, Member Associate/Executive Administrator BOARD OF DIRECTORS Marie Abdou, National Grid Ariana Arguello, FortisBC Dave Backen, Backen Consulting Chris Baggett, APS Peter Banwell, ENERGY STAR®, US EPA Raegan Bond, Dunsky Energy + Climate Advisors Knox Cameron. DTE Art Christianson, The Home Depot Charmaine Cigliano, Orange & Rockland Sarah Colvin, Opus One Solutions William Ellis, Pepco Mark Gentry, Sodexo | Roth Joyce Bodoh, Rappahannock Electric Cooperative Jeff Brown, Public Service Company of Oklahoma Sue Hanson, Tetra Tech (BOARD CHAIR) Jeff Ihnen, Michaels Energy James Linder, TVA Danielle Marquis, Franklin Energy Tim Michel, PG&E Bill Norton, Opinion Dynamics Laura Orfanedes, ICF Quinn Parker, ENCOLOR Brian Pippin, JEA Laura Schauer, ILLUME Advising Katie Vrabel, Buckingham Companies All rights reserved. Contents may not be reproduced by any means, in whole or in part, without prior written permission from AESP. The opinions expressed by the authors do not necessarily reflect those of AESP.

A NOTE FROM OUR BOARD CHAIR By Sue Hanson, AESP Board Chair (2022-23), Tetra Tech You heard me talk about appreciation and And of course, no discussion about decarbonization Program Design and Marketing, PROOF 2 - MARCH 30 excitement for those of you who were at the AESP is complete without including transportation Including Demand Flexibility National Conference in Nashville in February. Those electrification. In particular, we heard that electrification words ring true beyond the purview of February’s of on-road fleet vehicles in the U.S. and Canada Talk to Kermit the Frog, and he will tell you that conference, spilling over (net-to-gross pun intended!) has the potential to reduce CO2 emissions in the it’s not easy being green. Talk to people who work into our industry as a whole. transportation sector by nearly one billion metric tons for utilities, and I bet they tell you the same thing. per year while simultaneously saving fleet operators First and foremost, we know that utilities must provide Just look at the AESP National Conference sessions money. Yet the process of transitioning fleets is not safe, reliable, and cost-effective power. In the closing (hopefully, you either caught them in person or easy. We learned about a pilot program that revealed conference plenary, we heard more utilities are adding virtually!) and the round-up of articles in this edition fleet managers' many challenges and how a cohort- “sustainably” to those core competencies. At the same of Energy Intel. Having been in the industry for years, based planning approach helped identify solutions. A time, utilities are working to strengthen grid resilience I can attest to the fact that these topics go beyond panel of transportation electrification policy, strategy, to minimize the consequences of extreme weather or standard energy efficiency and demand response fare and implementation experts representing IOUs physical or cyber-attacks. This ensures that affected and begin to address the challenges around diversity, discussed challenges and opportunities associated critical facilities stay powered on to provide essential equity, and inclusion. Our industry has embraced with fleet electrification. community services. We heard three examples of technologies and behaviors under the growing and utilities guarding against catastrophic events using in- evolving clean energy and climate resilience areas. Customer Engagement front-of-the-meter and behind-the-meter strategies such This is also reflected in AESP’s expanding topic areas as energy planning through load management, battery and offerings. If you need a refresher on all of the great How many utility customers know how much storage solutions, power shut-offs, and nanogrids. AESP member benefits, just reach out and ask! energy they used last month? Better yet, how many Lessons learned and results from two utilities related to customers read their bills? Engaging with customers is their rate design pilot programs were shared, including Let’s take a quick look back at some nuggets from a challenge. Advances in communication technology a flexible rate pilot and an innovative pricing pilot. the AESP National Conference. With so many insightful and apps have made it easier for utilities and customers These utilities explored the opportunities for applying conversations and interesting sessions and panels, it’s to engage with each other. Technologies like smart behavioral economics, social psychology, and choice hard to catch it all! (remember, as a member, you will thermostats and advanced meter infrastructure (AMI) architecture to improve enrollment, satisfaction, and have access to all of this great information) have facilitated a new understanding of consumer performance in rate programs. behavior pertaining to energy usage. Decarbonization We also know that energy efficiency and demand Customer engagement and behavior-based response programs are subject to regulatory capture Depending on where you are in the U.S. or energy efficiency programs are inextricably linked. and political pressure. Sessions at the National Canada, decarbonization has a different meaning. Behavior-based energy efficiency and demand Conference covered the gamut representing this There are many factors to consider, including energy response programs continue to evolve beyond the scenario. For example, some conference attendees equity, dual fuel utilities, grid resiliency, and balancing more passive home energy reports into more dynamic, participated in an engaging discussion addressing both natural gas and electric technology. Conference real-time, customized interaction with customers. whether complete redesigns of energy efficiency sessions covered the gamut, including hearing from Behavior programs are traditionally associated with programs are needed. On the one hand, energy industry experts who discussed what decarbonization energy savings, but recent studies have shown that efficiency programs are good, so it might seem means and where its future lies. Southern California such programs can also achieve substantial demand counterintuitive to radically redesign them. On the Edison (SCE) highlighted their December 2021 reductions. Programs can now be integrated with other hand, they need to change. But state regulation Building Electrification Application, which will work handheld electronics to encourage specific efficient is slow to change, which has led to inefficient program to accelerate efforts to meet California’s 2030 GHG behaviors at peak times. designs, execution, and oversight. As a result, many reduction goals by taking a step toward large-scale state energy efficiency programs don’t help the people building electrification with a market transformation they are designed to (or should) help. approach. 2 Association of Energy Services Professionals

Despite regulatory challenges, innovation in Historically, lower participation in energy efficiency renewable energy, a broader acceptance of energy program design and marketing does exist. Conference programs is common with hard-to-reach customers, efficiency, the rise of net-zero commitments, city and sessions shared insights from across the country into including rural, low-income, non-native English statewide pledges, the maturing of carbon removal a variety of newer ways programs and pilots are speaking, and small businesses. A couple of utilities technologies and markets, and the market uptake of a being delivered to targeted audiences. For example, that have been successful in addressing two hard-to- host of technologies collectively described as climate we learned about a ComEd pilot study in Chicago reach customer segments shared their stories. One tech. Utilities are a critical component of this picture. that compared the energy performance between two utility made AMI data a keystone in their low-income We have already seen that many utilities are prepared affordable multifamily buildings, an Entergy Arkansas outreach, program enrollment, and time of use rate to play their part through various means, such as program that is growing energy management controls transition. We also heard from a utility that has taken offering demand-side-management, renewables, and beyond purely residential applications to larger-scale a Cultural Competence approach with marketing EV programs, cleaning up the fuel supply mix, and ones in small to mid-size facilities, and about TVA’s demand response programs to breakthrough insular setting their own clean energy goals (see the article on EnergyRight School Uplift Pilot program that focuses barriers, understand cultural norms, and inspire diverse Vision 2030: The Sustainable Utility). on providing strategic energy management (SEM) customers to act. Other DEI-focused conference training and investment to schools in under-served sessions highlighted how organizations are driving Gearing up and getting trained in these areas is the areas. We also heard from two electric IOUs and change. For example, panelists shared ideas on how focus of the AESP Institute. I invite you to check out the one electric cooperative investing in energy storage in to have an impact by developing yourself, helping to list of trainings and register for AESP's Spring Training their service territories, and one technology firm that is build capacity within the team(s) that you influence in Ponte Vedra Beach this May 16-19. I think you will developing tools to assist in this process. and increasing awareness in your organization. One find that the menu of training opportunities offered session shared impactful DEI-related books, personal has expanded to meet the needs of those new to our As of late, no discussion is complete without assessing stories, ideas, and discussed DEI topics in-depth. industry as well as to provide training opportunities to the struggles linked to the COVID-19 pandemic, which the more seasoned professionals. forced many people into income brackets that can Phew! No wonder I felt exhilarated and exhausted be categorized as low- and moderate-income (LMI). at the same time by the end of the conference (and I As I come to the close of my first letter as AESP Board To meet the shifting needs of their customers, utilities barely touched the surface!). Thankfully, the topics and Chair, I want to extend my thanks and appreciation to have started to increase support and resources for conversations don’t end when the conference ends. This both AESP for providing a forum for my own ongoing vulnerable communities. Some regulatory bodies issue of Energy Intel continues to highlight technologies professional growth (and I hope yours as well!) and have even begun enacting new legislation calling and behaviors under the clean energy, climate for all of you that I have met through my engagement for increased investment and focus on equity, social resilience, and DEI areas. Collectively, these efforts will with AESP, supporting me along this journey. Not only justice, and offerings for LMI customer segments. We improve infrastructure through strategic investments in does AESP thrive through its membership, but we, as heard presenters discuss data-driven approaches to energy-efficient housing and transportation and create members, also thrive through our engagement with more effectively identify LMI customers, build outreach, a more diverse workforce. For example, eMobility each other. and design program strategies for this segment. trends are undergoing a fundamental transformation, driven by environmental concerns, climate change, About the author Diversity, Equity, and Inclusion urbanization, and how we think about fossil fuels. Innovations are taking place at a rapid pace along the Sue Hanson Organizations are developing strategies that create entire eMobility value chain (see the article on Future and support an equitable, inclusive, and diverse eMobility Trends). Sue is a Senior Director at Tetra workplace throughout the energy industry. I’m proud Tech and AESP Board Chair. and excited that AESP is among those organizations. Climate resilience has become the Holy Grail for She is a nationally recognized In fact, AESP launched the DEI Council in March companies, communities, cities, and countries alike. leader in the energy industry, of 2021, which is comprised of both members and This means we will see a direct and substantial impact with more than 20 years of representatives from AESP’s Board of Directors who on customer investments in energy efficiency, demand experience working to support have a dedicated interest and commitment to furthering response, and distributed energy resources (see the demand side management DEI and AESP’s role on the issues. The DEI Council article on Consumer Engagement for Residential programs. Her energy industry was instrumental in organizing sessions for this year’s Demand Side Management). In fact, in many ways, experience includes program evaluation, program planning, program National Conference. Candid discussions on DEI were I think customers may simply not even have a choice implementation, and market research services. Sue’s industry thought provided in both formal and informal sessions. due to the trickle-down effect, which will come from leadership has led her to be part of the US Department of Energy a wide range of market forces, such as the growth of and the US Environmental Protection Agency’s SEE Action teams that developed the SEE Action Guide for States: Guidance on Establishing PROOF 2 - MARCH 30 and Maintaining Technical Reference Manuals for Energy Efficiency Measures and the ENERGY STAR® Retail Products Platform (RPP): Conditions and Considerations in Evaluating Market Transformation Programs and Evaluation Guidance for RPP Documents. Sue also provides training to AESP members for both the Principles of Evaluation and Research and Impact Evaluation Certificate courses. www.aesp.org | first quarter 2022 3

Leading Through Disruption An Introspective Conversation with AESP’s Outgoing Chair In December of 2021, Jen Over the last five years, Raegan has shared strategic insights and critical PROOF 2 - MARCH 30 Szaro, AESP’s President and industry expertise with the AESP community as a key member of AESP’s Board CEO caught up with Raegan of Directors. Just as she took hold of the gavel as AESP’s newest Board Chair Bond, Partner at Canadian- in February of 2020, our world began to descend into unforeseen chaos. based consulting firm, Dunsky COVID-19 crept through cities and towns throughout the globe, leaving a Energy and Climate Advisors, wake of loss and financial disaster in its tracks. Governments and businesses just as she was wrapping up the last month began closing their doors and sheltering at home to stop the spread of this of her two-year term as Board Chair. She’s deadly virus and the economic and human impacts of COVID-19 began to be spent her career helping utilities and other felt by everyone. It was a difficult time to take the reins of a community-focused organizations throughout North America pivot membership organization that depended on deep engagement and in-person to address the never-ending list of challenges events to move its mission forward. facing our energy sector. In 2020, just as she began her term, the COVID Pandemic With the full backing of AESP’s Board of Directors, Raegan and the staff at changed the game in ways she never could AESP, led by its newest CEO, Jen Szaro, began efforts to pivot the organization have anticipated. to a more flexible, digitally-savvy, member services model. Two years later, Raegan’s leadership has helped evolve AESP into just that…an organization 4 Association of Energy Services Professionals that is better positioned to serve a broader array of members whether they are just starting out or entering the pinnacle of their careers. During her tenure as Chair, AESP has transformed its brand and expanded its digital offerings tenfold, while also launching the AESP Institute, a career development suite that includes both online instructor-led and self-paced digital training offerings and a new career mapping tool. AESP also launched its new Diversity, Equity and Inclusion Initiative, revamped its mentoring program and started its Great Lakes Chapter, all while finding new and creative ways to engage with its members remotely. Jen Szaro caught up with Raegan for a brief chat as she prepared to pass the gavel onto AESP’s incoming Board Chair, Sue Hanson. [JEN] What led you to the clean energy sector and what has your career journey been like thus far? [RAEGAN] I started working in the year 2000, almost 22 years ago, and I had studied Environmental Science in school. I chose Environmental Science because it was an interdisciplinary degree and I got to study a little bit of everything, I’m very much a generalist at heart. In my master’s degree, I became more interested in energy, and when you look at environmental challenges in the world like climate change, it all boils down to energy as the primary underlying challenge. I fell into consulting, which was an amazing way to start

my career, because in consulting you get to do a lot of [RAEGAN] I first heard about AESP at the Ontario More broadly, COVID-19 also changed how we different projects for a lot of different clients in a short Power Authority (Now IESO) back in 2006. I attended work. Everyone had to adjust to either a hybrid or span of time. Then I transitioned to the Ontario Power an AESP event in Dallas and it was invigorating and remote work environment. That clearly has touched Authority, where I got deep into the energy efficiency had a real sense of community. One of the things I love every part of society, including our own members and world and learned about program design and delivery, about AESP is that we look at big picture issues, but we of course, and AESP itself. You came on as our CEO while managing provincial programs for residential break them down into very practical steps so it’s very in April of 2020, two weeks after the world had just customers. In 2011 I transitioned to an electric applied, which was so helpful to me at that stage in my shut down so there have been significant challenges utility in Ontario named PowerStream where I led a career. Then I was asked to be part of the committee for us as an organization especially trying to manage $400 million portfolio of demand-side management that set up our Ontario Chapter. Then I ran for a Board the transition with everyone while we were all remote. programs and grew my team from just five people to seat and after my first term, was asked to serve on It's insane to think that we haven’t seen each other in 80. I learned a lot in that role about leadership and AESP’s Executive Committee and finally, my latest role person since January of 2020. mergers and acquisitions. That was really a wonderful as Board Chair. experience as well. Then in 2018, I decided to broaden [JEN] It’s definitely been a different process of into areas beyond pure energy efficiency which led me [JEN] Thinking back on your time as Board Chair, communication to take on a leadership role with a to take the role I’m in now as a partner at Canadian- what events have had the greatest impact on our remote team. We’ve had to work so hard with the team based consulting firm, Dunsky Energy Climate and industry in the last two years? on to make that pivot successfully and I also wanted Advisors. Our mission is to accelerate the clean energy to ensure that we took the opportunity to learn from transition in Canada and the U.S., so I get to stick to my [RAEGAN] It’s impossible to talk about 2020 these experiences and reapply those learnings in a energy efficiency roots but also have a strong focus on and 2021 without talking about COVID-19. While I way that makes us stronger, more resilient, and more sustainable transportation, as well as renewables and wish that wasn’t one of the top things we had to take efficient in how we operate moving forward. It’s truly other distributed energy resources. I’m very lucky to be on during my tenure, it certainly took center stage. been a challenge to manage a team that wasn’t used working at a time when the energy sector is changing COVID-19 impacted our industry in so many ways. to operating remotely while also flipping all of our so much. The diversity of what I get to do is so exciting! Many of our members’ programs and initiatives were offerings and interactions into digital formats in a way It’s so important to do work that I’m passionate about. either cancelled or put on pause. We also had member that still brings that connection and member value that companies either furloughing or laying off staff, so AESP in known for. [JEN] How did get involved with AESP? there have been massive impacts to the clean energy workforce and our ability to make an impact over the last two years. PROOF 2 - MARCH 30 The AESP Career Map, along with the AESP Institute, are propelling the next generation of clean energy professionals forward. Learn more at aesp.org. www.aesp.org | first quarter 2022 5

[RAEGAN] I couldn’t agree more. The world is [JEN] It's both exciting and a bit scary because we organizations. Our organization should be a symbol going through this experiment that we never wanted are not that far away. It really did inspire me to see the representing that integration. I’ve recently seen a to experience but it’s forced us to become nimbler and level of global focus and agreement that we need to wide range of organizations, and even some local more creative. take decarbonization efforts seriously and move to a governments step up and join the discussion, and I’m more progressive approach to these issues during this very pleased with how broad our range of members [JEN] What other trends within the energy industry year’s UN COP 26 meeting. Here in the U.S. there is has grown. have you noticed? also a large focus on energy equity in President Biden’s initiatives related to climate. Are you seeing the same [JEN] Looking back, is there anything you would [RAEGAN] On the energy side of things, one emphasis in Canada? have really liked to see happen in 2021 that could trend I’m seeing increasingly is the move away from have moved our industry forward? a narrower focus on energy savings to a broader [RAEGAN] Yes, we are increasingly seeing this lens of mitigating climate change impacts. Another movement across the industry related to diversity, [RAEGAN] Electric transportation really needs major trend is a stronger focus on ensuring a just clean equity and inclusion and the just transition to a low- to be pushed toward widespread adoption more energy transition for all members of society as we move carbon energy economy. The landscape is a bit rapidly, especially considering the climate challenges away from carbon intensive energy resources. I think different in Canada, but I think the theme is the same. we’re facing. It’s a classic example of beneficial we really are seen as an industry that is broadening I’m so onboard with this approach and excited to see electrification, and If done correctly, it will become an its focus. We’re taking a step back to view our role in it as a key component in our nation’s strategy. In some enormous positive change for consumers, the economy solving broader climate and societal issues. In both ways it can be daunting to think about, because trying and electric utilities in general. We’ve yet to see a Canada where I am and, in the U.S., we had federal to get the world to change how it produces and uses well-coordinated approach to integrating EVs into grid elections where both elected leaders had very strong energy, on its own, is already somewhat challenging, infrastructure and energy supply chain. It’s a difficult climate plans that included heavy emphasis on making and then you layer on other societal goals on top of problem and it feels like a missed opportunity. energy a clean energy transition. This year we also that. Change management related to our energy had COP 26 in Glasgow, of course, which was a management patterns is such a hard thing on its own, [JEN] What do you like to do when you aren’t major event, so we’re really seeing this increased but it can be especially challenging when you have to working to save the planet? conversation around the urgency and an imperative do things at breakneck speed while also ensuring that of climate change, which is interesting in the time of those solutions also address multiple dimensions such [RAEGAN] I love spending time with my family, COVID given that climate change can be a somewhat as cost and climate justice simultaneously. I have a 9-year-old son, a husband, and a dog that esoteric and hard to grasp concept in stark contrast to I love to pieces. We love hiking, and every Sunday the tangible and immediate near-term challenges that [JEN] AESP is trying to support our members as during this past winter we explored the local area COVID has presented that have to be addressed. they tackle these types of challenges. What are you and searched for new parks and trails to hike down, most excited about related to our work in this area? and it’s just been wonderful to have that time together [JEN] I’m pleasantly surprised that we’re all having outdoors, especially with the level of the stress our so many conversations around climate change and [RAEGAN] We launched our Equity in Program society is coping with right now. We’re also massive its long-term impacts to our planet. It’s just a different Design Training, as well as our newly formed Diversity board-gamers, so we spend a lot of time geeking out cadence of discussion than we were having five to Equity and Inclusion Council back in April of this year. and playing together. seven years ago. It seems like people are starting to They’ve already made great progress in reviewing really feel the urgency of climate change with all of our internal policies and practices. One of AESP’s the different natural disasters we’re now experiencing largest areas of focus is on cultivating a community ranging from more severe hurricanes and floods to of clean energy professionals and we all need to be fires and droughts depending on where you live in the part of ensure that this is an inclusive culture, so these world. Every single year it seems like disasters are just new programs and initiatives will help bolster our piling up and we’re starting to see financial investors success. It’s important that we lead by example as an and re-insurance agencies give these risks more organization to create a diverse, equitable, and more consideration whether through bond ratings or ESG inclusive community and I’m proud to have played a analyses. leadership role in that effort. [RAEGAN] I’m excited because I feel that we’re Thinking back, I think that our membership at the start of a tipping point of awareness and restructuring was what I was most proud of this year. It alignment on the need to act. Private sector financial supports our goal of being more inclusive through more investment companies are now coming to the table equitable dues rates for smaller organizations and a with requirements for climate risk assessments. These more diverse set of market players while also helping are systemic changes that will really accelerate the allow smaller businesses obtain a seat at the table. pace of change. A net zero carbon goal by 2050 is We should try to dissolve this mentality of exclusivity, not really that far away so we’ve got to move faster if and the different problems and aspects of the energy we’re going to meet those timelines. industry should be seen as a single integrated issue rather than multiple silos to be tackled by isolated 6 Association of Energy Services Professionals PROOF 2 - MARCH 30

Arizona Public Service Evolving Residential Energy Management to be a Clean Peak Resource By Kerri Carnes, Jay Delaney and Tom Hines Arizona Public Service Company (APS) serves more than 1.3 million homes and Source: EnergyHub businesses and is a leader in delivering affordable, clean, and reliable energy. In PROOF 2 - MARCH 30 January 2020, APS made a commitment to produce 100% clean, carbon-free energy to our customers by 2050. To be clear, this isn’t “net zero” - we mean zero carbon. To get there, our goal includes a nearer-term 2030 target: a resource mix that is 65% clean energy, with 45% of our generation portfolio coming from renewable energy. APS will end all coal-fired generation by 2031 (seven years ahead of our originally proposed schedule). APS’s clean energy plan is focused on achieving environmental and economic gains, all while maintaining affordable, reliable service for our customers. And we want to partner with our customers to do so. How? By innovating around demand-side management (DSM), for starters. The traditional DSM portfolio can exacerbate the renewable energy “duck curve,” named after the load shape on a graph showing the difference in electricity demand and the amount of available solar energy throughout the day. In APS territory, a record amount of residential rooftop solar was installed in 2021. The residential solar capacity installed in APS service territory in 2021 was 20% higher than in 2020. APS ranks 4th for residential solar capacity installed trailing only larger California utilities. Having said this, the one thing APS didn’t want to do is to give up on the idea of important energy efficiency programs that benefit all our customers, but APS did need to shift our focus to managing and reducing energy usage during our system peak. This led APS to create innovative, and clean-energy-promoting advanced rates and load-shifting demand-response programs, such as our Rewards programs—and then to rethink customer engagement and program scale. Our successful customer to grid solutions portfolio includes the following customer programs: Cool Rewards, Storage Rewards, Reserve Rewards and Solar Communities. APS deploys utility-operated thermal and chemical energy storage solutions that are customer-facing programs. APS operates all technology solutions in partnership with EnergyHub, which allows APS to achieve use cases and to assess the value of managed distributed energy resources (DERs). These technology solutions reduce system and feeder voltage support and targeted load reduction, integrate renewable energy, and have on-demand capacity. www.aesp.org | first quarter 2022 7

In 2018, APS launched ‘Bring Your Own Thermostat’ (BYOT) which has now In 2020, APS launched our online Marketplace, a shopping site that offers transitioned to full-scale demand energy response aggregation. The APS Cool customers energy-efficient products, provides customer education, and drives market- Rewards program helps to manage energy use when energy demand is high, based savings. Customers can shop smarter on APS Marketplace by reading product typically on very hot days. APS hosts up to 20 events a year, customers have their reviews and ratings, comparing prices and energy-efficiency scores, being better smart thermostats lowered by the manufacturer before 3 p.m. to pre-cool their homes. informed and motivated to buy demand-friendly electrical products. APS Marketplace When pre-cooling during the early afternoon, solar is abundant, which means also facilitates a more seamless customer enrollment into our Cool Rewards more clean energy. During an event, smart thermostat manufacturers will raise the program through the pre-enrollment process. Our pre-enrollment process allows thermostat temperature a few degrees above the set temperature for 2-3 hours. APS our customers to receive their instant rebates at the point of purchase, which creates customers who elect to participate in the Cool Rewards program will receive a one- more affordability for our customers. After our customers connect the thermostat(s), time enrollment credit of $50 and an annual participation credit of $35. The APS they can participate in demand response events. In 2021, 33,662 demand response Cool Rewards program can reduce emissions with pre-cooling and consumption is pre-enrolled thermostats were sold through APS Marketplace. APS Marketplace shifted to mid-day when emissions intensity is lowest. During the 2021 season energy plays a critical component to expand, integrate and utilize a network of DR-enabled consumption was reduced by 284 MWh which suggests the program reduces energy connected devices to help meet APS’s future resource needs. The site also provides use, in addition to shifting load. growth opportunities for new strategies such as electrification. Car Marketplace offers electric vehicle (EV) information and online shopping, vital for educating customers The Cool Rewards program has scaled significantly since its inception. At the end and driving EV adoption. of 2018 there were more than 4,000 smart thermostats enrolled, and by the end of 2021 there were more than 56,000 smart thermostats enrolled. The Cool Rewards APS understands that electric vehicles are becoming more popular among program is now recognized as one of the five largest BYOT programs in the country consumers and will be a driving force in ensuring a cleaner energy future for Arizona. and is considered one of the largest utility-managed thermostat virtual power plants. The number of EVs in APS service territory is more than 26,000 and growing, and we During the summer months of 2021 alone, Cool Rewards participants shed nearly are continuing to build the infrastructure that drivers need for a reliable EV experience. 80 megawatts of electricity from the APS system, an equivalent amount to what a APS is expanding our EV portfolio by offering more rebates, education, and programs small power plant may produce. The energy avoidance saves our customers money, for our customers. benefits the environment, and builds a smarter electrical grid. The program has been given the 2021 ENERGY STAR® Partner of the Year award for excellence in customer Our Take Charge AZ Commercial pilot program covers the cost of the charger, programs from the Environmental Protection Agency and is under consideration for installation, and maintenance for five years for Level 2 EV charging equipment at 2022. APS Cool Rewards has surpassed the halfway mark to its goal of 100,000 businesses, government agencies, non-profits, and multifamily communities. The enrolled smart thermostats, our goal for the end of 2022 is to have 110,000 smart customer pays for the energy used by the chargers, and we encourage customers to thermostats enrolled. charge during off-peak times when energy prices are lower, including mid-day when solar energy is abundant. At the end of 2021, the program energized 103 sites, including 62 sites, and installed 254 commercial Level 2 charging plugs. The Take Charge AZ pilot also has a direct-current fast charger (DCFC) component with the goal of reducing range anxiety by providing EV drivers with additional DCFC stations in APS’s service territory outside of the metro Phoenix area. The stations, located in rural areas across the state, will alleviate range concerns and enable more long-distance travel in Arizona. APS has also partnered with Chargeway and six local dealerships in our service territory to provide educational beacons, an interactive tool showing customers how EVs can meet their driving needs. The beacons provide a charging station map, vehicle comparison tool, fuel savings calculator, and a trip planner tool to help customers visualize their travel and identify EV charging stations along the way. The program also includes a dealership education component to help provide additional EV knowledge to dealership sales staff to assist in advancing EV adoption. The APS SmartCharge program is another program available to our customers who own an EV and want to help APS understand the future energy needs of EV adoption in Arizona. The APS SmartCharge program encourages EV owners to share data on their driving and charging behavior by either installing a data sharing module in the diagnostic port of their car or granting permission to share their car account data using an API with the implementer. SmartCharge participants receive an incentive of $85/year, which includes a $25 sign up incentive and $5/month incentive for providing ongoing data. Once one year of data is collected, APS will phase in a reward offering that will encourage favorable charging behaviors. 8 Association of Energy Services Professionals PROOF 2 - MARCH 30

In addition, APS also offers an EV Smart Charger rebate. Our customers can About the authors receive a $250 rebate when they purchase a qualifying Level 2 smart charger. The Level 2 charger can communicate with the customer, vehicle, and the utility. This Kerri Carnes makes it easier for our customers to charge their vehicle when energy costs are lowest and clean energy production is at its highest. The charger is connected to the internet Kerri Carnes, Manager of which allows the customer to collect usage data, schedule charging and participate Customer to Grid Solutions Product in future APS programs to help shift usage when there is high demand. Our customers Development & Strategy at can purchase qualifying chargers from any vendor and claim their rebate on APS Arizona Public Service, overseas Marketplace. Customer participation in our EV programs will be key to helping APS the development and strategy understand how our customers are using their EVs so we can prepare for a future with of innovative customer-focused higher EV adoption in Arizona. solutions to help better manage the grid while helping customers By expanding energy storage in 2022, APS will be able to deliver more clean achieve their own clean energy goals. Carnes has worked at APS energy when needed through battery storage. When solar production declines since 2005 in various roles, including nuclear, transmission & late in the afternoon and energy usage is still high, APS and other utilities need a distribution construction, supply chain, regulatory and customer reliable, flexible source of power to serve our customers. Currently, the APS Storage experience. Rewards program provides a battery system with an inverter, in exchange for a one-time incentive of $500 for utility operation of DERs. APS owns and operates Jay Delaney the batteries and will operate via programming, schedule, or dispatch. The battery systems are dispatched on-peak to align with demand rates and grid needs. The Jay Delaney, Supervisor of Customer significant learnings from Storage Rewards contributed to the development of APS’s Solutions, at Arizona Public new Residential battery pilot program. Service manages the demand-side management portfolio of energy The Residential Battery Pilot program will help APS learn about battery performance efficiency programs, including in a variety of conditions. The program will also create value for customers through Solutions for Business, Energy improved management of energy use at their residence and help to reduce stress on Star, Home Performance and the the grid. APS will collect the battery performance data and evaluate the technologies Rewards demand-response program. Jay joined Arizona Public Service capability to provide grid support. APS customers will receive an incentive for in 2017 and worked in technology assessment and advanced grid participating in either data only or data and battery management options. These technologies before taking on his new role. Jay previously owned an energy storage programs enable APS’s existing solar resources to help meet peak electrical contracting and solar installation business in Phoenix. needs reliably with clean power, even when the sun is not shining. Tom Hines With the abundant sunshine in Arizona, solar will continue to expand throughout the state. The APS Solar Communities program is a unique opportunity for customers Tom Hines is a residential energy who may not otherwise have considered solar as an option. We partnered with efficiency expert with more than customers to provide either rooftop solar (residential) or solar parking canopies 30 years of experience in program (commercial) to help advance renewable energy in Arizona. APS owns, operates, design, implementation, evaluation, and maintains these solar systems, and customers receive a monthly credit on their strategy, and regulatory policy. energy bill. We have partnered with our limited-income and moderate-income, Hines is currently a principal multi-family and non-profit customers and installed 721 solar systems. APS will be and founder of Tierra Resource extending the Solar Communities program for an additional three years. The program Consultants. Since 1997, Hines extension will add more solar to our renewable portfolio and allow more customers has worked with Arizona Public Service Company (APS) in designing, to benefit from the monthly bill credit. developing, and managing the company’s portfolio of energy efficiency and distributed energy resource programs, including: APS also provides support to our customers who want to adopt technologies such new homes, existing homes HVAC, home performance, consumer as rooftop solar and batteries on their own. Not only will solar energy reduce their products lighting, pools, multi-family, behavioral conservation, energy bill, but they will also help us meet our clean energy goals and benefit the demand response, energy storage and EV managed charging. Hines environment. We are currently making the WattPlan solar calculator available to our has earned more than 20 industry awards for successful customer customer. Our customers can get an estimate on solar savings and see if solar is a programs including ACEEE, AESP, ENERGY STAR, ESIG, PLMA, and good option for their residence based on their roof, electricity use, and rates and it SEPA. Throughout this time, Hines has worked closely with industry also informs our customers about tax credits and rebates available to them. stakeholders to drive market transformation, including utilities, government agencies, NGOs, builders, contractors, realtors, lenders, As more energy-saving technology has become available, APS has been able to raters, OEMs, DER aggregators and other trade allies. add new smart customer products to our already comprehensive customer energy efficiency and demand-side management program portfolio. Our DSM portfolio www.aesp.org | first quarter 2022 9 has scaled very quickly over the last five years, and we understand that to meet our clean energy goals our program participation and program offerings will need to expand as well in the coming years. All these programs and customer partnerships play a vital role in advancing clean energy in Arizona. APS is continuously identifying technologies and developing programs to offer our customers that help manage the demand to the grid. PROOF 2 - MARCH 30

EXCLUSIVE TO AESP CONSUMER ENGAGEMENT FOR RESIDENTIAL DEMAND SIDE MANAGEMENT By Mike Phillips There is a lot of talk about changes at the grid edge when discussing how demand The solution is to make sure the electrified appliances in a home are connected PROOF 2 - MARCH 30 side management can help utilities meet their decarbonization goals. In the residential and can be controlled to better match the energy supply and capacity constraints case, the grid edge doesn’t just include connected technology like smart meters and of the grid. Increasingly this needs to be fully dynamic and real-time, so behavioral devices in the home – what is really at the edge are the people living in and caring measures like time of use rates or demand response events won’t be enough. And for homes. Even with increasing automation of energy resources in homes, there is no most consumers don’t want to fully give up control of devices in their homes to their getting around the fact that consumers have a big impact on how energy is used in utilities. Fortunately, there is a good answer in between these extremes: applications their homes. This is not just about remembering to turn off the lights – instead it is about and automation that consumers decide to use to address their needs (“make sure my helping consumers make their homes work well, including from an energy perspective. car is 80% charged by 7am”) and that then interact with utilities and energy suppliers This means helping people be aware of energy use in their homes, helping them track to find the best time to use energy. This requires engaged and trusting consumers. down problems and, most importantly, encouraging the adoption of electrified smart appliances which will provide significant energy benefits while improving the comfort, So the key question for the future of residential demand side management is how convenience, and health and safety of homes. to engage consumers and have them opt into the control and flexibility needed for a more resilient grid with more and more low carbon but variable energy sources. The clear path to a lower carbon energy future is more and more electrification of end uses – including transportation and energy use in homes and buildings. We need The conventional wisdom has been that you cannot engage consumers around efficient heat pumps for HVAC, water heating, and clothes dryers, induction ranges energy. Everyone in the industry has heard about an early study from Accenture for cooking, and EVs for transportation. And we need to encourage consumers to that consumers think about their electric bill 6 minutes per year. Accenture updated eliminate a long tail of energy hogs in homes – replacing old ACs with modern efficient this study in 2016 and found that the typical customer spends just 8 minutes a year versions, fixing leaks so the well pump doesn’t run all day, replacing old pool pumps interacting online with their utility. with modern electronically controlled versions, and so on. The key to accelerating electrification is having engaged consumers who better understand energy use in their But, at Sense, we have been working to change this and have found that we can homes to help them make good decisions about upgrades to their homes. indeed engage consumers if we follow three main principles: While we are at it, we should not miss the opportunity to make these new electrical • We need to create real-time experiences for people. By giving people loads smart and connected! Without automation and control, these new loads just stack up and will exceed capacity limits across the grid. For example, an Avista study real-time views into energy consumption and other activity in their homes, energy in 20201 showed that if 50% of homes have a single EV, 20% of transformers and use suddenly becomes tangible and actionable in ways that just was not possible 47% of distribution feeders will be above capacity . with historical energy views that have been constrained by existing utility meters. 1 https://apiproxy.utc.wa.gov/cases/GetDocument?docID=4&year=2020&docketNumber=200607 • We need to provide detailed, device level breakdowns. Knowing 10 Association of Energy Services Professionals your home is hitting a new energy peak or using more energy than efficient neighbors is not enough - knowing that your heat-pump is stuck in backup heat mode, or your AC uses four times as much energy as a modern replacement can become a driver for consumer action and utility programs.

• It needs to be about more than just energy. Once you understand The good news is that there is a next generation of AMI meters which have all of these capabilities and we are working closely with industry leaders to bring these to energy use in your home, even with a real-time and detailed application, it is still market along with a set of consumer facing and utility applications to fully enable the not interesting enough to stay engaged. But by broadening engagement beyond grid edge. energy to home activity and the health and safety of your home, we have found that we can keep users engaged - even after years of usage. The transition from today’s demand management to the 2030’s will look a lot like what happened in telecom over a decade ago. When a phone was just a phone, All of the above is possible today with retrofit behind-the-meter hardware. consumers bought separate cameras, music players, and navigation systems, but Consumers have been purchasing home energy monitors that are installed in their once smartphones had enough computation and networking, and were able to run electrical panels and provide the real time experiences described above. consumer facing applications, an entire new market exploded with huge benefits to consumers. It transformed the telecom industry - and our daily lives, as well. The same Sense users open the application an average of ten times per month and spend change can and should happen in the energy industry, delivering significant gains more than two minutes per session on average, which translates into more than 30 for demand management programs and transforming utilities’ relationships with their times the utility online engagement from the Accenture study. And active users spend customers. even more time than this. For Sense, over 60% of users are long term users of the application – continuing to stay engaged even years after install. More than half This next generation of AMI meter is the key asset that utilities control that can of those open the application on any given week, and those people open the app enable this transition. By no longer thinking of a meter primarily as a meter (like when an average of seven times per week. So, it is clearly possible to fully engage with a a phone was just a phone) but instead realizing that it can and should be the key broad set of users – but this capability is only possible today with the expense and platform at the intersection of energy and the consumer smart home world, utilities effort required to install consumer hardware in a home. can play the crucial role to enable this transformation of energy use in homes. With adoption of EVs, this extends to playing a key role in the decarbonization of the The massive opportunity for the utility industry is a next generation of AMI meters transportation sector as well. Buildings and transportation combined add up to more that can run applications like Sense as software – with no additional hardware than 60% of energy use in the US so we must address both to meet our climate goals. needed in the home. AMI meters already have all the components needed (digital sampling of power, edge computing, networking), but just have not been nearly good To succeed, these new meter platforms need to become much more software- enough to provide a real-time detailed application for consumers. centric and open to a range of both utility facing and consumer facing applications. Meters being deployed now will be in service through 2040 and beyond—we know To provide a true real-time experience to customers, next generation smart meters the energy transition needs to happen in this timeframe and we don’t know all the must have three capabilities: changes that will happen between now and then. By fully embracing capable meter platforms with the ability to run a range of applications, we can support an evolving • High resolution waveform data landscape of distributed and flexible energy resources and create the engaging consumer experiences that we need. To support a detailed view into activity in homes and to diagnose a range of failure About the author modes in devices and the grid, applications like Sense use a technology called load Mike Phillips disaggregation. Even one-second interval data is not sufficient for real-time load Mike Phillips is the CEO and disaggregation. Instead, a continuous co-founder of Sense, whose grid stream of voltage and current waveforms edge intelligence, embedded must be sampled tens of thousands of times directly in smart meters, gives per second. customers a live view of what’s on in their home, driving • Edge computing engagement and action for more effective demand management Given the high data rates required, the main and energy savings programs. A pioneer in the field of machine work needs to be done in the meter itself. learning, Mike began his career in speech recognition. He worked There are now a number of meter-based first as a researcher at MIT before going on to co-found two speech edge computing platforms able to run recognition companies (SpeechWorks and Vlingo), which brought applications. The key is to have enough groundbreaking speech recognition capabilities to call centers and to edge computing power that has access to mobile phones, including the technology that would go on to power the raw data stream. virtual assistants across hundreds of millions of phones. Mike’s passion for machine learning led him to found Sense in 2013, • Low-latency networking bringing the power of machine learning into the home. Meters typically use a mesh network designed for reliability but not speed. To support a real-time consumer experience with delays within one or two seconds, meters need an additional networking path for consumer applications, which can be Wi-Fi or cellular. PROOF 2 - MARCH 30 www.aesp.org | first quarter 2022 11

HYDROGEN CHP A PROVEN NETZERO ENABLER By Kurt West, 2-G After being discussed for decades, hydrogen is great flexibility and enhanced energy security, as it Hydrogen can be and is being added to the natural poised for large-scale adoption in the energy supply. As can be generated from a variety of resources either gas grid at many locations around the world. And low-carbon fuel options evolve in the coming decades, locally/ on-site or centrally for distribution. technology providers in many industries are taking hydrogen will play a large role in decarbonizing our an increasing interest in developing new hydrogen world both thermally and electrically. In addition, hydrogen is an attractive complement to capable products. Given its benefits and flexibility, another major trend in decarbonization: electrification. hydrogen is earning increased attention as an There are several factors resulting in growing Major challenges encumber electrification, including important fossil fuel alternative. Converting existing demand for hydrogen as a fuel source. First, it as aging grid infrastructure, the intermittent nature of infrastructure to run on 100% green hydrogen is has unique and highly compelling characteristics. most renewables and the energy density constraints rapidly being recognized as an effective low cost, Hydrogen emits no carbon in combustion and can be of battery storage are all helped by the addition of low risk way to decarbonize both electric and thermal considered a zero or lower-carbon fuel, depending on hydrogen technology. energy requirements. the energy source used in its production. It also offers A post carbon energy system requires multiple solutions deployed together PROOF 2 - MARCH 30 12 Association of Energy Services Professionals

2G Energy Hydrogen CHP System One example are the numerous combined heat and Hydrogen CHP deployments began more than and updating the software is all that is required. This power systems (CHP) projects operating on hydrogen a decade ago, with the first projects in Germany, approach has great economic benefits, as an increase around the globe. For them, the hydrogen energy long before the country’s nuclear and coal phase- in the hydrogen economy can build on the existing storage chain starts with local wind and/or solar out schemes were decided. Since that time, CHP infrastructure. power generation and is converted into hydrogen on- units running on 100% green hydrogen have been site through electrolysis. The hydrogen is then stored deployed around the world with the leading hydrogen This ultimately means CHP can be a powerful in pressure vessels as fuel for a CHP plant, allowings market participants. economic solution, one that makes the energy transition for continuous operation at the facility, significantly affordable. Especially as the energy transition increasing the flexibility of the overall energy system A key focus of hydrogen technology development accelerates, more cost-effective robust solutions will is the possibility of retrofitting existing natural gas or be required to meet our carbon and resiliency goals. Fundamentally, there is little difference between a biogas-operated systems for operation with hydrogen. CHP is a proven and future proof technology that can green hydrogen Combined Heat and Power (CHP) Some standard CHP products can be operated with a be readily deployed at scale to enable increased and conventional natural gas or biogas-powered mixing ratio of up to 40% hydrogen with no changes to intermittent renewables and true net-zero energy CHP. Themain components, such as a generator, heat the hardware required. To achieve 0 –100% flexibility, systems. And green hydrogen will make this pathway exchanger, pumps, etc. are almost identical. Even the CHP systems are field retrofitted with a hydrogen to net-zero a possibility. engine itself is based on existing systems that have fuel train at any time. Simple adjustments to the fuel been installed thousands of times worldwide. supply and the combustion chamber components, PROOF 2 - MARCH 30 About the author Kurt West Kurt West has successfully launched, managed, and scaled several businesses focused on optimizing technologies that positively impact the energy sector. In his current role as Vice President of 2G Energy Kurt is contributing to the conversation around clean, resilient, and just energy systems for North America. He is especially focused on combined heat and power and clean hydrogen as ways to drive change. www.aesp.org | first quarter 2022 13

DEI 2030: ONE INDUSTRY. TWO FUTURES. MANY PROACTIVE STEPS By Quinn Parker 2030 isn’t that far away. But there are times when it can feel overwhelming to MEASURE MORE. PROOF 2 - MARCH 30 think of all the possible scenarios the world will encounter along the path to this important milestone. While I can’t say for sure what life will look like when we reach In my work with my clients and in my role on the AESP Board of Directors, I strive 2030, when it comes to diversity, equity, and inclusion in energy efficiency, I see two to help our industry and our association to think big ideas, to consider what’s truly potential futures. possible, and to take intentional steps to ensure we make thoughtful and measurable progress. But this isn’t always as easy as it sounds. How do we measure progress in In the first, the EE industry comes together to solve the challenges we collectively ways that go beyond traditional cost benefit analyses? How do we overcome the fear face and achieve what now seems like a sort of utopia. This utopia is one with inclusive of the data and what it might tell us? How do we avoid hiding behind excuses like the thoughts and perspectives. It’s one where boardrooms, conference audiences, and lack of access to the ‘right’ data and instead find work arounds and viable solutions? program participation rates reflect the backgrounds, ethnicities, and demographics of the communities where we live and work. It’s one where candid conversations take One idea is to consider using techniques from other sectors, like healthcare, where place with people who both look like and celebrate the diversity we claim to seek. de-identified or surrogate data can be used in the event of limitations related to privacy protections or insufficient data sets. Or we could look to the environmental There’s a second alternate future that isn’t quite so optimistic. This scenario involves NGO community, who often partners with trusted community organizations to collect our industry spending the next few years continuing to talk a lot about diversity, data differently on their behalf to get access to information when they realize they equity, and inclusion, all while continuing to do the things we’ve always done. In it, aren’t the right messengers or ones to ask. our industry consumes a lot of energy and generates a lot of noise talking about what we need to do, or plan to do, but we fail to act in a meaningful way and thus we MESSAGE BETTER. leave segments of our population behind. Should this come to pass, our boardrooms, conference audiences, and programs participation rates will look about the same as Beyond finding more effective messengers to help establish trust, we have a they do today. In short, this future will be business as usual. lot of work to do on the words we use to talk about DEI and EE. First, utilities and their partners need to get a lot clearer on the appropriate value proposition for the Which future will we choose? communities we’re seeking to connect with. Instead of technical goals or trends (decarbonization, beneficial electrification) or the intellectual benefits (saving money, For me, there are a number of steps we can take to thoughtfully and purposefully reducing emissions), we need to make a more emotional plea and focus on the attain the future that is the brightest and the most inclusive. Here are a few. outcomes that matter. Will a baby breathe better? Will a student study more? Will parents worry less? 14 Association of Energy Services Professionals

We also need to find better ways to talk about the communities we’re trying to How can we disrupt or rethink this? engage in and work to flip our script in terms of how we talk about DEI. A lot of words and phrases we use today are derogatory. We need to stop defining groups by how It’s difficult at times to acknowledge that certain parts of our population haven’t they engage with energy and learn to label situations instead of people. This can received the same benefits as others over the course of time. But there is a role for help overcome assumptions, address systemic challenges, and better connect with industry to play in attempting to equal the playing field, to try to pull communities up individuals and communities with high energy burdens. and give them a boost to gain equal footing. To do this, we need to overcome the idea of scarcity and acknowledge that providing what is needed by some doesn’t GET CREATIVE WITH MATH. mean others won’t have enough, even (and especially) while doing the right thing for a group that has been previously wronged. We’re going to have to approach the calculus of DEI and EE differently if we’re to make real and swift progress. If we continue to use existing rigorous structures to Until we get to a place where we accept this and embrace it into our thinking evaluate cost effectiveness, we will continue to miss opportunities for societal change. and planning, it will be hard to move forward in a meaningful way. Transformations While every regulatory environment is different, EE usually yields a significant return require patience and for decision makers to embrace intentional changes to shift on investment for utilities of any size. We need to ask ourselves how we can create power. We will not be able to make this transformation if a large percentage of the a win-win scenario where utilities earn a return, communities are equitably served. population doesn’t come with us. For one to succeed we must all succeed. We also need to be more customer centric even when the regulatory structure INFLUENCE WHAT YOU CAN, doesn’t easily allow this way of thinking. Products and services must both meet needs AS MUCH AS YOU CAN. and be cost effective. There are ways to act that extend beyond the DSM portfolio and lowest cost acquisition. To think beyond dollars, resource limits, time constraints, and Each of us should assess what we can address in our span of control. It could be energy burdens and look at new and different measures of success–like workforce that you’re an executive, or are a business line or program owner who can affect large development or new businesses growth. This is the way to build the foundation for scale program changes. Maybe you manage a trade ally network or a small team lasting change in our communities. And within this new approach to math we may just of evaluators and can make incremental but meaningful changes to implementation find the tipping point, where utilities proactively decide to invest in a more equitable or program experience. Even if you’re a sole contributor within this industry you can future for all ratepayers, customers, stakeholders, communities. seek education on how to develop more cultural competency so you can be a better partner and identify ways to push forward change. RETHINK THE ROLE OF THE UTILITY. Then, as you start to have more and more influence, you can collect more Refining the ways utilities measure, message, and mathematically invest in information to fully understand demographics around you, dive in to make sure there communities opens up other questions of the role of the utility, now and in the is equitable treatment, have conversations that increase your level of understanding future. Technological shifts are already affecting the spend/consume model as and empathy, and push for shifts to reflect/represent the community. In short, do more. generation and storage gets closer to our homes and businesses. Utilities are paying their customers to use less energy which is often hard to understand intellectually There are times when it can be exhausting to serve as the voice who always says or emotionally. Subscription models are causing a rethinking of what’s beyond the “this is not good enough.” But I’m reminded of a quote by Toni Morrison that taught me meter. There is growing pressure to engage with communities throughout the business of my responsibility to challenge, encourage, and help others– “Your job isn’t done lifecycle — from planning to evaluation– and to do so in an open, transparent and now that you’ve got that job—it’s to pull other folks up with you.” Of course 2030 inclusive way. isn’t a threshold or a finish line, but a moment in time. Change will be an ongoing and constant process. But I’m hopeful that intentionally pursuing some of these steps will Telecom customers once faced monthly limits on cell phone minutes or text get us to a version of 2030 we can be proud of instead of one with more of the same. messages. Movie night on the couch required going to a rental shop. How will utilities be similarly disrupted? What would it look like for utilities to take a leadership role in defining their future role while also addressing the unique needs of populations who have not historically participated or been well served? Could we reach a future state where instead of being necessary, utilities are valued and are invited to the table as a member of the community they serve? TAKE RESPONSIBILITY TO OVERCOME About the author SCARCITY THINKING. Quinn Parker The time has come for leaders in our industry to take responsibility for the problems we face and to answer ethical questions about the ways we’re building our programs Quinn has over 15 years of professional experience working with and offerings. And yet, this charge to ensure everyone can take advantage of what’s utilities, non-profits, and public organizations. With a depth of on offer often is on the shoulders of those that are the most impacted by energy experience in researching, designing, planning, and implementing inequities. products and solutions, she supports clients in strategically addressing their most pressing challenges through an equity lens. PROOF 2 - MARCH 30 Quinn helps companies develop and implement diversity, equity, and inclusion (DEI) initiatives with impact. Quinn is a Certified Diversity Professional (CDP), a qualified administrator of the Intercultural Development Inventory (IDI) and a Lean Six Sigma Green Belt. She holds an M.B.A from California State University, Dominguez Hills and a B.A. from Loyola Marymount University. She is a member of the Board of Directors of the Association of Energy Services Professionals (AESP) and a member of the DEI Council. www.aesp.org | first quarter 2022 15

Digital Transformation is driving the future of HVAC By Kristy O'Hagan The last hundred years has seen incremental innovation around mechanical computers have access to sufficient PROOF 2 - MARCH 30 systems but little in the way of foundational change. The most notable being the shift amounts of quality data, ML can from pneumatic systems to computer-based control systems. Increasingly, the broader be used to reduce operating costs, digital transformation is catching up with our industry and changing the way in which maintain tenant comfort and increase we design, size, operate and maintain these systems. The drivers behind this trend are building efficiency. Standards and increasing demand for energy efficiency (cost savings & decarbonization), Wellness guidelines, like ASHRAE and IECC, (e.g. Indoor Air Quality (IAQ)) and generally higher expectations around occupant are great foundational tools with comfort, which in a commercial environment, translates to better employee satisfaction which to ensure continuity across the and tenant retention. building stock and a good starting point for design, but applying ML even Innovation in the HVAC sector has been focused almost solely on mechanical to best-in-class designs and operating improvements. Virtually the same equipment and equations have been used to systems can yield powerful results. implement HVAC environments. 50-odd years ago we were introduced to a central Connecting the data points across Building Management System (BMS). BMS were designed to turn on/off heating and these historically disparate systems cooling airflow – they were never designed to consider the efficiency of the system or allows ML to predict and respond to comfort of the occupants. The vast majority of building stock in North America is well trends and variability which results in over 50 years old and installed with this highly inefficient infrastructure – often times the optimization of the processes in the heating and cooling are fighting each other. If a building needed or wanted to question. upgrade to be more comfortable or efficient, in most instances, the entire heating and cooling system needed to be replaced. The global pandemic of 2020 forced most office occupants out of With the advent of Machine Learning applications, we can now affect substantial their buildings. Even pre-pandemic it change to these systems without major infrastructure improvements - when it makes was estimated that commercial office sense to do so. Today’s central BMS can control Lighting; HVAC; Fire, smoke detection buildings were roughly only 50% and alarms; Motion detectors, CCTV, security and access control; ICT systems; occupied on any given day. The Elevators; Industrial processes or equipment; Shading devices; Smart meters; and the pandemic dropped this number even list goes on. If these BMS are so smart, why haven’t they figured out how to reduce further to 10%-15% occupancy. So energy consumption and provide proper thermal comfort for office occupants? why didn’t the utility bills drastically decrease? The current mechanical systems and BMS are typically either 100% on, Fundamental changes, brought to fruition by Machine Learning, are happening or 100% off - there is little modulation. Typical BMS in commercial buildings cannot in main two ways: energy efficiency & occupant comfort and health and wellness. determine the occupancy - this information is relayed by the facility managers. This Machine Learning (ML) at its core is the application of algorithms - mathematical inefficiency is one of the main drivers for why buildings energy consumption did not instructions that allow computers to learn on their own wherein they can uncover drop further than 10-15%. trends and data associations that humans would miss using traditional analysis. When 16 Association of Energy Services Professionals

Buildings are no longer reliant just on the installed BMS and it’s predefined rules. Today, buildings are being equipped with the ability to reduce HVAC energy consumption and operational costs while increasing occupant comfort and monitoring Indoor Air Quality (IAQ) based on real-time occupancy. Today’s office occupants are given the ability to directly control the temperature from their smartphone or tablet thanks to advancement and adoption of Machine Learning, IoT, smart sensors and motors. CASE STUDY Pilot Project Scope Owner: Los Angeles Department of Water and Power’s (LADWP) Project size: 10,000sf of 28,000sf The Los Angeles Cleantech Incubator (LACI) campus is a 60,000sf space where Building Type: Office/Coworking/Education science, entrepreneurship, environmentalism, & policymaking merge to advance the Installation Date: June 2021 development of a sustainable future. It received LEED v3 Platinum certification and Total Energy Savings: 10,436 kWh WELL Gold in 2016. Even with the high performance of the overall space, the LACI % Energy Saved: 35%** building noticed that in the spring of 2020, their energy bill had increased despite Expected Yearly CO2 Reduction: 48 metric tons COVID-19 keeping many occupants home. Komfort IQ (KIQ) was brought in to help. ROI: 3 years KIQ is an HVAC energy reduction company using sensors, machine learning and **installed in only 30% of space smart motors to control existing balancing dampers on a room-by-room basis. Project Highlights: Komfort IQ was engaged to lower the HVAC energy use and improve the comfort, health and well-being of their occupants. Phase 1 of this Pilot project included analyzing energy data on the existing Aaon RN-070 RTU (70 ton). KIQ then commissioned and installed the MicroZone smart sensors and motors in all individual offices and conference rooms. Within the first week of installation KIQ captured data indicating that the system was able to save 26% on a similar temperature degree day. Overall, the KIQ system was able to capture data to show the LACI building was able to save 10,436 kWh which represents about 35% energy savings while only being installed in 30% of the building. The Payback period is estimated to be 3 years using local LA energy and labor rates. As of March 2022, the KIQ MicroZone system is currently only installed in 10k sf out of the 28k sf on the East side of the building. The data is based on 57 Sensors and 39 Hubs. We then compared historical days with days of the same or similar temperatures after installation to determine energy reductions. Phase 2 of Pilot is currently being installed. PROOF 2 - MARCH 30 About the author Kristy O'Hagan Kristy O'Hagan is a dedicated professional with over 17 years of experience in building design, construction, and management with a concentration in sustainability. She has worked on over 5 million sf in the US, Europe and Caribbean; completing high-profile projects on time and on budget with deep understanding of energy and the environment; project management and accounting fundamentals. Excellent technical and communication skills, and deeply dedicated to sustainability and the environment. She has been an active member with the CT Green Building Council and helped establish the Southwestern CT Green Building Council. She holds LEED B&D, LEED EBOM, Green Globes and GPRO accreditations. www.aesp.org | first quarter 2022 17

VISION 2030 The Sustainable Utility By Ted Schultz, CEO of E Source Utilities matter. They always have – just ask someone without power or safe 1. Environmental Responsibility: The mass adoption of renewables at scale PROOF 2 - MARCH 30 drinking water – but they matter more than ever now that they play a starring role in – wind, solar, battery storage, and an emerging set of new energy sources – is the very survival of our planet. happening now. But that’s only one path to decarbonization. Collaborating with business and residential customers using distributed energy resources, such Nearly every road to carbon reduction and net-zero carbon emissions leads to as solar and demand response, is another. But in order for DERs to be counted and through utilities. among the grid’s most dependable assets, they will need to be managed with precision, one that will require a newfound dexterity rooted in data. True, too, This is both good and bad news. The good news is that if utilities “get it right” for the impending wave of electrification. Increasing demand for EVs and EV and meet the aggressive 2030, 2040 and 2050 sustainability goals they have charging infrastructure could drive utility growth for decades but in order for committed to, worldwide emissions could fall precipitously. The bad news is that the utilities to get in front of the opportunity, they’ll need to get in front of, and master, kind of transformation this requires is not in the utility industry’s wheelhouse – I know, the data. I have worked in it for more than 35 years. Regulated innovation results in a culture of incremental change at best. 2. Safety, Reliability, and Resilience: Utilities are currently fighting the consequences of climate change — more severe fires, droughts, floods, and But incremental change isn’t going to cut it. temperature extremes — but often from a position of weakness. The transition from aging infrastructure and a reactive posture to a smarter, more resilient grid will be We need to take a radically different approach that considers the ‘real-world’ math expensive. Funding from the Infrastructure Investment and Jobs Act will help, but of sustainability, while also expanding its definition. This new approach is here and it’s not sufficient. available today. It is rooted in data and data science and addresses the challenges of seemingly competing priorities — a commitment to environmental responsibility; safety 3. Equity: Energy equity has always been an issue, but COVID-19 and its ongoing & reliability; rethinking how to serve all customers more equitably; and maintaining a variants have disproportionately impacted low and moderate income (LMI) bottom line that enables innovation and community support. residential customers and small and medium sized businesses (SMBs). These most vulnerable constituents need, and are increasingly demanding, more from their Welcome to the era of the Sustainable Utility™. utilities to handle energy expenses and gain access to sustainability programs that really move the needle. Vision 2030: The Sustainable Utility 4. Financial Stability: With hundreds of billions in needed capital investment In addition to playing a leading role in the clean energy transition, utilities must on one side and the limited ability of utilities to raise rates significantly on also undergo their own massive transformations. Here are four pillars that can serve the other, math is a major challenge to becoming a Sustainable Utility. The as guideposts for doing the hard work it will take to become a Sustainable Utility by only way to make the numbers add up requires a massive decrease in O&M 2030: expense and optimized capital expenditures. We can’t simply spend our way into sustainability, but we can strategically deploy data to increase customer engagement, optimize infrastructure spending, and achieve necessary cost reductions to get there. 18 Association of Energy Services Professionals

A New Era of Demand-side In Practice: Becoming a Sustainable Utility Management Solutions Becoming a Sustainable Utility by 2030 will require hard work, planning, and the How can we meet ambitious carbon-reduction goals and demands for increased strategic use of data. Evergy, an investor-owned utility in the mid-west, has taken the resiliency – and do so equitably – without significant rate hikes? Part of the solution first steps with its Sustainability Transformation Plan (STP). requires rethinking, refining, and more effectively monetizing customer engagement through demand-side management (DSM) programs. Evergy’s STP is designed to enhance the company’s focus on grid modernization, renewable energy investment and cost management. It accelerates the company’s Take the example of traditional behavioral demand response programs. For transition to cleaner energy by reducing carbon dioxide emissions 80% by 2050. It utilities that “complied with regulatory requirements,” the results have often been includes nearly $5 billion in upgrades to transmission and distribution infrastructure, disappointing. Customers may like the idea of turning the tables and getting paid by and customer-facing platforms to improve reliability, lower operating costs, provide their utility to reduce load when called upon, but will they reliably do so? Turning DR further access to renewable energy and enhance the customer experience. It into a reliable grid asset that can be surgically deployed to locational areas of need includes $500 million of investments in asset hardening, distribution automation and on the grid and in a manner that operations can count on requires more than hope. technology, and it anticipates 5-6% rate base growth and 6-8% EPS through 2024 — while increasing benefits for its customers and communities. And are utilities currently marketing to the best customers for each program, or assigning customers to broad segments and assuming all programs are an equal At the same time, Evergy also expects to reduce O&M costs by 25%. To do so, match for their generic persona? Each DSM program requires a detailed, data- they are embracing data science. The company knows the only way to achieve its intensive understanding of who your customers are as individuals, how they use ambitious sustainability goals is to let the data do the talking, a trend that is beginning energy, and data-driven forecasts to understand if they are a good fit to achieve the to take hold across the industry. program’s goals. It’s a great example of how utilities can thread the needle of making substantial Today we have a myriad of best practices to inform every aspect of DSM programs progress towards net-zero emissions goals, increasing and optimizing capital from design, implementation, evaluation, and benchmarking to gap analyses and spending while also reducing costs and improving profitability. other data-driven optimization opportunities. Moreover, we have data at a scale never before imaginable – from primary and ethnographic research, to AMI, CIS, The strategic use of data will be critical as utilities work to accelerate their own and other utility-system data, to third-party information sources – powering AI and transformation to becoming a Sustainable Utility – and we have the data. The time is machine-learning solutions to increase equitable customer engagement and demand- NOW for utilities to put it to work to accelerate their leadership in saving the planet. side resource availability and dependability. Armed with this individualized data, we can transform existing DSM programs into value centers that are an essential piece of maximizing the resource value on the grid and value a utility delivers to each customer over time. This provides the framework to strategically and cost-effectively identify and deploy emerging DSM concepts. Fueled by Cost Optimization and Reduction Hardening the distribution grid requires a more granular approach to deployment of DSM resources to optimize value, but it also requires cost optimization and reduction, and data plays a key role here as well. Today, most utilities take a time- based cadence approach to managing the grid, a tried and true approach that has worked “well enough” for years. But well enough isn’t good enough in the face of extreme weather and wildfires and the ticking clock of climate change. The costs and consequences are too high. To achieve the goal of becoming a Sustainable Utility, utilities must adopt data- driven, proactive approaches to grid management. We need to trim trees based on the rank-order danger they pose to a line, not because it’s “their turn.” And we need to extrapolate that risk-based approach to develop a new blueprint for capital investment based on risk-spend efficiency. This is an infinitely more data-driven, granular approach that results in significant O&M savings that can be redeployed to advance capital intensive investments needed to improve the resiliency of the grid. PROOF 2 - MARCH 30 About the author Ted Schultz Ted Schultz is the Chief Executive Officer of E Source. He has more than 35 years of industry experience and is known for his focus on providing value to customers. Prior to joining E Source, he served as CEO of TROVE Predictive Data Science, senior vice president of utility solutions at Ecova, and vice president of marketing and energy efficiency at Duke Energy. Ted has held several advisory board positions at the national level, including with the Edison Foundation, National Action Plan for Energy Efficiency, EPRI Energy Services, and JD Power Smart Grid Services. He currently serves on the Marketing Executives Conference. www.aesp.org | first quarter 2022 19