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Successful Practices in Combined Gas and Electric Utility Energy Efficiency Programs

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Successful Practices in Combined Gas and Electric Utility Energy Efficiency Programs Successful Practices in Combined Gas and Electric Utility Energy Efficiency Programs Seth Nowak, Marty Kushler, and Patti Witte August 2014 Report U1406 © American Council for an Energy-Efficient Economy 529 14th Street NW, Suite 600, Washington, DC 20045 Phone: (202) 507-4000 • Twitter: @ACEEEDC Facebook.com/myACEEE • www.aceee.org GAS AND ELECTRIC PROGRAMS © ACEEE Contents About the Authors .............................................................................................................................. iv Acknowledgments .............................................................................................................................. iv Executive Summary ............................................................................................................................ v Introduction .......................................................................................................................................... 1 Rationale for Natural Gas and Electric Energy Efficiency Program Level Cooperation ........... 2 Increased Savings Impact ......................................................................................................... 2 Reduced Program Costs ........................................................................................................... 3 Enhanced Customer Satisfaction ............................................................................................. 3 Other Benefits of Gas-Electric Collaboration ......................................................................... 3 Methodology ........................................................................................................................................ 4 Challenges Encountered in Combined Programs and Barriers to Success ................................. 6 Utility Concerns Relating to Collaboration ............................................................................ 6 Concerns About Cross-Fuel Competition ................................................................... 6 Administrative Effort Required for Coordination ..................................................... 7 Customer Relations and Marketing ............................................................................. 8 Regulatory Issues ....................................................................................................................... 8 Coordinating Electric and Gas Programs ................................................................... 9 Promotional Practices and Cross-Fuel Competition Issues.................................... 10 Program Administration ........................................................................................................ 10 Program Design and Implementation ....................................................................... 10 Tracking of Costs and Attribution of Benefits .......................................................... 11 Cost-Effectiveness Screening ...................................................................................... 12 Funding .......................................................................................................................... 12 Integration with Other Resources: Water and Deliverable Fuel Efficiency..................... 12 i GAS AND ELECTRIC PROGRAMS © ACEEE Water .............................................................................................................................. 12 Deliverable Heating Fuels ........................................................................................... 13 Keys to Success for Combined Programs ....................................................................................... 13 Supportive Legislation and Regulation ................................................................................ 14 Effective Institutional Relationships ..................................................................................... 18 Additional Specialty Areas of Electric and Gas Utility Coordination ....................................... 23 Fuel Switching .......................................................................................................................... 23 Combined Heat and Power .................................................................................................... 26 Lessons Learned and Recommendations for Success .................................................................. 28 Lessons Learned from Profiled Programs ............................................................................ 28 Regulatory Actions to Advance Combined Programs ....................................................... 32 Conclusion .......................................................................................................................................... 34 References ........................................................................................................................................... 36 Appendix A: Profiles of Combined Gas and Electric Programs ................................................. 40 Large Commercial Retrofit, National Grid Rhode Island .................................................. 40 Multifamily Water and Space Heating Market Transformation Program, CenterPoint Energy Electric Texas .............................................................................................................. 46 Conservation Improvement Program, CenterPoint Energy Oklahoma .......................... 50 Massachusetts Combined Heat and Power Program Initiative, NSTAR, National Grid, Cape Light Compact, Western Massachusetts Electric Company, Unitil ........................ 55 Commercial and Industrial Programs, Mass Save NSTAR ............................................... 58 Connecticut Home Energy SolutionsTM, Connecticut Light & Power, United Illuminating Co., Connecticut Natural Gas, Southern CT Gas, and Yankee Gas ........... 66 Production Efficiency (PE), Energy Trust of Oregon .......................................................... 74 Large Energy Users Program (LEUP), Wisconsin Focus on Energy ................................ 80 Multifamily Performance Program, NYSERDA .................................................................. 86 ii GAS AND ELECTRIC PROGRAMS © ACEEE Retro-Commissioning, ComEd in Partnership with Nicor Gas, Peoples Gas, and North Shore Gas .................................................................................................................................. 93 Small Business Direct Install Program, LADWP/ Southern California Gas ................. 101 Home Energy Squad, CenterPoint Energy/Xcel Energy ................................................. 108 California Advanced Homes Program, Southern California Gas, LADWP .................. 115 Efficiency Vermont and Vermont Gas Residential New Construction Program ......... 121 EfficiencyCrafted New Homes Program, AEP Ohio/Columbia Gas of Ohio .............. 128 Home Energy Savings Program, ComEd and Nicor Gas................................................. 137 iii GAS AND ELECTRIC PROGRAMS © ACEEE About the Authors Seth Nowak conducts analysis and writes reports on energy efficiency programs and policies in the electric and natural gas utility sector. Focus areas of his research include exemplary programs/best practices and program evaluation, measurement, and verification. He joined ACEEE in 2010. Martin Kushler is a senior fellow at ACEEE, where he previously served as director of the utilities program for ten years. He has conducted numerous widely acclaimed national studies of utility-sector energy efficiency policies and programs, and provided technical assistance to help advance energy efficiency policies in many states. He has been directing research and evaluation regarding energy efficiency and utilities for three decades, has been widely published, and has provided consultation to numerous states and the federal government. Prior to joining ACEEE in 1998, he directed the evaluation section at the Michigan Public Service Commission for ten years. Patti Witte serves as a research consultant to ACEEE. She has over two decades of experience researching utility energy efficiency programs. Acknowledgments This report was made possible through the generous support of the American Gas Association, Northwest Energy Efficiency Alliance, Energize Connecticut, Southern California Gas, and the Los Angeles Department of Water and Power. The authors gratefully acknowledge external reviewers, internal reviewers, colleagues, and sponsors who supported this report. External reviewers included Scudder Parker from Vermont Energy Investment Corporation, Sheri Borrelli from United Illuminating, Gretchen Hardison from Los Angeles Department of Water and Power, Doug Baston from North Atlantic Energy Advisors, Rick Murphy and Mariam Arnaout from American Gas Association, and Chris Neme from Energy Futures Group. Internal reviewers included Steve Nadel, Neal Elliot, and Dan York. External review and support does not imply affiliation or endorsement. The authors also gratefully acknowledge the individuals who helped us by agreeing to be interviewed as program experts: Ian Hoffman, Lawrence Berkeley National Laboratory; Doug Baston, North Atlantic Energy Advisors; Chris Neme, Energy Futures Group; and Scudder Parker, Vermont Energy Investment Corporation. We would like to thank the many program managers and staff members of utilities and program administrators around the nation who cooperated with
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