DTE ENERGY Electric Energy Efficiency Potential Study Prepared for: DTE Energy Final Report April 20, 2016 www.gdsassociates.com DTE ENERGY| Electric Energy Efficiency Potential Study April 20, 2016 TABLE OF CONTENTS 1 EXECUTIVE SUMMARY ...................................................................................................1 Background ...................................................................................................................................................... 1 Study Scope ...................................................................................................................................................... 2 Summary of Results.......................................................................................................................................... 4 Energy Efficiency Potential Savings Detail By Sector ................................................................................ 7 Cost-Effectiveness Findings ........................................................................................................................... 8 Report Organization ........................................................................................................................................ 8 2 GLOSSARY OF TERMS ................................................................................................. 10 3 INTRODUCTION ......................................................................................................... 15 3.1 Introduction to Energy Efficiency ......................................................................................................... 15 3.1.1 General Benefits of Energy Efficiency ................................................................................ 15 3.2 The DTE Energy Context ......................................................................................................................... 16 3.2.1 Flat MWh Sales for the 2016 to 2035 Time Period ............................................................ 16 3.2.2 Energy Efficiency Activity .................................................................................................. 17 3.2.3 Recent Energy Efficiency Potential Studies ........................................................................ 17 3.3 Cost-Effectiveness Findings .................................................................................................................... 18 4 CHARACTERIZATION OF ELECTRICITY CONSUMPTION IN DTE ENERGY’S SERVICE TERRITORY 19 4.1 Michigan Electric Utilities ........................................................................................................................ 19 4.2 Economic/Demographic Characteristic ............................................................................................ 20 4.3 Residential, Commercial and Industrial Sector Baseline Segmentation Findings ....................... 20 4.3.1 Electricity Sales Forecast by Sector for the DTE Energy Service Area .................................. 20 4.3.2 Electricity Consumption by Market Segment ..................................................................... 22 4.3.3 Electric Consumption by End-Use...................................................................................... 25 5 POTENTIAL STUDY METHODOLOGY .............................................................................. 29 5.1. Overview of Approach ..................................................................................................................... 29 5.2 Forecast Disaggregation For the Commercial and Industrial sectors .......................................... 29 5.3 Measure List Analysis ............................................................................................................................... 30 5.3.1 Measure List Development ............................................................................................... 30 5.3.2 Measure Characterization ................................................................................................ 31 5.3.3 Treatment of Codes and Standards................................................................................... 33 5.3.4 Review of LED Lighting Assumptions................................................................................. 34 5.4 Potential Savings Overview ................................................................................................................... 34 5.5. Technical Potential ............................................................................................................................ 35 5.5.1 Core Equation for the Residential Sector ........................................................................... 36 5.5.2 Core Equation for the Commercial Sector ......................................................................... 36 5.5.3 Core Equation for the Industrial Sector ............................................................................. 37 5.6 Economic Potential ................................................................................................................................. 37 5.6.1 Utility Cost Test ................................................................................................................ 38 PREPARED BY GDS ASSOCIATES, INC. i | Page DTE ENERGY| Electric Energy Efficiency Potential Study April 20, 2016 5.6.2 Financial Incentives for Program Participants ................................................................... 39 5.7 Achievable Potential .............................................................................................................................. 39 5.7.1 Market penetration methodology .................................................................................... 40 6 RESIDENTIAL ELECTRIC ENERGY EFFICIENCY POTENTIAL ESTIMATES ................................... 44 6.1 Residential Electric Potential ................................................................................................................. 44 6.1.1 Energy Efficiency Measures Examined .............................................................................. 44 6.1.2 Overview of Residential Electric Energy Efficiency Potential .............................................. 45 6.2 Summary of Findings ............................................................................................................................... 46 6.2.1 Achievable Electric Potential Savings in the Residential Sector .......................................... 48 6.2.2 Annual Achievable Electric Savings Potential .................................................................... 51 6.2.3 Residential Electric Savings Summary by Measure Group ................................................. 56 6.3 Achievable Potential Benefits & Costs ................................................................................................ 57 7 COMMERCIAL ELECTRIC ENERGY EFFICIENCY POTENTIAL ESTIMATES ................................ 60 7.1 Commercial Electric Energy Efficiency Potential .............................................................................. 60 7.1.1 Electric Energy Efficiency Measures Examined .................................................................. 60 7.1.2 Overview of Commercial Electric Energy Efficiency Potential............................................. 61 7.2 Summary of Findings ............................................................................................................................... 62 7.2.1 Achievable Potential Savings in the Commercial Sector .................................................... 64 7.2.2 Annual Achievable Electric Savings Potential .................................................................... 67 7.2.3 Commercial Electric Savings Summary by Measure Group ................................................ 72 7.3 Achievable Potential Benefits & Costs ................................................................................................ 87 8 INDUSTRIAL SECTOR ELECTRIC ENERGY EFFICIENCY POTENTIAL ESTIMATES ......................... 90 8.1 Industrial Electric Energy Efficiency Potential..................................................................................... 90 8.1.1 Electric Energy Efficiency Measures Examined .................................................................. 90 8.1.2 Overview of Industrial Electric Energy Efficiency Potential ................................................ 95 8.2 Summary of Findings ............................................................................................................................... 95 8.2.1 Achievable Potential Savings in the Industrial Sector ........................................................ 98 8.2.2 Annual Achievable Electric Savings Potential .................................................................. 102 8.2.3 Industrial Electric Savings Summary by Measure Group .................................................. 108 8.3 Achievable Potential Benefits & Costs .............................................................................................. 118 APPENDIX A| RESIDENTIAL MEASURE DETAIL ..................................................................... A APPENDIX B| COMMERCIAL MEASURE DETAIL .................................................................. B APPENDIX C| INDUSTRIAL MEASURE DETAIL ...................................................................... C APPENDIX D| GLOBAL ASSUMPTIONS .............................................................................