State Energy Efficient Appliance Rebate Program Program Plan Narrative MARYLAND

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1 State Energy Efficient Appliance Rebate Program Program Plan Narrative MARYLAND Executive Summary Program Summary. Briefly describe your overall program approach, including goals, objectives, and estimated benefits for your State or Territory. Background The state passed the EmPOWER Maryland legislation in 2008, with the goal of reducing electricity use 15% per capita by As part of this legislation, Maryland s five investorowned utilities (IOUs) have been authorized to provide rebates for certain ENERGY qualifying appliances. The investor owned utilities are Allegheny Power (AP), Baltimore Gas and Electric (BGE), Delmarva Power and Light (DPL), Pepco, and Southern Maryland Electric Cooperative (SMECO). The utility programs are either in place or will be rolled out in the next few months. Marketing efforts are underway to educate Maryland consumers regarding these programs. Program Description Using funds from the ARRA State Energy Efficient Appliance Rebate Program, the Maryland Energy Administration (MEA) will leverage efforts already in place by Maryland s IOUs to provide rebates for high-efficiency appliances. In an effort to support the EmPOWER Maryland goals, promote statewide consistency, and avoid the consumer confusion that would be caused by multiple appliance rebate programs, MEA will be working primarily with the IOUs to implement the ARRA SEEARP. This will be done in the form of a grant implementation Page 1

2 agreement, where MEA will use a procurement exemption to pass funding through to the utilities, giving them the ability to include additional rebate tiers to their existing programs. The ARRA dollars will enhance efforts already in place and will build upon program dollars already being expended, thus allowing the utilities to keep administrative their costs at 20% of the total program cost. Funding will be allocated to each of the utilities based on percentage of residential energy sales. Rather than holding the utilities responsible for administrative costs, MEA has agreed to provide the 50% matching funds from Maryland s Strategic Energy Investment Fund (SEIF). MEA is doing this so that utility ratepayers will not be affected, and to avoid the possibility of lengthy rate case hearings before the Public Service Commission. MEA will be providing a rebate option for the smaller co-ops and municipal utilities that do not currently have energy efficiency programs in place for their customers. Proposed Appliances Maryland s IOUs have gone through a year-long planning process to develop energy efficiency programs as part of the EmPOWER Maryland legislation. Each of the utility appliance rebate programs varies slightly. MEA analyzed the utility programs extensively to develop a SEEARP strategy that would promote statewide consistency while reaching a maximum number of customers. Most Maryland utilities are offering appliance rebates covering HVAC equipment, efficient lighting, refrigerators, and clothes washers. MEA worked closely with the utilities to select high-efficiency clothes washers and refrigerators, for which all but one utility could benefit from additional rebate tiers. SEEARP will provide the following rebates, to be layered on top of any existing IOU rebates: -$50 additional rebate for CEE Tier 2 and above clothes washers Page 2

3 -$25 additional rebate for CEE Tier 2 and above refrigerators -$300 rebate for ENERGY electric heat pump water heaters Though total incentive levels may vary by utility, each consumer will be eligible for the same amount of SEEARP funding, per DOE recommendation. This ensures that all ratepayers will receive the same direct benefits from SEEARP, regardless of utility service area. See Chart 1: EmPOWER Maryland and SEEARP Appliance Rebate Programs at the end of this section for more detail on total rebate levels available. This program will move the market toward appliances with higher efficiencies by providing an additional $25 rebate for refrigerators and $50 rebate for clothes washers meeting Consortium for Energy Efficiency standards of Tier 2 and above. It will also provide a $300 rebate on ENERGY electric heat pump water heaters. Refrigerators: All IOUs offer a $50 rebate for ENERGY refrigerators, funded by ratepayer surcharge programs. The SEEARP funding will be used to offer an additional $25 rebate for refrigerators meeting CEE Tier 2 and above standards, making for a $75 total rebate for these appliances. This is consistent across every utility in Maryland. Clothes Washers: The clothes washer rebate program offered by the utilities is currently not consistent across the state. MEA believes that the SEEARP funding presents an opportunity to add a rebate for Tier 2 and above clothes washers in Pepco and Delmarva territory while achieving additional energy savings from more efficient models in the remaining service territories. Two of the IOUs, BGE and SMECO, are offering $50 rebates for ENERGY Page 3

4 clothes washers. In these territories, SEEARP funding will be used to offer an additional $50 rebate for clothes washers meeting CEE Tier 2 and above standards. Again, this will make for a $100 total rebate for Tier 2 and above models. Two Maryland IOUs, Pepco and Delmarva Power, do not currently offer a rebate for ENERGY clothes washers. Pepco and Delmarva Power will use the SEEARP funding to offer $50 rebates for Tier 2 and above clothes washers. Though these customers will not have access to a rebate for ENERGY clothes washers, they will be able to access the same rebate available for Tier 2 and above models across the state. One utility, Allegheny Power, already plans to offer a $75 rebate for Tier 2 and above clothes washers. SEEARP funding will be used for Allegheny Power to offer an additional $50 rebate for Tier 2 and above clothes washers. This is consistent in the funding allocation from SEEARP for each utility, although it will bring the Tier 2 and above rebate to $125 in the Allegheny service territory. Electric Heat Pump Water Heaters: ARRA funding will allow Maryland to offer a new product in addition to the current utility program list of appliances: a $300 rebate for ENERGY electric heat pump water heaters. This product is not currently offered by any of the utilities, but will offer significant energy savings while venturing into a new market area. MEA and the utilities will work with the plumbing and HVAC businesses and contractors to market this product. SEEARP funding will be allocated to the utilities proportionally, based on 2007 electricity sales data. MEA has worked with the IOUs to determine how the rebate funding will be proportionally distributed among the various products. Each utility has developed an estimate of Page 4

5 the number of rebates they will distribute using SEEARP funding; this is reflected on the MD_Planning.xls spreadsheet. If we find moving forward that the split of purchases is different than what is anticipated, MEA plans to work with the utilities to reallocate funds between products, or if necessary, to move funds between utilities. DOE has indicated that there will be flexibility to redistribute funds among the various rebate product categories as the program progresses. The investor-owned utilities cover about 97% of the state s population, while the remaining 3% of the population is served by various municipal and cooperative utilities. These smaller utilities are not currently operating any kind of appliance rebate program. MEA will use allocated SEEARP administration funds and Maryland Strategic Energy Investment Fund dollars to hire a rebate implementation contractor to run the appliance rebate program for these customers. MEA has already released an RFP for a contractor who will have the capacity to run a rebate program and process rebates for this population. This program would offer a the same $50 rebate for Tier 2 and above clothes washers, $25 for Tier 2 and above refrigerators, and $300 rebate for electric heat pump water heaters. The total rebate available to non-iou customers will be smaller than in some IOU territories, since the non-iou utilities do not offer base ENERGY rebates. MEA will work with the municipal and cooperative utilities to develop basic marketing materials, and rebates will be handled directly through MEA s contractor. Through the use of the SEEARP funding, MEA is striving for increased statewide availability and consistency in rebates. Currently, the IOUs have similar strategies, but customers who are serviced by municipal or cooperative utilities have no access to appliance rebates. The SEEARP Page 5

6 funding will make it possible for these customers to access rebates for more efficient equipment. Also, no rebate is available anywhere in the state for electric heat pump water heaters, and SEEARP funding will make this available to any Maryland consumer. Replacement and Recycling Three of the five Maryland utilities have, or will have, refrigerator recycling programs in place, and the SEEARP will take advantage of those programs. As a condition of its existing refrigerator rebate program, Allegheny Power requires that consumers recycle their old refrigerators in order to receive a rebate. This would also apply to SEEARP-funded rebates. BGE offers a separate refrigerator recycling program, where consumers are paid $50 for their old refrigerator to be hauled away and recycled. SMECO will be starting a program similar to BGE s in the near future. Pepco and Delmarva Power will be encouraged to start similar programs. MEA will work with the IOUs to market the SEEARP as a replacement program. Allegheny Power s refrigerator recycling program requires customers to recycle their old refrigerator in order to be eligible for the rebate, but the other programs do not currently have this policy in place. To ensure that the SEEARP funding is being used only toward replacing appliances, utilities will have their customers self-certify that they are replacing their appliances. Utilities will modify their program application forms to add a separate section for rebates funded with the ARRA SEEARP funding. In order to qualify for that funding, consumers will need to check a Page 6

7 box to certify that they are replacing the appliance in question. This will also be spelled out clearly in all marketing materials and in the program eligibility guidelines. The program will utilize the refrigerator recycling programs run by the utilities. Consumers will also benefit from appliance recycling programs in place at big-box stores like Best Buy and Lowes. These stores handle appliance disposal when customers purchase new refrigerators or clothes washers. Costs One hundred percent of the funding for rebates to consumers will come from the ARRA SEEARP grant. Administration costs are budgeted at $1,314,641, 24.3% of the total program allocation Twenty percent of the administrative costs will be distributed to the utilities to run the rebate programs, 4% will be allocated for MEA s EM&V costs, and 0.3% will cover MEA s work to administer a program for non-iou consumers and basic oversight and reporting to DOE. Of this, half will be funded by DOE and half will be funded by MEA, who will then pass 20% of this funding through to the utilities. MEA will fund the administrative costs so that the utilities will not need to pass these costs along to their ratepayers. Utilities will use their existing program infrastructure to create an integrated appliance rebate program which is seamless for the consumer. Administrative Cost Justification Though the utilities are, indeed, adding SEEARP funds to their existing programs, the administrative costs of 20% are justified. Utilities have indicated that their administration costs Page 7

8 for their EmPOWER Maryland appliance rebate programs range from about 35-45% of total program costs. The utilities are using their existing rebate infrastructure to hold down the administrative expenses of adding the SEEARP to their operations. The 20% administration allocation will be used for rebate processing, reporting and tracking, marketing, retailer outreach, and education. Utilities must either change their existing marketing materials or develop new materials. They must also change their reporting systems to ensure that the SEEARP funding is tracked separately from the EmPOWER Maryland funding. They must market the SEEARP rebates very aggressively to ensure program success, but then must also track it carefully and be prepared to remove the marketing materials at any given point, to ensure that oversubscription is not an issue. Another major cost will be the educational aspects for consumers, retailers, and internal employees. Next Steps MEA has had extensive conversations with each of the utilities and the Maryland Public Service Commission staff. Upon receipt of DOE funding, MEA will brief the PSC on the approved program (including any DOE changes) and collaboratively work through any other programmatic details as they arise. While the program application is under DOE review, MEA will continue to work through program details with the utilities, including the development of grant implementation agreements. As part of this application, MEA has included letters of support from each of the five IOUs, demonstrating their willingness to partner with MEA to move forward with the proposed appliance rebate program. Goals, Objectives, and Estimated Benefits Page 8

9 This program has the goal of reducing energy consumption in the state of Maryland by encouraging consumers to purchase energy efficient appliances through the distribution of rebates. Purchasing such appliances will save consumers money on their electricity bills and will help meet the EmPOWER Maryland goals set by Governor O Malley. We estimate that more than 68,000 rebates will be available to consumers around the state, with an estimated electricity savings of nearly 33,000,000 kwh annually. MEA has the goal of making this program accessible and easy to access for all Maryland consumers. Running the program through the major utilities helps to achieve this goal by eliminating customer confusion, streamlining marketing efforts, and building off of existing program infrastructure. Consumers will simply contact their local utilities for all appliance rebate needs. MEA will also make the program available to the remainder of the state s population by hiring an implementation contractor to reach consumers who would not otherwise benefit from appliance rebates. Offering rebates on ENERGY electric heat pump water heaters and higher-tiered refrigerators and clothes washers will result in significant electricity savings, which will be applied toward the EmPOWER Maryland electricity reduction goals for the state. These rebates will push consumers toward clothes washers and refrigerators with even greater savings than ENERGY models, in turn influencing the market share and leading to more savings than would have otherwise been achieved. By including a rebate on the ENERGY electric heat pump water heater, MEA hopes to Page 9

10 contribute to market development for this product. ENERGY electric heat pump water heaters save more than 2,600 kwh per unit annually over a standard model. The market share is currently less than 1%, and energy savings are significant. Financial benefits to consumers will be substantial. Based on energy savings figures provided by DOE s consultant D&R International, a Tier 2 or higher clothes washer will have a lifetime electricity savings of $316, in addition to water and gas savings. A Tier 2 or higher refrigerator saves $328 in energy costs over its lifetime. An ENERGY electric heat pump water heater saves up to 55% in electricity use over a standard model, leading to very significant energy cost savings. Maryland believes that the proposed program can be implemented quickly, will have reasonable administrative costs, will provide economic stimulus while benefitting consumers financially, and will have low risk of fraud. Page 10

11 Chart 1: EmPOWER Maryland and SEEARP Appliance Rebate Programs Appliance Rebates: Maryland's IOUs Allegheny Power BGE Delmarva Power EmPOWER Maryland $75, Tier 2 and 3 Clothes Washers Refrigerators Electric Heat Pump Water Heaters SEEARP Total Rebate, Tier 2 and 3 EmPOWER Maryland $50 $125 $50, ENERGY $50, ENERGY $50 $100 $50, ENERGY $0 $50 $50 $50, ENERGY Pepco $0 $50 $50 $50, ENERGY SMECO $50, ENERGY $50 $100 $50, ENERGY SEEARP $25, Tier 2 and 3 $25, Tier 2 and 3 $25, Tier 2 and 3 $25, Tier 2 and 3 $25, Tier 2 and 3 Total Rebate, Tier 2 and 3 EmPOWER Maryland SEEARP $75 $0 $300 $300 $75 $0 $300 $300 $75 $0 $300 $300 $75 $0 $300 $300 $75 $0 $300 $300 Total Rebate Page 11

12 Outline your specific program objectives in Table 1. All savings numbers should be calculated using the Program Planning Excel Spreadsheet tool. Table 1. Program Objectives Program Objective Target Value Total Number of Rebates Paid 68,013 Total Number of Appliances Replaced 68,013 Total Number of Appliances Recycled 53,321 Total Annual Energy Savings (kwh) 33,281,977 Total Annual Energy Savings (Therms) 60,469 Total Annual Water Savings (gallons) 172,886,940 Total Annual CO 2 Reductions (lbs) 68,561,258 Jobs Created* 64 * DOE is waiting for specific OMB guidance on how to quantify jobs created for reporting purposes. In the meantime, the general guidance is that every $92,000 expended leads to one "job created. NOTE: The figures for targeted number of appliances replaced and recycled are estimates based on type of appliance and existing recycling programs in place by Maryland s utilities. In compliance with Section 124 of the Energy Policy Act of 2005, the program requires that all appliances will be replaced. Recycling estimates are based on a 100% refrigerator recycling rate in Allegheny Power territory, where recycling is a program requirement, and 90% recycling rate for clothes washers and refrigerators in the rest of the state. Please also note that figures used to calculate energy savings provided by Tier 2 and above appliances on the MD_Planning.xls spreadsheet were provided to MEA by DOE s contractor, D&R International. Energy savings figures represent the full savings between standard models and ENERGY or Tier 2 and above models. Page 12

13 Enter a comprehensive timeline with key milestones for your program in Table 2. When will key decisions be made? When will the program be announced? How long will it last? Please add your own milestones as needed. Table 2. Program Timeline and Milestones Program Milestones Target Date Application submitted to DOE October 15, 2009 Program approved and funding received from DOE December 2009 Grant implementation agreements signed with investor-owned utilities December 2009 MEA hires rebate implementation processor for non- IOU customers February 2010 IOUs begin program rollout March 2010 Program rollout begins for non-iou customers April 2010 Analysis of program and possible reassignment of funds among products or among utilities Ongoing NOTE: MEA will work with each individual utility to roll out programs. This schedule may be slightly varied for each utility, as they must coordinate with their EmPOWER Maryland programs. I. Program Overview Please populate the Program Planning Excel Spreadsheet before completing this section. All data in the tables below should correspond with the data in the Excel spreadsheet. Please include an estimate of the total number of appliances that will be recycled through your program, where applicable. Products to be Rebated Rebate Level ($) Table 3. Rebate Detail Targeted Quantity Total Cost Targeted # of Products Recycled Clothes Washers, $50 22,905 $1,145, CEE Tier 2 and above Refrigerators, CEE $25 36,109 $902,725 32,708 Tier 2 and above Electric Heat Pump $300 8,999 $2,699,700 0 Page 13

14 Water Heaters $ $ Total Rebates 68,013 $4,747,675 53,321 NOTE: Recycling estimates are based on a 100% refrigerator recycling rate in Allegheny Power territory, where recycling is a program requirement, and 90% recycling rate for clothes washers and refrigerators in the rest of the state. II. Explanation of Covered Products If all of the State s proposed products are from the recommended list included in the FOA, then no additional explanation is needed. You can skip to the next section. If other ENERGY qualified products or cold-climate products are proposed, then you must provide a justification for each product. Data for these additional products must also be included in the Program Planning Excel Spreadsheet. Justification for ENERGY or cold-climate appliances not on the recommended list. For each product selected, explain why it will provide significant benefits in your State/Territory, the annual per-unit energy savings, estimated annual sales of product in your State (market share), and price difference between the proposed product and the standard efficiency alternative. Include any other explanation you feel justifies the inclusion of this product in your program. Product: N/A Annual per-unit Energy Savings: N/A Estimated Sales or Market Share in your State: N/A Price Difference: N/A Explanation on how this product benefits your State: N/A III. Integrating SEEARP Rebates with Existing State or Utility Incentives States must design their SEEARP rebates to complement existing State or utility incentives available to local residents. In addition, States must ensure that the ARRA funds supplement and do not supplant current efforts. In the table below, please note for each product you propose to rebate whether there are any current (or planned) State rebates or tax credits, or any utility rebate programs. Please base this on what is planned for Page 14

15 Table 4. Overlap with Existing Incentives Other State Rebate or Tax Products to be Rebated Incentive Available? (Yes / No) ENERGY Clothes No No Washers and Refrigerators, non- IOU territory ENERGY Electric Heat No (Federal tax credit is No Pump Water Heater available) Clothes Washer, CEE Tier 2 and No above, IOU territory Refrigerator, CEE Tier 2 and above, IOU territory No Utility Rebates Available? (Yes / No) Yes, for ENERGY model (except in Pepco/DPL) Yes, for ENERGY model For those products where there will be other rebates or incentives available, please list each of the individual programs in the table below. Complete one table for each applicable product. You do not need to list utility programs offered for products you will not be rebating. Include the name of the sponsoring organization (i.e., the utility or other program sponsor), the efficiency level being used (such as ENERGY ), the rebate amount, when the program will be in operation, and budgeted number of rebates if known. Then explain how the State s proposed rebate level is designed to complement these other efforts. Some possible explanations are noted below. You can copy the table as many times as needed. Product 1: Refrigerators Program Sponsor Allegheny Power BGE Delmarva Power Pepco SMECO Efficiency Level ENERGY ENERGY ENERGY ENERGY ENERGY Rebate Amount When Available Budgeted Quantity Of Rebates $50 January ,089 $50 Available now 16,200 $50 Available now 6,000 $50 Available now 18,000 $50 January ,705 How does State s Proposal Complement these Programs? (Check all that apply) Layering on top of existing rebates to increase total incentive payment to consumers. X Directing State rebate to products at a different or higher efficiency level. Extending the availability (i.e., the quantity) of existing planned rebates. Page 15

16 Other (Please Explain) Product 2: Clothes Washers Program Sponsor Efficiency Level Allegheny Power CEE Tier 2 and above BGE ENERGY Delmarva Power Not currently planned Pepco Not currently planned SMECO ENERGY Rebate Amount When Available Budgeted Quantity Of Rebates $75 January ,481 $50 Available now 17, $50 January ,211 How does State s Proposal Complement these Programs? (Check all that apply) X Layering on top of existing rebates to increase total incentive payment to consumers. (Allegheny Power service territory) X Directing State rebate to products at a different or higher efficiency level. -- Offering CEE Tier 2 and above for BGE and SMECO (which currently only offer ENERGY rebates) and for Pepco and Delmarva (which currently have no rebate for clothes washers). Extending the availability (i.e., the quantity) of existing planned rebates. Other (Please Explain) IV. Program Implementation Strategy A. Program Delivery Roles and Responsibilities Explain who will manage and deliver the State s program. Outline the role of the State and any subcontracted delivery agents, such as third party program implementers, local utilities, recyclers, retailers, etc. Explain your plan for quality assurance for data collected. If using utilities to deliver program, explain how the State will ensure that all residents can participate in the program. There are two components to Maryland s appliance rebate program: (1) MEA will pass along the majority (~97%) of the SEEARP funding to Maryland s investor- Page 16

17 owned utilities, who already have appliance rebate programs in place. This will help the State use the existing program infrastructure set up by the IOUs for this effort. The IOUs and their contractors will manage and deliver the program through their established processes. MEA will gather data in the form of regular monthly reports from the utilities, specifying the number of rebates paid with SEEARP funding, the total number of rebate paid, the number of appliances recycled, the number of jobs created, and the estimated energy saved and CO2 emissions avoided. (2) Not all of Maryland s customers are served by the IOUs. MEA will hire a rebate implementation contractor to manage and deliver the same appliance rebate strategy to customers of municipal and cooperative utilities. This will ensure that all residents of the state have access to this program. MEA has released an RFP and the application process will be underway shortly. MEA expects that the RFP will complete the Maryland procurement process by February SEEARP funds for non-iou customers will be encumbered in January/ February 2010 and the program will begin in March/April B. Program Partners List other parties the State will collaborate with to deliver its program, including retailers, contractors, local utilities, nonprofit groups, outreach partners, neighboring States, etc. Please describe any Recommendations for Proposals if issued by the State and criteria for selection. Please describe any new networks created. The State will collaborate with the local utilities (including the municipal and cooperative utilities) to deliver this program. Along with the utilities, the state will reach out to existing plumbing and HVAC contractor networks to provide education about electric heat pump water Page 17

18 heater rebates. MEA has issued a Request for Proposal for a rebate implementation contractor for the program to include customers of the municipal and cooperative utilities. This contractor will have the ability to run a rebate implementation program, which includes marketing, processing rebate applications, and distributing rebate funds to consumers. MEA will specify that the contractor must use a reservation-based rebate system to avoid oversubscription to the program. C. Rebate Processing Explain how rebates will be paid to consumers in a timely fashion. Examples include mail-in rebate applications and instant rebates provided by participating retailers at the point of sale. For mail-in rebates, please specify the method of payment (e.g., direct deposit, check, etc.). Note who will process the rebate payments and how quickly consumers will receive rebates. Explain how the State will handle customer inquires about their rebates and remedy any problems. If rebates will be paid in conjunction with utility rebates, then explain how the commingled funds will be tracked. Also describe how the State will ensure it can handle a high volume of rebate requests in a timely fashion and track the remaining budget to avoid oversubscription. Rebates for this program will be mail-in, with the possibility of receiving bill credits in Allegheny Power territory. Consumers will submit a rebate form (found online or in the store) along with their receipt and other requested information. Once the appliance is purchased, customers fill out the form and send it to the utility s contractor. Rebate applications must include customer account number, original sales receipts, and customer information, and must be received within a specified amount of time from purchase. Contractors will verify customer eligibility and qualifying appliance information, and process the rebate for distribution to the consumer. Customers of the investor-owned utilities will be able to contact the utility contractor Page 18

19 call center for customer inquiries and other problem solving. Customers of non-iou utilities will work through MEA s contractor call center for any inquires. Utilities will track EmPOWER Maryland funds and SEEARP funds separately, using their existing tracking systems. All rebates for electric heat pump water heaters will come from SEEARP funding, as will the additional $25 paid for Tier 2 or above refrigerators and $50 for Tier 2 or above clothes washers. For the non-iou customers, 100% of the funding will come from SEEARP. The contractors hired by the utilities and by MEA are experienced at processing a high number of rebates. In Maryland, ICF International serves BGE and SMECO, and Honeywell will serve Pepco and Delmarva Power. Customer information will be tracked in databases held by the utilities and their contractors, which will help ensure the appropriate number of rebates per household. The utilities receive alerts from their contractors when funding reaches a set percentage of the budget, which will allow program managers to scale back funding or change marketing strategies if necessary. Consumers will have an idea of how much funding is left for the program through the marketing and outreach strategies from each of the utilities. Utilities will not be offering a rebate reservation system, since that system is not in place for their existing programs. However, utilities will work with mass media outlets throughout the state to ensure that consumers realize the program is a limited-time offer, and will only be available on a first-come, first-served basis. It will be made clear on the application and on the utility website that there is no guarantee of Page 19

20 getting a rebate, and once the funding is used, no further rebates will be funded with SEEARP dollars. The utilities can also remove the application from their website and from the retail stores as funding becomes lower. This will help prevent oversubscription. Rebate processing time varies by utility. It currently takes BGE 6-8 weeks to process rebates, though Pepco and Delmarva Power anticipate turning the rebates around to customers in less than 3 weeks. D. Program Eligibility Rules Outline the specific eligibility rules the State will utilize for its program. This should include a definition of eligible applicants, including who can apply, number of rebates per household, residency requirements, etc. IOU customers must work through their utility provider in order to receive their rebates, and one must be a Maryland customer of that particular utility to be eligible for the rebate. IOUs allow their customers to participate across all the programs for which they qualify, so each account can qualify for one of each appliance. Non-IOU customers will work with MEA s contractor, and must prove they are a customer of one of the specified municipal or cooperative utilities in the state. These include: Choptank Electric Cooperative, Hagerstown Municipal Utility, Easton Municipal Utility, Thurmont Municipal Utility, Berlin Municipal Utility, Williamsport Municipal Utility, Somerset Municipal Utility, and A&N Cooperative. Consumers are limited to one rebate per appliance, per household. All participants must be Maryland residents. In addition, consumers must certify that they will be replacing an existing appliance. This Page 20

21 requirement will be clearly listed in the marketing materials and in the eligibility requirements. Consumers will self-certify that they are replacing their appliances by checking a box on their application. Unless this box is checked, they will not receive the SEEARP funding. E. Product Replacement Outline the various steps the State will take to target its program toward the replacement of existing appliances. Some examples include eligibility criteria, rebate structure, and recycling efforts. MEA believes that the choice of products to include in the SEEARP will naturally lend itself to product replacement. Tier 2 and 3 clothes washers and electric heat pump water heaters will replace older, less-efficient standard models. Though it may be desirable for the consumer to have a second refrigerator, MEA and the utilities will work to target their marketing campaigns to educate the public about the extra energy costs to do so. In addition, MEA and the utilities will clearly state in the eligibility requirements that product replacement is mandatory in order to receive SEEARP funding. Consumers must self-certify that they are replacing old appliances before they receive a SEEARP rebate. F. Product Recycling Specify for which products, if any, the State will be requiring recycling. As noted in the FOA, this is most appropriate for refrigerant-containing appliances such as refrigerators, freezers, and room air conditioners. The State of Maryland will not require recycling for any of the appliances, since the SEEARP funding cannot be used to cover the costs of a recycling program. However, MEA will work with the utilities to encourage consumers to utilize existing refrigerator recycling programs. MEA plans to take full advantage of existing refrigerator recycling programs already in place in Allegheny Power and BGE service territory. Allegheny Power requires that customers turn in Page 21

22 their old refrigerators for recycling before they receive their rebate. BGE runs a separate program, where they pay customers $50 to pick up and recycle their old refrigerator. SMECO is currently developing a recycling program similar to BGE s program. MEA will encourage the creation of recycling programs in Pepco and Delmarva Power territory. If you are requiring recycling, please outline your basic approach. (You may also include a more complete recycling plan as an optional attachment to your application.) Who will administer the recycling component? How will the products be collected? Who will handle the actual decommissioning, and how will recycling be verified or reported? Recycling will be handled by Allegheny Power, BGE, and SMECO, where applicable in their service territories. Spell out the applicable recycling laws in your State. The State environmental management departments and recycling and landfill permits agencies are good sources for this info. Maryland s recycling law is as follows: In 1988, the Maryland Recycling Act (MRA) authorized MDE to reduce the disposal of solid waste in Maryland through management, education and regulation. The MRA requires that each of Maryland s jurisdictions develop and implement recycling programs. Jurisdictions with populations greater than 150,000 are required to recycle 20% of their waste and jurisdictions with populations less than 150,000 are required to recycle 15% of their waste. In no case is the recycling rate to be less than 10%. If a jurisdiction fails to meet the specified reductions, State and local authorities can prohibit the issuance of building permits for all new construction. Page 22

23 Maryland tracks the recycling of white goods as part of the Maryland Recycling Act, but does not require their recycling by law. G. Marketing and Outreach Outline steps the State will take to promote the rebate program, including informing residents of the start date, eligibility rules, funds remaining for rebates; and, if used, the application process. List outreach tools the State will use, (e.g., press releases), Web sites, e-newsletters, e-lists, Public Service Announcements (PSAs), advertisements, print materials, earned media (interviews, articles written). Does the State intended to become an ENERGY partner and use ENERGY materials? The State and the utilities will use a varied marketing strategy to reach as many consumers as possible. Marketing will be the primary responsibility of the utilities, as they will be given administrative funding to be used to enhance their existing efforts. This can include in-store, point-of-purchase marketing, radio, TV, direct mail, bill inserts, billboards, newspapers, and internet publicity. It will also be important to work with trade and retail groups to promote the products. The utilities have indicated that it should be relatively straightforward to incorporate marketing of the SEEARP products into their existing marketing strategies. MEA will publicize the program through our website and our newsletter. Our website gets an average of 15,000 visits per month, and the online newsletter is distributed to about 2,400 optin subscribers. MEA will also issue press releases to local media outlets, informing consumers that the SEEARP rebates are available from their local utility providers. MEA is an ENERGY Partner, and has been so since the mid-1990s. MEA has received 3 national ENERGY awards, ENERGY Outreach in 2005 and 2006 and Excellence Page 23

24 in Home Performance with ENERGY Promotion in Along with the investor-owned utilities, the Maryland Public Service Commission, and others, MEA participates in a General Awareness Committee that reviews and comments on all energy-related media items prior to release on a statewide basis. In addition to the SEEARP appliance rebate information that will be found on each individual utility website, MEA will create and maintain a master list of the available appliance rebate programs on our website. This will serve as a central source of information for consumers around the state. Explain how the State will keep consumers informed regarding the status of available funding for rebates and product types to meet consumer expectations. What disclaimers will you include in program materials and rebate applications? Will you rely on a first-come first-served policy for processing rebate payments? Will you announce to the public when funds are nearly depleted? Please be specific. All marketing materials will make it clear that rebates are available while funding lasts. Rebates will be processed on a first-come, first-served basis, and disclaimers will be added to the application and all marketing materials. Utilities will work to avoid oversubscription by reevaluating the program at specific intervals and distributing this information to consumers through their websites and other forms of mass communication. Data exchanges between utilities and their contractors will occur on a regular basis. Utilities will not be offering a rebate reservation system, since that system is not in place for their existing programs. However, utilities will work with mass media outlets throughout the state to ensure that consumers realize the program is a limited-time offer, and will only be available on a first-come, first-served basis. The media will also be essential in announcing when funding is nearly depleted, while stressing that there is no guarantee that consumers will receive the rebate. Page 24

25 The utilities can remove the application from their website and from the retail stores as funding becomes lower. MEA will hire a rebate implementation contractor who has the capability to implement a rebate reservation system, thereby avoiding the problem of oversubscription for non-iou customers. V. Oversight and Reporting A. Oversight Each State is responsible for overseeing the successful implementation of its program, even if the actual delivery is being subcontracted to another organization. Please summarize what oversight mechanisms the State will put in place for quality assurance and to minimize fraud. To ensure a high-quality program, MEA will do the following: 1. Meet with each utility to review the specifics of each program implementation effort; 2. Require monthly written reports that include trend analysis for fund expenditures; and 3. Hire an EM&V contractor to review all ARRA program expenditures and set up evaluation metrics to ensure quality program implementation and minimize fraud. The Maryland IOUs will also have their own statewide EM&V contract overseen by the Maryland Public Service Commission to review the program. B. Progress Reporting Page 25

26 As outlined in the FOA, States are required to submit a progress report for all activities on a quarterly basis. DOE will issue clarification shortly on any additional reporting requirements with specific Excel tools for ease of reporting. States should plan staffing accordingly to accommodate monthly tracking of the metrics listed below, as well as potential Recovery Act reporting. This reporting does not replace any additional reporting required under The American Recovery and Reinvestment Act of 2009, Pub. L Additional monitoring and reporting guidance will be forthcoming. Please refer to your FOA for detailed information. Notes on Metrics: Total # of State Rebates Paid Although reporting will be quarterly, the State must track rebates paid monthly for each category of appliances selected. Total # of other State/Utility Rebates Paid Based on the listing of other State and utility programs in the State, as supplied in Section III., above, the State must report the rebates actually paid to consumers by other State or utility programs. Total # of Appliances Recycled Based on management of recycling as detailed in section F of the Program Implementation Strategy, explain how the State will collect information on appliances recycled by type over the reporting period. Number of Jobs Created For all project types, the number of jobs that are created or retained during the reporting period should be reported; each job should only be reported once. This number must be based on actual employees. If actual jobs cannot be verified, the state may propose its own methodology for estimating jobs; this methodology must be approved in advance. Estimated Energy Saved and CO 2 emissions avoided States are expected to provide the interim estimated benefits due to the rebates provided. This primarily takes the form of annual energy savings and CO 2 abatement due to activity in the period. For example, if 1000 rebates were delivered in the quarter, report the expected annual savings due to the appliances sold. The reporting framework will include an estimate calculation of kwh, BTU saved and CO 2 for each specific appliance. The State may report this value or values based on its own methodology, with justification and approval. Page 26

27 VI. Applicant Contact Information State Program Contact One (Business Officer) (The person who is responsible for the dayto-day management, including progress reporting.): Name and Title: Lauren Swiston, Energy Efficiency Program Manager Agency: Maryland Energy Administration Phone: State Program Contact Two: Name and Title: Walt Auburn, Director, Energy Efficiency Agency: Maryland Energy Administration Phone: State Single Point of Contact to Comply with Executive Order (FOA, page 13): Name and Title: Linda C. Janey, J.D., Director Agency: Maryland State Clearinghouse For Intergovernmental Assistance Telephone: (410) Website URL where the State application will post public communications: Contact Information for each sub awardee (expand as needed): Company Contact Person Telephone Number Website URL Allegheny Power Ed Miller om BGE Ruth Kiselewich Delmarva Power Dave Pirtle Pepco Dave Pirtle SMECO Jeff Shaw Page 27