Small Business Energy Advantage Northeast Utilities (CL&P, WMEC)

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1 Program Synopsis The Program (SBEA) provides conservation and load management turnkey services and incentives for cost-effective custom measures installed by small (<100 kw annual demand) commercial and industrial customers in the Connecticut Light & Power (CL&P) service territory. The SBEA program minimizes customer effort and reduces financial barriers by providing direct services (onsite assessments and direct installation) and incentives. In addition to custom incentives based on energy savings, SBEA also offers a zero-percent financing option to credit-qualifying customers with a loan repayment term designed to maintain positive cash flow for the customer. There is also an educational component that educates customers about the energy efficiency benefits of SBEA. Program Type Incentive PrescriptiveRebates CustomIncentivesSPC BillCreditsRateDiscounts Services DirectInstallation FinancingLoansLeasing FreeMeasures InHousePlusSubs IncentiveOther Information and Training GeneralEducation MailAudit TelephoneAudit OnSiteAudit OnLineAudit DesignAssistance FeasibilityStudies EndUserTraining TradeAllyTraining Program Focus Primary Market Events Targeted AllMarketEventsTargeted NewConstructionRenovation ExistingConstructionAll ExistingConstructionRetrofit ExistingConstructionNaturalReplac ExistingConstructionEarlyRetire Primary Program Focus EndUser SupplySide EndUserAndSupplySide Residential End User Target Markets ResidentialALL SingleFamily MultiFamily MobileHome - 1

2 LowIncome ResOther Commercial/Industrial End User Markets Commercial All Offices Retail Restaurant Public (govt.) Facilities Grocery Store Health Care Education Lodging (Hotels/Motels) Warehouses Industrial All Other Market Barriers End User Supply Side Information or Search Costs Performance Uncertainties Asymmetric Information and Opportunism Hassle or Transaction Costs Hidden Costs Misplaced or Split Incentives Product or Service Unavailability Externalities Non-Externality Pricing Inseparability of Product Features Access to Financing - 2

3 Bounded Rationality Organizational Practices or Customs Irreversibility Other End User Other Supply Side Customer Sizes Targeted (C/I only) VerySmall Small Medium Large Supply Side Actors Targeted SupplySideActorNotProgFocus AorEFirms Manufacturers Realtors Developers Builders Contractors TradeAssociations WholesalersDistributors Retailers EnergyServiceCompanies NonProfitNotForProfitGroups Govt Other Types of measure/end use technologies ALL MEASURES HVAC High Efficiency DX/HP High Efficiency Chillers High Efficiency Room/Terminal Economizers Control Systems Variable Speed Drives Occupancy Sensors Lighting Compact Fluorescents Electronic Ballasts Reflector Systems Efficient Fluorescent Lamps (T-8, T-5, etc.) Lighting Controls Occupancy Sensors High Intensity Discharge - 3

4 Duct Sealing and Balancing Equipment Testing/Tune-up Commissioning Retro-commissioning Space Heating Heat Pump Water Heating Load Control (Cycling) High Efficiency Insulation Blankets Low-Flow Showerheads Low-Flow Aerators Solar Assisted Motors High Efficiency Variable Speed Drives Industrial Process Compressed Air Motors Pumps Day lighting Applicances Refrigerators Dish Washers Clothes Washers Clothes Dryers Office Equipment Plug Load Building Envelope Insulation Infiltration Control Glazing and Glazing Control Windows Refrigeration High Efficiency Controls Variable Speed Compressors Multi-Stage Compressors - 4

5 Commissioning Other (specify) Program Context Program (SBEA) is run by Connecticut Light & Power (CL&P). DPUC is primarily concerned about equity and reaching small customers; about 60-70% of CL&P rebates go to small customers (the remaining 30% go to large customers). Funding changes yearly. Due to the state budget crisis, funding for all Connecticut public goods programs was reduced dramatically in This resulted in drastic program staff layoffs (SBEA staff dropped from project administrators and 10 contractors in 2002 to 1.25 FTE in 2003). Program Components Program Management SBEA is primarily vendor driven. CL&P solicits proposals from turnkey contractors who are charged with implementation, marketing, recruitment, facility assessments, and equipment installation for SBEA. CL&P approves vendor proposals, performs post-installation quality control, and reimburses contractors for incentive costs and financing fees. In 2002, FTE consisted of project administrators and 10 contractors. Implementing Organization Utility Nonprofit Govt Private IOOther Implementation Structure InHouse TurnkeyContractor InHouseAndSubcontractors Other Reporting and Tracking CL&P uses the same tracking system utilized by an identical SBEA program run by United Illuminating. The system tracks incentive dollars, annual and lifetime kwh savings, and costeffectiveness (amount spent per kwh obtained). Measure-level information is indirectly available, as the system cannot generate fixture-specific reports. The system also tracks project milestones, including the following dates: when the lead goes to the contractor, when the customer is contacted, the initial customer visit, project approval date, contract signature date, installation date, and invoice date. CL&P internally tracks the day the job is processed and paid. The program manager uses the tracking system to compare incentives to rate class to address DPUC equity concerns. Verification and Quality Control Verification consisted of some spot pre-inspections and 100% post-inspection in In 2003, budget cuts allowed for random spot inspections only. Quality control is built into the contractor - 5

6 selection process; contractors are selected based on experience and previous participation in other contractor-driven programs and remain in SBEA only if their work continues to be of high quality. Participation Process Cost-effective, custom measures approved by CL&P (2-year payback limit) are eligible for SBEA incentives. CL&P solicits proposals from turnkey contractors who recruit potential customers, perform assessments of their facilities, and fill out necessary paperwork for the customer. Contractors then upload assessment data electronically into CL&P s system, and CL&P will review the data, comment, approve, and ultimately send the files back to the contractor through this communication channel on a daily basis. Turnaround time is usually 2-3 days. Approval is based on the reasonableness of the proposed replacement including hours of use, wattages (of lighting measures), and kwh savings. Once approved the contractor obtains permission from the customer to move forward, and proceeds with installation. A unique aspect of SBEA is that the contractor fills out all the paperwork for the customer, and performs the installation. CL&P will inspect the facility post-installation to verify completion as established in the original proposal. Once customers commit to SBEA, CL&P reimburses contractors for the incentive cost and any finance fees incurred. Outreach, Marketing and Advertising Contractors market SBEA using outstanding customer contacts, general ads and targeted direct mail. Installation and Delivery SBEA is a direct installation program focused on measure installation. It provides custom incentives for up to 50% of the cost of retrofit lighting measures (typically 35-40% when viewed from a full installed cost perspective) and up to 100% (typically %) of the total installation cost of non-lighting measures. SBEA also offers a zero-percent financing option to creditqualifying customers. The loan repayment term is set at a level to maintain positive cash flow for the customer (typically a 2-year term), and often results in a 50/50 split between the incentive paid and loan amount. The vast majority of energy impacts in SBEA come from lighting. Typical projects range from $4,000-10,000 in total cost. Program Evaluation No formal evaluations have been conducted; although one is scheduled for early A Performance Review of Connecticut s Conservation and Load Management Administrator Performance, Plans, and Incentives (10/31/03) found that since the program is already wellsubscribed and goals are met, CL&P is disinclined to take a proactive marketing approach to SBEA and instead has preferred to wait for customers or trade allies to approach CL&P. Other key findings from this report indicate: an increase focus on cooling measures for increased summer peak savings; selective incentive reductions and a restructuring of the financial offer in order to reduce dollars per kwh; and exploration of coordinated delivery with gas utilities to maximize program net benefits. Quantitative Data Program Year: 2002 to

7 Participation rate is available Cost Breakdown is available Net Savings Breakdown is available Net-to-Gross is available Total Resource Cost Data is available Quantative Data Summary: Participation and savings data are available from a secondary source. Full quantitative data have been requested but are still pending. List Of Key Sources Connecticut DPUC Website, Dan York, PhD and Martin Kushler, PhD. "Small Business Energy Advantage, Northeast Utilities: CL&P and WMECO." Small Commercial Honorable Mention Program Profile, America's Best: Profiles of America's Leading Energy Efficiency Programs, ACEEE, April Review of Connecticut's Conservation and Load Management Administrator Performance, Plans and Incentives. DPUC Docket No , Report Prepared by Optimal Energy, Inc, VEIC, and PAH Associates for the Connecticut Office of Consumer Council. DPUC Review of the Connecticut Light and Power Company's and the United Illuminating Company's Conservation and Load Management Programs and Budgets for Year 2003 and State of Connecticut, Department of Public Utility Control, May 28, Conservation and Load Management. First Quarter 2002 Highlights, United Illuminating, ECMB, May 9, Connecticut's Conservation and Load Management Fund. Year 2001 Accomplishments, C&LM, presented to the Working Group, Public Act 02-95, September 18, CL&P Year 2003 C&LM Proposed Budget. CL&P Year 2002 C&LM Proposed Budget. CL&P DSM Program Summaries, CL&P Marketing Communications 2002 Program Budget Plan, Marcom. Contact Information Name John Matchett - 7

8 Title Company Phone Program Administrator/Evaluator CL&P (NU) (860) Ext. - 8

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