Energy Savings from Business Energy Feedback

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1 Energy Savings from Business Energy Feedback Behavior, Energy, and Climate Change Conference 2015 October 21, 2015 Jim Stewart, Ph.D.

2 INTRODUCTION 2

3 Study Background Xcel Energy runs the Business Energy Feedback pilot in CO and MN Targets small and medium businesses (SMBs) SMBs account for about 45% of U.S. commercial electricity consumption Pilot theory Many business managers and employees aren t attentive to energy use or aware of savings opportunities 3

4 Research Questions What are the energy savings from business energy feedback? Do savings vary across months of the year? Do high usage customers save more energy than low usage customers? Do some business segments save more energy than others? 4

5 XCEL ENERGY COLORADO BUSINESS ENERGY FEEDBACK PROGRAM 5

6 Xcel Energy Colorado BEF Pilot Pilot implemented by Opower Beginning in summer 2014, Xcel Energy sent business energy reports to about 10,000 SMB customers Eligibility requirements Receive electric or electric and gas service Average daily energy use greater than 1 kwh and less than 1,000 kwh Agriculture, mining, equipment, wholesale segments excluded Pilot implemented as randomized control trial Expected to yield unbiased and robust estimates of pilot treatment effects 6

7 Xcel Energy Colorado BEF Pilot (cont.) First report sent on June 24, 2014 Seven reports sent during 1 st program year Business Energy Report Mailings Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Reports contained normative comparisons, energy use analysis, and savings tips 7

8 Example Business Energy Report 8

9 Participant Business Characteristics Restaurants and Bars, 11% Retail Services, 16% PILOT BUSINESS SEGMENTS (% OF PARTICIPANTS) Other, 16% Retail Trade, 17% Offices, 40% Average Daily Consumption Per Business (kwh/day) AVERAGE ENERGY CONSUMPTION PER BUSINESS BY SEGMENT (KWH) 50 0 Food Restaurants Services Offices Other Retail Services Retail Trade Notes: businesses assigned to segments based on NAICS codes. 9

10 ENERGY SAVINGS ANALYSIS 10

11 Savings Estimation Collected pre- and post-treatment monthly electricity and gas bills for pilot SMBs Verified random assignment resulted in balanced treatment and control groups Panel regression analysis OLS estimation with standard errors clustered on businesses Several model specifications to test robustness of savings estimates 11

12 First Year BEF Pilot Savings Energy savings Percent Energy Savings 1.2 Electricity (daily kwh per customer) Natural gas (daily therms per customer) 6% 5% Electricity Natural gas 1 4% % 2% 1% 0% 0.2% 0.9% % -2% 12

13 Estimates of Monthly BER Electricity 2.5% 2.0% 1.5% Savings Point estimates of savings increase during winter months Electricity Savings 1.0% 0.5% 0.0% -0.5% -1.0% -1.5% -2.0% Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 % savings LB 95% CI UB 95% CI Note: 95% confidence intervals estimated using robust standard errors clustered on businesses. 13

14 BEF Electricity Savings by Usage Quartile 2.0% 1.5% 1.0% Electricity Savings 0.5% 0.0% -0.5% -1.0% 0.1% -0.4% -0.4% 0.5% -1.5% -2.0% Quartile 1 Quartile 2 Quartile 3 Quartile 4 Pre-Treatment Usage Quartile Note: 95% confidence intervals estimated using robust standard errors clustered on businesses. 14

15 BEF Electricity Savings by Business Segment 4% 3% 2% 1.6% Only retail trade segment shows positive and statistically significant savings Electricity Savings 1% 0% -1% -0.2% -0.3% -0.4% -2% -3% -4% Offices Retail Trade Retail Services Restaurants and Bars Note: 95% confidence intervals estimated using robust standard errors clustered on businesses. 15

16 Estimates of Monthly BEF Gas Savings 5.0% 4.0% 3.0% 2.0% Gas Savings 1.0% 0.0% -1.0% -2.0% -3.0% -4.0% -5.0% Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Statistically significant savings in two winter months Note: 95% confidence intervals estimated using robust standard errors clustered on businesses. 16

17 BEF Gas Savings by Usage Quartile 7% 5% 3% Gas Savings 1% -1% -3% -1.8% -0.1% 1.2% 1.0% -5% -7% Quartile 1 Quartile 2 Quartile 3 Quartile 4 Pre-Treatment Usage Quartile Note: 95% confidence intervals estimated using robust standard errors clustered on businesses. 17

18 BEF Gas Savings by Business Segment 4% 3% 2% Gas Savings 1% 0% -1% 0.0% 0.3% 0.9% -2% -3% -4% -1.8% Offices Retail Trade Retail Services Restaurants and Bars Note: 95% confidence intervals estimated using robust standard errors clustered on businesses. 18

19 CONCLUSION 19

20 Summary of Key Findings BEF pilot did not yield expected savings Estimates were positive but not statistically significant Savings estimates were imprecise Sample sizes relatively small Some evidence of savings when savings estimated by month, business segment, and usage quartile Point estimates of electricity and gas savings higher during winter months Retail trade customers had statistically significant electricity savings Point estimates of savings greatest for biggest users 20

21 Future Research Evaluate program again during second year Specifically investigate Savings persistence of retail trade customers Sources of any gas and electric savings during summer and winter months Pilot impacts on efficiency program participation and customer engagement Conduct surveys/focus groups to understand interest in efficiency, satisfaction with reports, and barriers to saving energy 21

22 Contact Jim Stewart, Ph.D., Principal Economist (503)

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