AEP Ohio Business Incentives for Energy Efficiency. Topics. Why Energy Efficiency? 11/24/2014. Economic Development 101 November 21, 2014

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1 AEP Ohio Business Incentives for Energy Efficiency Economic Development 101 November 21, 2014 Topics Why Energy Efficiency Prescriptive Custom New Construction Express (Small Business) Self Direct Retocommisioning (RCx) Continuous Energy Improvement ( CEI) Data Centers Energy Efficiency wrap-up Why Energy Efficiency? Less expensive than new generation Creates and keeps jobs in Ohio Environmental benefits Controls customers long term operational costs Increased productivity Adds to the safety and comfort of work environments Business opportunity for both AEP Ohio and its customers: Win Win 1

2 Prescriptive - Efficient Measures Calculated Based on Unit Per lamp, horsepower, watts reduced, ton, etc. Lighting HVAC Refrigeration Motors VSDs Compressed Air Measures Transformers Case Study Prescriptive Bob Bay & Sons Carnival Foods Industry Grocery Measures implemented Refrigeration Case Doors, LED Lighting, Lighting Retrofit Total project cost $117,145 Projected annual energy savings 459,170 kwh Incentives paid $30,425 Payback period without AEP Ohio incentive Approximately 3.9 years Payback period with AEP Ohio incentive Approximately 2.9 years Program Type Prescriptive 2

3 What is a Custom Measure? Energy Savings Measure NOT found on Prescriptive list or in other programs Recent Paid Custom Examples 3

4 New Construction/Major Renovation: Three Paths New Construction/Major Renovation: Whole Building Design team incentives $0.02 to $0.04/kWh Based on 10% efficiency over ASHRAE Owner incentives $0.08 to $0.12/kWh Based on 10% efficiency over ASHRAE standard 4

5 Case Study- Reynoldsburg Schools EXPRESS PROGRAM OVERVIEW The Express Program help s small businesses: Improve their work environment Reduce waste and save money every month Install new equipment with little upfront cost and little disruption to their business operation. Available to customers with annual energy consumption of 200,00 KWh and less 5

6 PROGRAM DETAILS A FREE energy audit to identify potential energy- saving opportunities A proposal that includes a list of recommendations and estimates of energy savings, project cost and payback period Incentives paid directly to the contractor, up to 80% of the project cost Installation of approved energysaving equipment Post-installation inspections to assure quality and to verify energy savings 12 month interest-free financing is available to quailed customers Self Direct Program (Retroactive) Available to largest energy users 700,000 kwh+ annually Part of National Account (multiple locations in one or more states) For installations completed after January 1, 2011 (3 year look back) Requires both AEP Ohio and PUCO approval every application is a filing with PUCO for 60 days Choice of Incentives paid at 75 percent or exemption from EE/PDR rider Many times money is used to fund future energy efficiency projects 6

7 What is Retrocommisioning? Tuning up buildings existing systems to bring them back into an efficient state of operation Generally includes O&M improvements, not large capital expenditures For Example: RCx does not replace your chiller. It ensures that the existing chiller is operating efficiently Some Typical RCx measures Controls upgrades Demand control ventilation Automatic building scheduling and setbacks Chilled water temperature reset RCx Benefits RCx in buildings has a number of benefits Reduce energy costs Typical cost savings range from 5% to 15% annually O&M improvements can extend building systems equipment life Building occupants and visitors are more comfortable and work more productively RCx solves many of the common complaints (i.e. too hot/cold) 7

8 The Evolution of Continuous Improvement Safety Today Quality Lean Six Sigma Energy Environmental CEI CEI applies the business management principles of continuous improvement and employee engagement to plant-wide energy efficiency focusing on low/no-cost energy saving opportunities. CEI Integrates with and enhances existing continuous improvement programs. Key Program Elements Company Infrastructure/Employee Engagement Executive sponsor, energy champion, energy team, energy policy Performance Measurement Baseline energy model using linear regression, energy savings tracking comparing actual vs. predicted energy use = CUSUM savings Energy Savings Improvement Processes Tools, techniques and practices to identify and implement low/no-cost energy saving activities Technical and Implementation Support CEI energy coach, technical experts in industrial systems Group (Cohort) Structure Workshops Encouragement, accountability, share best practices 8

9 Participant Benefits Yearly kwh Low/No-Cost Savings: Target: 5%, Exceptional: 10% to 15% yearly energy savings Savings and incentive dollars go directly to the bottom line Goodwill with customers, community, and employees Principles /momentum leads to additional energy and utility savings: gas, water, steam, etc. Non-energy benefits Energy use profile provides an additional process monitoring perspective Synergy with all improvements : cost savings, quality, productivity, reliability Participation and Savings Currently 36 large industrial companies across Ohio are engaged in CEI Total combined electrical energy usage just under 1,000 GWh/year Program savings goal = 50+ million kwh/year from low/no-cost initiatives Program savings to date = 21,261,000 kwh Current projection of savings by 12/31/2014 = 57,600,000 Example : Low/No-Cost Savings LOW/NO COST OPPORTUNITIES Savings/Year Electricity Savings (kwh) Other Utility Savings/Year Chilled Water / Cooling Tower $ 188,900 3,148,333 Gas & Steam $ 213,400 Ammonia Refrigeration 83,000 $ 1,300,000 n/a n/a $ 825,000 n/a n/a Compressed Air System Improvements 50,000 $ 500,000 Steam 30,000 Room temperature modification 30,000 $ Lighting Improvements 23,000 $ 387,000 n/a n/a Process Equipment Shut Down - Empty Conveyors, Other 12,000 $ 200,000 n/a n/a Storage Tank - Raise Temperature - $10k/degree 20,000 $ 325,000 n/a n/a $ n/a Steam 126,000 Steam leaks and steam trap - $ TOTAL 406,900 $ $ 6,685, , % % Savings CEI Incentive $0.02/kWh for 3 yrs 133,707 ADDITIONAL OPPORTUNITIES Savings/Year Electricity Savings Other Utility Savings/Year Reduce CIP's (6 per month) $ - n/a Steam, Water $ 111,360 Auto computer shutdown (front office & production) TBD TBD n/a n/a CIP Process Improvements TBD TBD TBD TBD Water Overflow - Main Processing n/a TBD TBD - $ Ideas identified during CEI Kaizen/Energy Scan Event at Participant X s Site 9

10 Program Overview Data centers are up to 200x more energy intensive than typical work environments Energy-efficient technologies provide a wealth of opportunities for smart data center improvements The AEP Ohio Data Center Program provides incentives for energy-efficient data center projects Incentives are performance-based: greater rewards for greater energy savings Supports the AEP Business Development Initiative for Data Centers Eligible Projects Eligible projects include: Covers new equipment and existing data centers 10

11 AEP Ohio Examples Summary AEP Ohio is available to advise on best energy efficiency practices for new and existing businesses Business development opportunities that have incorporated energy efficiency include: New bottling business in existing building New production line in existing bakery New HQ building and relocation of Data Center Thank You Tim Wells, CEcD Manager, Economic & Business Development