Fiscal Year 2014 (FY2014) Annual Report Funding Administered by the Maryland Energy Administration Program Administered by BGE MEA Contact: BGE Contacts: Jenn Gallicchio Jenn.Gallicchio@maryland.gov (410) 260-7655 Jeff Jerome Jeffrey.Jerome@constellation.com (410) 470-0706 Introduction and Summary MEA proposed the Small Business Energy Advance (SBEA) program as part of its portfolio of programs recommended for Exelon-Constellation merger Customer Investment Fund (CIF) proceeds. SBEA is a BGE-administered program that offers small commercial electricity customers an option to receive an Energy Advance for net-rebate costs of energy conservation measures (ECMs) implemented as part of Small Business Energy Solutions (SBES). The Commission approved $2.5 million for SBEA to be used for administering the SBEA program and to provide Energy Advances for customers. MEA received a funding appropriation for SBEA to be evenly split between fiscal year 2014 (FY2014) and fiscal year 2015 (FY2015). In March 2014, MEA and BGE executed an agreement to address the transfer of the SBEA funds from MEA to BGE and to delineate responsibilities between them. The program was fully operational throughout FY2015. Program Participation and Impact Highlights MEA s appropriation from the CIF for the SBEA program became available in July 2013. The final agreement between MEA and BGE was executed in March 2014 and funds were disbursed from MEA to BGE shortly thereafter. The program launched to participants during the first quarter of fiscal year 2015 (FY2015). There were 443 small businesses that participated in the SBEA program in FY2015. One-quarter (25%) of BGE s Small Business Energy Solutions (SBES) program participation and 38% of the total energy savings in the SBES program can be attributed to the SBEA. This is a very significant uptick in participation and savings. The presence of the SBEA leads to more per-project savings. BGE reports that lighting projects receiving the SBEA save an average of 29,299 kwh, whereas lighting projects that do not receive the SBEA advance save an average of 14,851 kwh. This is an increase of 97%. Refrigeration projects saw a 6% increase in savings. Program-to-Date Results As of June 30, 2015, there were 443 SBEA participants. The program saved 12.2 million kwh and 2,678 kw of energy demand. The SBEA program is achieving its stated goal of 1
enhancing participation in BGE s Small Business Energy Solutions program. Program energy savings began to increase significantly within 60 days of SBEA implementation and has been noticeably higher ever since its implementation. BGE also reports that there was a notable increase in the average job size, energy savings, and incentive amounts associated with the introduction of the SBEA, as described above. A complete set of reporting templates for SBEA are included in the appendices. Program Costs As of June 30, 2015, BGE spent $1,173,993 for the SBEA program, which is 47% of the total awarded funds. BGE also spent $300,000 in administrative funds. $1,143,993 $300,000 Administrative Indirect Costs Marketing Evaluation Customer Benefit Program Specifics The program launched in FY2015, so this is the first reporting period where there is participation, energy savings, or expenditures. In the previous reporting period, expenditures were funds distributed from MEA to BGE, but did not represent any completed jobs. The SBEA program performed slightly above BGE s internal forecasts in every area, however its impact on the overall Small Business Energy Solutions (SBES) Program sales was actually greater than expected. BGE suggests that the concept of the Energy Advance is very attractive to small business customers who are cash limited and its availability has removed the major barrier to SBES participation - lack of capital. The SBES Program produced over 13,700 MWh (Net Wholesale) in annualized savings in the first half of 2015, which was a 30% increase over the 10,500 MWh annualized savings achieved in the first half of 2014. The program achieved 142% of its forecasted first half energy savings. All of the existing SBES hardcopy and electronic marketing materials have been modified to include the SBEA program as an integral feature of the program. Because it is an integral feature, it is not referred to by the name SBEA. Instead, it is listed as a new benefit of 2
the SBES program that requires no upfront cash and spreads the customer payments over a 12 month period. BGE believes that much of this increase in annualized savings is attributable to SBEA. Looking into the next fiscal year, BGE requested PSC approval to transition SBEA from CIF to EmPOWER in FY2016. That will result in an even more robust program. See BGE s latest EmPOWER semi-annual report filed in PSC Case No. 9154 for more details. Enhancements In 2015, the SBEA program dropped one contractor and added two new contractors. There are now four lighting contractors and one refrigeration contractor. BGE requested to PSC approval to continue the SBEA program, using EmPOWER funds once the CIF funds are depleted. 3
Appendices Appendix A: Annual Program Overview Appendix B: BGE Incremental Savings Table Appendix C: Measure Breakdown Appendix D: Program Costs Appendix E: Notes and Assumptions 4
Fiscal Year 2015 (FY2015) Appendix A: Annual Program Overview Exelon Customer Investment Fund- Annual Program Overview Project Name Small Business Energy Advance Awardee Main Contact Name Contact Information Date Reporting Period July 1, 2014 to June 30, 2015 Project Status Implemented Forecasted Reported Verified Program Progress Number of Small Businesses 443 Average Investment Per Small Business $2,588 Electric Savings Annualized Energy Savings (kwh) 12,274,488 Coincident Peak Demand Savings (kw) 2,678 Lifecycle Energy Savings (kwh) 146,122,612 Other Energy Savings Annualized Therm Savings na Annualized BTU Savings na Participants Receiving Consumer Education Participants Referred to EmPOWER Maryland Programs Program Costs Total Funds Spent During Reporting Period $1,173,993 Total Administrative Funds Spent During Reporting Period $300,000 Percentage of Total Awarded Funds Expended 47% Highlight of Lessons Learned Challenges Successes 5
Fiscal Year 2015 (FY2015) Appendix B: BGE Incremental Savings Table Exelon Customer Investment Fund- BGE Incremental Savings Project Name Small Business Energy Advance Awardee Date Reporting Period July 1, 2014 to June 30, 2015 BGE EmPOWER Program Incremental Savings Total Number of Small Businesses 1,328 443 1,771 Annualized Energy Savings (kwh) 20,054,512 12,274,488 32,329,000 Coincident Peak Demand Savings (kw) 4,302 2,678 6,980 Annualized Therm Savings na na na 6
Fiscal Year 2015 (FY2015) Appendix C: Measure Breakdown Exelon Customer Investment Fund- Measure Breakdown Project Name SBES SBEA Awardee Date Reporting Period July 1, 2014 to June 30, 2015 Program Details Total Measures Offered Total Measures Received/Installed Percentage of Small Businesses Accepting Measures Measures Installed 58,076 20,698 36% Lighting and Controls 55,268 18,458 33% T8 Lamps and Ballasts 29,988 11,626 39% Hard-Wired CFLs Screw-In CFLs 3,516 719 20% Screw-In LEDs 9,017 2,478 27% LED Exit Signs 1,434 541 38% LED Exterior 9,762 2,662 27% Lighting Controls 1,551 432 28% Electric Water Heating Upgrades Pre-Rinse Spray Valves Hot Water Pipe Insulation Tank Wraps Low-Flow Aerators Refrigeration Controls 2,808 2,240 80% Electronically Commutated Motors 947 777 82% LED Cooler Lights 1,595 1,242 78% Evaporator/Compressor Controls 266 221 83% Vending Machine Controls Energy Advance Details Total Energy Advances 443 Average Energy Advance Amount $2,588 Defaults 7
Fiscal Year 2015 (FY2015) Appendix D: Program Costs Exelon Customer Investment Fund- Costs Project Name Small Business Energy Advance Awardee Date Reporting Period July 1, 2014 to June 30, 2015 Forecasted Reported Verified Administrative $300,000 Indirect Costs Marketing Evaluation Customer Benefit $1,143,993 Subtotal $1,443,993 Leveraged Outside Funds Total Spending $1,443,993 8
Fiscal Year 2015 (FY2015) Appendix E: Notes and Assumptions a) Define what constitutes a participant and measure b) Factors used to calculate energy savings and demand reduction c) Calculation used to determine Lifecycle Savings with an example d) Include any additional assumption used to comprise the filing A SBEA participant is an SBES customer who opts-in to the SBEA program by filling out an additional form at the time of sale. All of the measures installed on a contract where SBEA is selected are considered SBEA measures. As mentioned, SBEA is simply another payment option for SBES customers. As such, all of the items in question 3 (above) are calculated in the same way that they would be for the overall SBES program. 9