APSC FILED Time: 4/1/2014 1:00:19 PM: Recvd 4/1/ :52:33 PM: Docket tf-Doc. 196

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1 April 1,2014 Arkansas Public Service Commission 1000 Center Street POBox 400 Little Rock, AR Re: Docket No TF Empire District Electric Company Annual Report on Conservation and Energy Efficiency Programs Please find attached Empire District Electric Company's Annual Report for the Quick Start Energy Programs for the year This annual report is being filed pursuant to the provisions of Section 9 ofthe Commission's Rules for Conservation and Energy Efficiency Programs approved in Docket No R. If you have any questions relative to this matter, please do not hesitate to contact me. Sincerely, Todd W. Tarter Enclosures EMPIRE DISTRICT. 602 S JOPLIN AVENUE. POST OFFICE BOX 127 JOPLIN, MISSOURI wwwempiredlstrict.com

2 THE EMPIRE DISTRICT ELECTRIC COMPANY ENERGY EFFICIENCY ANNUAL REPORT Filed April 1, EXECUTIVE SUMMARY 1.1 Brief historical background of the EE portfolio The Empire District Electric Company ( Empire or Company ) began its Quick Start Energy Efficiency ( EE ) portfolio in 2007 as directed by the Arkansas Public Service Commission s ( Commission or APSC ) Rules for Conservation and Energy Efficiency Programs approved in Order No. 18 of Docket No R. This initial portfolio consisted of participation in the two state-wide programs, Energy Efficiency Arkansas ( EEA ) and the Arkansas Weatherization Program ( AWP ). Empire also implemented a Central Air Conditioner ( CAC ) Tune-up rebate program and Commercial & Industrial ( C&I ) Prescriptive rebates program. In 2010, the Commission approved the addition of a high efficiency central air conditioner replacement component to the existing CAC tune-up rebate program, along with a rebate for a programmable thermostat. The Commission also approved the Interruptible program, a voluntary curtailment program for large commercial and industrial customers. In the spring of 2011, Empire filed for approval of a High-efficiency Lighting program and a Home Energy Comparison Program to supplement its portfolio. However, in July 2011 the Commission requested Empire re-file its portfolio to incorporate data for the 2012 and 2013 program years. During this time Empire, with the help of its demand-side consultant Applied Energy Group (AEG), decided to completely overhaul the existing portfolio in an attempt to increase customer participation and overall savings levels. As a result of the Commission s order and Empire s new portfolio expansion, primary focus was dedicated to the new portfolio and the September 2011 filing deadline. The new portfolio was filed in September The new portfolio became active January 1, It excluded the AC tune-up program, and added a Residential Lighting Program, C&I Custom program, Energy Star Appliance program, and Small Business Lighting program. On December 28, 2012, Empire made a filing with the APSC that would add two new programs: Residential AC Tune-up and Duct Repair and an independent, contractor-driven Residential Weatherization. These programs leverage the design and contractors of a similar program designed and successfully implemented by Oklahoma Gas & Electric ( OG&E ). The new programs are funded using reappropriated budgets from underperforming programs in Empire s Arkansas EE portfolio. This annual report provides the results of the portfolio for the 2013 program year. Table Portfolio Summary Net Energy Savings Cost Cost-Benefits Demand MW Energy MWh Actual Expenses LCFC Performance Incentives TRC Net Benefits TRC Ratio $ 114,632 $ - - $ The Empire District Electric Co. 1

3 Table 1.2 EE Portfolio Cost by Program 2013 % of Budget Actual Budget Program Name Target Sector Program Type ($) ($) AC Tune-up and Duct Sealing Residential Whole Home 9,488 1,751 18% High-efficiency Residential Lighting (CFL) Residential Consumer Product Rebate 7,944 9, % Residential Weatherization Program (OG&E) Residential Whole Home 39,715 35,313 89% School-Based Energy Education Residential Consumer Product Rebate 42,698 32,957 77% Energy Star Appliance Res/Small Business Consumer Product Rebate 10,480 2,942 28% High-efficiency HVAC Res/Small Business Consumer Product Rebate 24,230 5,034 21% C&I Audit Commercial & Industrial Audit - C&I 3,251 1,483 46% Commercial and Industrial (Custom) Commercial & Industrial Custom 94,410 2,394 3% Commercial and Industrial (Prescriptive) Commercial & Industrial Prescriptive/Standard Offer 126,245 4,577 4% Small Business Lighting Small Business/C&I Other 49,825 1,483 3% Online Audit and Energy Calculator All Classes Behavior/Education 2,000 2, % Arkansas Weatherization Program Residential Whole Home 6,750 3,606 53% Energy Efficiency Arkansas All Classes Behavior/Education 2,000 2, % Regulatory ,000 8,468 28% Total 449, ,632 26% Table 1.3 EE Portfolio Summary by Cost Type EE Program Cost Summary 2013 Total Cost % of Budget Actual % of Cost Type Total ($) ($) Total Planning / Design 0% - - 0% Marketing & Delivery 24% 108,678 16,908 15% Incentives / Direct Install Costs 61% 272,563 69,714 61% EM&V 3% 13,283 19,275 17% Administration 5% 24, % Regulatory 7% 30,000 8,468 7% 100% 449, , % Regulatory 7% Administration 0% Marketing & Delivery 15% Planning / Design 0% EM&V 17% Incentives / Direct Install Costs 61% The Empire District Electric Co. 2

4 Table 1.4 Company Statistics Revenue and Expenses Budget Actual Energy Plan Evaluated Program % of % of Portfolio % of Portfolio % of Year Total Annual Net Annual Energy Net Annual Energy Total Revenue Budget Revenue Spending Revenue Energy Sales Savings Sales Savings Sales (a) (b) (c) (d) (e) (f) ($000's) ($000's) (%=b/a) ($000's) (%=b/a) (MWh) (MWh) (%=b/a) (MWh) (%=b/a) 2009 $ 11,201 $ % $ % 137, % 1 0.0% 2010 $ 12,258 $ % $ % 155, % 8 0.0% 2011 $ 13,200 $ % $ % 154, % 3 0.0% 2012 $ 12,719 $ % $ % 153, % % 2013 $ 12,196 $ % $ % 152,396 1, % % $ $400 $300 $200 $100 $ Net Annual Savings (f) Portfolio Spending (c) Portfolio Budget (b) 1.2 Major Accomplishments and Milestones Reached Empire s portfolio achieved an estimated annual energy savings of 177,384 kwh. This represents slightly more than 16 percent of Empire s planned energy savings. However, this represents an improvement of more than 17 percent over 2012 s total estimated kwh saved (151,111). Empire s annual estimated demand savings of 50 kw represents an improvement of more than 138% over the total from 2012 (21 kw). Empire achieved these improvements despite changes in deemed savings and net-to-gross estimates that were adopted in the Technical Resource Manual Version 3.0 ( TRM v3.0 ) that reduced the savings-per-measure estimates of some of the best-performing programs in the portfolio. Empire continues to utilize partnerships reported in the 2012 program year with agencies such as the Arkansas Industrial Energy Clearinghouse and Arkansas Energy Office. Empire has also developed stronger working relationships with trade allies in its service territory such as lighting vendors and HVAC contractors. Empire has also continued to foster its working partnership with OG&E for the two new programs discussed Section 1.1. Empire feels that these partnerships have played a role in the continuously improving savings of the portfolio. 1.3 Goals and Objectives for EE portfolio In its initial portfolio filing, Empire planned for annual estimated energy savings of 1,170,316 kwh and for annual estimated demand savings of 282 kw. As Arkansas s Independent Evaluation Monitor ( IEM ) reported in her Annual Summary Report on Evaluation, Measurement & Verification Findings for 2013, it is unlikely that Empire s program portfolio will ever reach its participation goals due to the challenges it faces in its service territory 1. 1 APSC Docket TF, Doc Filed June 3, 2013 The Empire District Electric Co. 3

5 1.4 Progress achieved versus goals and objectives Empire fell short of its goals, but for the second year in a row, showed significant improvement. Empire s demand savings of 50 MW was nearly 18 percent of goal, and its energy savings of 177,384 kwh represents slightly more than 16 percent of its goal. It s worth noting that goals for savings come from deemed savings values for Compact Fluorescent Light bulbs ( CFL s ) and high-efficiency shower heads used in Empire s initial portfolio filing, which were based on a previous version of the TRM. The changes in TRM v3.0 reduced the post-em&v net energy and demand savings significantly for the School-based Energy Education and Residential High-efficiency Lighting programs, the most successful programs in Empire s portfolio. The per-measure deemed net savings values for the EnergyWise kits distributed through the Schoolbased Energy Education program changed from 292 kwh per kit (a total of 103,992 kwh saved from 355 kits distributed) in the 2012 EM&V to kwh per kit (a total of 95,761 kwh saved from 650 kits distributed) in the 2013 EM&V. Accordingly, the program achieved less than 50% of its net energy savings goal of 191,835 kwh, despite reaching 93% of its target of 700 participants. Empire distributed nearly twice as many school kits as it did in 2012 which actually included an extra CFL in 2013 and achieved a verified net energy savings of 8,231 fewer kwh. The per-measure verified net savings values for the CFL s distributed through the Residential Highefficiency Lighting program changed from 21.5 kwh per bulb (a total of 38,762 kwh saved based on 1,804 bulbs distributed) in the 2012 EM&V to 16.2 kwh per bulb (a total of 27,806 kwh saved based on 1,720 bulbs distributed) in the 2013 EM&V. The program achieved a verified net energy savings of 27,806 kwh, or slightly more than 50% of its goal of 53,870 kwh, despite distributing 119% of its targeted number of CFL s High-level recap of portfolio savings, participation levels, prior year comparisons, trends, etc. As reported in the 2012 Annual Report, Empire achieved exceptional kwh savings for its EE portfolio in 2012 as compared to previous years. This trend continued into Empire achieved verified net energy savings of 177,384 kwh in 2013, compared to 151,111 kwh in 2012 (a 17 percent improvement) and 2,825 kwh in 2011 (a 6,000 percent improvement). Empire achieved verified net demand savings of 50 kw in 2013, compared to 21 kw in 2012 (a 138 percent improvement) and 1 kw in 2011 (a 5,000 percent improvement). Empire spent a higher percentage of its total portfolio budget (26 percent) in 2013 compared to 2012 (16 percent). Only 7% of the 2013 expenditures was tied to regulatory costs ($8,468 of $114,632), compared to 44% in 2012 ($24,817 of $56,406) and 93% in 2011 ($67,883 of $73,125). More than 1,100 customers participated in eight of its 13 programs in 2013 compared to about 800 customers participating in just three of 11 programs in Empire continues to see success in programs that do not require a financial investment from the customer. The success seen in the last two years has come about after Empire decided to focus more of its portfolio design and implementation efforts on this type of programs. 2 Savings-per-measure relative to goal may have also been affected slightly by the change in delivery method from retailer coupon to direct mail, which limited bulbs distributed to exclusively 13-watt CFLs. However, the program was administered identically in 2012 as 2013, so year-to-year comparisons are valid. The Empire District Electric Co. 4

6 1.6 Highlights of well-performing programs This year, Empire achieved customer participation in most of its program offerings. Eight of its 13 programs experienced participation by at least one customer. Participation was moderate relative to goals for most of these programs. For the second consecutive year the two programs with the highest participation rates were the Residential High-efficiency Lighting program and the School-based Energy Education program. The Residential High-efficiency Lighting program distributed 4-packs of CFL s to every customer who expressed interest by returning a pre-paid postcard included with their bills. In all, 1,720 CFL s were distributed through the program in This exceeded Empire s goal of 1,440 CFL s by 280 bulbs, or nearly 20 percent. This resulted in an estimated annual energy savings of 27,806 kwh and an estimated annual demand savings of 6 kw. The School-based Energy Education program distributed EnergyWise kits featuring 2 CFL s, a highefficiency showerhead, a kitchen sink aerator, a central air conditioner filter alarm, an LED nightlight, and several other educational materials to sixth and eighth graders at public schools in Empire s service territory. In all, 650 school kits were distributed. This achieved 93 percent of Empire s goal of 700 kits. This program was responsible for an estimated annual energy savings of 95,761 kwh and an estimated annual demand savings of 24 kw. Participation in 2014 should return to something closer to 2012 levels because Empire will only distribute kits to sixth graders since older classes will have already participated in earlier years of the program. Empire also experienced notable participation in one of its new programs for 2013: The Residential Weatherization Program. This program, which leverages implementation, contractors, and design from a similar program offered by OG&E, made 55 different improvements to 15 homes in This is made even more notable since this program only began its implementation phase in the fourth quarter of What s working and what s not Empire continues to experience participation mainly in programs that offer free goods and services. There have been small upward trends in programs that require a cash outlay, and Empire continues to increase its efforts to market and raise awareness of these programs. However, again citing the comments of the IEM, it is unlikely that Empire s program portfolio will ever reach its participation goals due to the challenges it faces in its service territory Planned changes to programs or budgets Empire changed its EE program budgets to accommodate the two new programs rolled out in 2013 by reallocating funds from the High-efficiency HVAC and Small Business Lighting programs, both of which 3 APSC Docket TF, Doc Filed June 3, 2013 The Empire District Electric Co. 5

7 suffered from low participation. The budgets presented in this Annual Report reflect these changes. The original budgets, prior to the addition of two new programs, can be found in its portfolio filing 4. Empire plans to keep the budgets the same for 2014 as they were in Estimation of EE Resource Potential Empire has not conducted a Potential Study solely for its Arkansas service territory. In 2013, it did perform demand-side resource analysis for its Missouri integrated resource plan. This study is discussed in Empire s 2013 Integrated Resource Plan Training Achievements Empire offered three training sessions for HVAC professionals throughout its entire service territory which were made available to Arkansas contractors. It provided two one-day training sessions for Load Calculation using the Air Conditioning Contractors of America s Manual J. The sessions were held in Joplin, Missouri and Republic, Missouri. Although invitation letters were sent to multiple HVAC contractors in Arkansas, none attended. Empire also offered a kick-off training session for its new Residential AC Tune-up and Duct Repair program. This meeting was held as a lunch-and-learn with presentations by personnel from OG&E and Williams Energy Efficiency. More than 40 contractors were invited to this event, and representatives from one business attended. This contractor is now ready and mobilized to begin performing tune-ups in Empire s service territory. Empire will likely host additional training sessions of this type in Empire made the following appearances in its Arkansas communities in 2013 to promote the energy efficiency programs: August 16, 2013 Bentonville County Fair November 20, 2013 Decatur City Hall (HVAC Training) 2.0 Portfolio Programs 2.1 High-efficiency HVAC Program Description Residential and small business (<40 kw per year) customers receive rebates to purchase and install central air conditioners, heat pumps, room air conditioners, and programmable thermostats. Contractors will receive free training on proper sizing and installation 6. 4 APSC Docket TF, Doc Filed September 30, Filed with the Missouri Public Service Commission ( MPSC ) in Case No. EO on July 1, APSC Docket TF, Doc Filed September 30, The Empire District Electric Co. 6

8 2.1.2 Program Highlights This program featured more participation in 2013 than ever before. o Three participants o Estimated annual demand savings of 1 kw. o Estimated annual energy savings of 4,942 kwh o Expenditures of $5,034, or 21% of budget Program Budget, Savings & Participants. High-efficiency HVAC Cost Energy Savings (kwh) Demand Savings (kw) Participants Program Budget Actual % Plan Evaluated % Plan Evaluated % Plan Actual % Program Year 2011 $ 3,279 $ 1,015 31% 7, % 9 0 2% % Program Year 2012 $ 17,212 $ 286 2% 18, % 9 0 0% % Program Year 2013 $ 24,230 $ 5,034 21% 33,285 4,942 15% % % $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $- Program Year 2011 Program Year 2012 Program Year ,000 5,000 4,000 3,000 2,000 1,000 0 Energy Savings ( kwh) Budget Actual Description of Participants A participant in this program is defined as an individual customer to whom a rebate is paid for a replacement of a central air conditioning system or heat pump Challenges & Opportunities As Empire described at length in its response to Commission Order No. 40 in APSC Docket No TF 7, there are various challenges to successful implementation of energy efficiency programs in its Arkansas service territory. Chief among these are Empire s largely-residential customer count, a disproportionately large amount of its sales coming from two large industrial customers, and various demographic features of its service territory. This concern was echoed by the IEM in her 2013 EM&V Report 8. As previously mentioned, Empire has experienced little success with programs requiring a financial investment on the part of the customer. However, Empire continues to offer this program to interested customers and cross-markets it in promotions of other energy efficiency programs in Arkansas. The improved results, while small, hopefully indicates an upward trend Planned or proposed Changes to Program & Budget 7 APSC Docket No TF, Doc Filed September 14, APSC Docket TF, Doc Filed June 3, 2013 The Empire District Electric Co. 7

9 Empire made small changes to the budget for this program to create the budget for its two new programs (Residential Weatherization and AC Tune-up and Duct Repair). These changes were approved on February 11, No further changes are planned for Energy Efficiency Arkansas Program Description This program provides education to residential customers and technical training to contractors and business customers Program Highlights Empire is pleased to cooperate with the Arkansas Energy Office on this program. This program is a statewide education and awareness campaign and does not produce a measureable demand or energy savings Program Budget, Savings, & Participants Energy Efficiency Arkansas Cost Energy Savings (kwh) Demand Savings (kw) Participants Program Budget Actual % Plan Evaluated % Plan Evaluated % Plan Actual % Program Year 2011 $ 1,696 $ 1,086 64% Program Year 2012 $ 1,787 $ 1,507 84% Program Year 2013 $ 2,000 $ 2, % N/A 0 - N/A N/A - N/A N/A - $3,000 $2,500 $2,000 $1,500 $1,000 $500 $- Program Year 2011 Program Year 2012 Program Year Energy Savings ( kwh) Budget Actual Description of Participants This program is a statewide education and awareness program and does not measure participation Challenges & Opportunities Empire does not implement any of these programs, and thus, does not face any challenges Planned or Proposed Changes to Program & Budget 2012 was the first year in which Empire s portfolio saw enough participation to necessitate engaging a contractor to conduct Evaluation, Measurement & Verification ( EM&V ). The EM&V of the 2012 program year occurred in 2013, and was charged to the 2013 energy efficiency budget. Empire opted to divide the costs of the EM&V evenly over each of its 13 programs. Due to its small service territory and relatively low customer participation, it is difficult to effectively conduct EM&V compliant with the 9 APSC Docket No TF, Doc Filed February 11, APSC Docket TF, Doc Filed September 30, The Empire District Electric Co. 8

10 protocols of the state of Arkansas and keep the total percentage of portfolio expenditures allotted to EM&V within in the recommended range of 3%-6%. 2.3 Small Business Lighting Program Description Empire pays 50% of the total project costs to purchase and install efficient lighting for small commercial customers (those whose demand over a twelve-month period is less than 40 kw ) Program Highlights This program saw no participation in The only cost it incurred for 2013 was an allocated portion of total EM&V costs Program Budget, Savings & Participants Small Business Lighting Cost Energy Savings (kwh) Demand Savings (kw) Participants Program Budget Actual % Plan Evaluated % Plan Evaluated % Plan Actual % Program Year 2011 $ - $ Program Year 2012 $ 68,796 $ - 0% 83, % % % Program Year 2013 $ 49,825 $ 1,483 3% 60, % % % $80,000 $60,000 $40,000 $20,000 $- Program Year 2011 Program Year 2012 Program Year Energy Savings ( kwh) Budget Actual Description of Participants A participant in this program is defined as a single customer to whom an incentive was provided. However, there were none in Challenges & Opportunities As in 2011 and 2012, the largest hurdles to this program have been an inability to solicit customer interest and difficulty in finding a cost-effective third-party contractor to implement the program on Empire s behalf in such a small and rural area Planned or Proposed Changes to Program & Budget Empire made small changes to the budget for this program to create the budget for its two new programs. These changes were approved by the Commission on February 11, No further changes are planned for Commercial and Industrial (Prescriptive) 11 APSC Docket TF, Doc Filed September 30, APSC Docket No TF, Doc Filed February 11, The Empire District Electric Co. 9

11 2.4.1 Program Description C&I customers receive rebates for the installation, replacement or retrofit of qualifying electric savings measures Program Highlights While still short of the program goals, 2013 was the most successful year for this program since its inception. Empire issued one rebate to a customer for a lighting retrofit with an estimated annual energy savings of 21,218 kwh and an estimated annual demand savings of 7 kw. It is hopeful that a new trade ally relationship established in late 2013 could produce additional participation in Empire s Commercial and Industrial programs in Program Budget, Savings & Participants Commercial and Industrial (Prescriptive) Cost Energy Savings (kwh) Demand Savings (kw) Participants Program Budget Actual % Plan Evaluated % Plan Evaluated % Plan Actual % Program Year 2011 $ 6,215 $ 2,448 39% 23,509 2,595 11% % % Program Year 2012 $ 99,355 $ 360 0% 336, % % % Program Year 2013 $ 126,245 $ 4,577 4% 481,262 21,218 4% % % $150,000 $100,000 $50,000 $- Program Year 2011 Program Year 2012 Program Year ,000 20,000 15,000 10,000 5,000 0 Energy Savings ( kwh) Budget Actual Description of Participants Differing from prior annual reports, Empire defines a participant for this program as a qualifying measure Challenges & Opportunities As Empire described at length in its response to Commission Order No. 40 in APSC Docket No TF 14, there are various challenges to successful implementation of energy efficiency programs in its Arkansas service territory. Chief among these are Empire s largely-residential customer count, a disproportionately large amount of its sales coming from two large industrial customers, and various demographic features of its service territory. This concern was echoed by the IEM in her 2013 EM&V Report 15. As previously mentioned, Empire has experienced little success with programs requiring a financial investment on the part of the customer. However, Empire continues to offer this program to 13 APSC Docket TF, Doc Filed September 30, APSC Docket No TF, Doc Filed September 14, APSC Docket TF, Doc Filed June 3, 2013 The Empire District Electric Co. 10

12 interested customers and cross-markets it in promotions of other energy efficiency programs in Arkansas. The improved results, while small, hopefully indicates an upward trend Planned or Proposed Changes to Program & Budget Empire does not plan any changes to this program s budgets for the 2014 program year. 2.5 Arkansas Weatherization Program Program Description The Arkansas Weatherization Program is approved by the Arkansas Public Service Commission and is offered by Arkansas seven investor-owned energy utilities to residential customers residing in severely energy inefficient homes. Community action agencies and other service providers with many years of experience perform detailed energy audits and install United States Department of Energy-approved weatherization measures Program Highlights One home was weatherized, with an estimated annual energy savings of 3,240 kwh and an estimated annual demand savings of 360 Watts. Empire continued an ongoing effort to cooperate and communicate with Community Action Agencies to attempt to promote participation of Empire customers in this program Program Budget, Savings & Participants Arkansas Weatherization Program Cost Energy Savings (kwh) Demand Savings (kw) Participants Program Budget Actual % Plan Evaluated % Plan Evaluated % Plan Actual % Program Year 2011 $ 4,838 $ - 0% 14, % 1 0 0% 4 0 0% Program Year 2012 $ 5,500 $ 5,301 96% 760 8, % % % Program Year 2013 $ 6,750 $ 3,606 53% 950 3, % % % $8,000 $6,000 $4,000 $2,000 $- Program Year 2011 Program Year 2012 Program Year ,000 8,000 6,000 4,000 2,000 0 Energy Savings ( kwh) Budget Actual Description of Participants A participant is defined as an Empire District customer s home receiving weatherization services through this program Challenges & Opportunities Empire continued cooperation and communication with Community Action Agencies to promote participation by Empire customers and to meet Empire s goals. However, only one Empire home was weatherized in this program in Planned or Proposed Changes to Program & Budget Empire does not plan any changes to this program s budgets for the 2014 program year. The Empire District Electric Co. 11

13 2.6 Commercial and Industrial (Custom) Program Description C&I customers receive rebates for the installation or replacement of cost effective, efficient measures not included in the C&I prescriptive program Program Highlights This program had no participation in 2013 A relationship with a new trade ally was established Three projects requesting pre-approval in the fourth quarter of 2013 is a hopeful sign for this program in Program Budget, Savings & Participants Commercial and Industrial (Custom) Cost Energy Savings (kwh) Demand Savings (kw) Participants Program Budget Actual % Plan Evaluated % Plan Evaluated % Plan Actual % Program Year 2011 $ 5,215 $ - 0% 51, % 3 0 0% 1 0 0% Program Year 2012 $ 72,603 $ 360 0% 172, % % % Program Year 2013 $ 94,410 $ 2,394 3% 229, % % % $100,000 $80,000 $60,000 $40,000 $20,000 $- Program Year 2011 Program Year 2012 Program Year Energy Savings ( kwh) Budget Actual Description of Participants A participant for this program is defined as a single business receiving an incentive for installation of energy efficiency measure(s) Challenges & Opportunities As Empire described at length in its response to Commission Order No. 40 in APSC Docket No TF 17, there are various challenges to successful implementation of energy efficiency programs in its Arkansas service territory. Chief among these are Empire s largely-residential customer count, a disproportionately large amount of its sales coming from two large industrial customers, and various demographic features of its service territory. This concern was echoed by the IEM in her 2013 EM&V Report 18. As previously mentioned, Empire has experienced little success with programs requiring a financial investment on the part of the customer. However, Empire continues to offer this program to interested customers and cross-markets it in promotions of other energy efficiency programs in Arkansas. The improved results, while small, hopefully indicates an upward trend. 16 APSC Docket TF, Doc Filed September 30, APSC Docket No TF, Doc Filed September 14, APSC Docket TF, Doc Filed June 3, 2013 The Empire District Electric Co. 12

14 2.6.6 Planned or Proposed Changes to Program & Budget Empire does not plan any changes to this program s budgets for the 2014 program year. 2.7 High-efficiency Residential Lighting (CFL) Program Description Customers returning a pre-paid postcard included with their bills receive a free 4-pack of 13-watt CFLs which are mailed directly to their homes Program Highlights This program continues to be one of Empire s most popular and successful programs. The Residential High-efficiency Lighting program distributed 4-packs of CFL s to every customer who expressed interest by returning the pre-paid postcard included with their bills. In all, packs of CFL s, or 1,720 CFL s were distributed in This exceeded Empire s goal of 1,440 CFL s by 280 bulbs, or nearly 20 percent. These CFL s resulted in an estimated annual energy savings of 27,806 kwh and an estimated annual demand savings of 6 kw Program Budget, Savings & Participants High-efficiency Residential Lighting (CFL) Cost Energy Savings (kwh) Demand Savings (kw) Participants Program Budget Actual % Plan Evaluated % Plan Evaluated % Plan Actual % Program Year 2011 $ 985 $ - 0% 36, % 1 0 0% % Program Year 2012 $ 7,275 $ 7, % 39,281 38,762 99% % % Program Year 2013 $ 7,944 $ 9, % 53,870 27,806 52% % 1,440 1, % $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $- Program Year 2011 Program Year 2012 Program Year ,000 40,000 30,000 20,000 10,000 0 Energy Savings ( kwh) Budget Actual Description of Participants For the 2013 Annual Report, Empire has changed the description of a participant for this program from customer to CFL bulb. The rationale behind this was to create a measurement of performance that could provide a more direct comparison with the original portfolio Challenges & Opportunities One of the primary detriments to Empire achieving its savings goals for 2013 was the mid-stream change of deemed savings and net-to-gross values included in the TRM v3.0. While Empire does not wish to dispute these changes, it should be noted that these changes diminish comparability of program savings goals to achieved evaluated savings. The per-measure deemed net savings values for the CFL s decreased from 21.5 kwh per bulb in 2012 s EM&V to 16.2 kwh per bulb in 2013 s EM&V. The program The Empire District Electric Co. 13

15 achieved a verified net energy savings of 27,806 kwh, or slightly more than 50% of its goal of 53,870 kwh, despite distributing 119% of the targeted number of bulbs Planned or Proposed Changes to Program & Budget 2012 was the first year in which Empire s portfolio saw enough participation to necessitate engaging a contractor to conduct Evaluation, Measurement & Verification ( EM&V ). The EM&V of the 2012 program year occurred in 2013, and was charged to the 2013 energy efficiency budget. Empire opted to divide the costs of the EM&V evenly over each of its 13 programs. Due to its small service territory and relatively low customer participation, it is difficult to effectively conduct EM&V compliant with the protocols of the state of Arkansas and keep the total percentage of portfolio expenditures allotted to EM&V within in the recommended range of 3%-6%. 2.8 Energy Star Appliance Program Description Residential and small business (<40 kw per year) customers receive rebates to purchase qualified ENERGY STAR models of dish washers, dehumidifiers, refrigerators and smart power strips Program Highlights Empire issued incentives to 8 participants in this program in 2013 This is the first time that this program has received any participation since its inception The program produced an estimated annual energy savings of 54,501 kwh and an estimated annual demand savings of 9 kw Program Budget, Savings & Participants Energy Star Appliance Cost Energy Savings (kwh) Demand Savings (kw) Participants Program Budget Actual % Plan Evaluated % Plan Evaluated % Plan Actual % Program Year 2011 $ - $ Program Year 2012 $ 9,139 $ 143 2% 29, % 5 0 0% % Program Year 2013 $ 10,480 $ 2,942 28% 54, % 9 0 1% % $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $- Program Year 2011 Program Year 2012 Program Year Energy Savings ( kwh) Budget Actual Description of Participants 19 Savings-per-measure relative to goal may have also been affected slightly by the change in delivery method from direct mail to retailer coupon, which limited bulbs distributed to exclusively 13-watt CFLs. However, the program was administered identically in 2012 as 2013, so year-to-year comparisons are verified. 20 APSC Docket TF, Doc Filed September 30, The Empire District Electric Co. 14

16 A participant in this program is defined as a customer receiving an incentive for purchase and installation of a qualifying ENERGY STAR appliance Challenges & Opportunities As Empire described at length in its response to Commission Order No. 40 in APSC Docket No TF 21, there are various challenges to successful implementation of energy efficiency programs in its Arkansas service territory. Chief among these are Empire s largely-residential customer count, a disproportionately large amount of its sales coming from two large industrial customers, and various demographic features of its service territory. This concern was echoed by the IEM in her 2013 EM&V Report 22. As previously mentioned, Empire has experienced little success with programs requiring a financial investment on the part of the customer. However, Empire continues to offer this program to interested customers and cross-markets it in promotions of other energy efficiency programs in Arkansas. The improved results, while small, hopefully indicates an upward trend Planned or Proposed Changes to Program & Budget Empire does not plan any changes to this program s budgets for the 2014 program year. 2.9 Online Audit and Energy Calculator Program Description Customers may access energy efficiency information from a utility website Program Highlights This program continues to be a valuable tool for Empire s customers Program Budget, Savings & Participants Online Audit and Energy Calculator Cost Energy Savings (kwh) Demand Savings (kw) Participants Program Budget Actual % Plan Evaluated % Plan Evaluated % Plan Actual % Program Year 2011 $ 542 $ % Program Year 2012 $ 2,000 $ % Program Year 2013 $ 2,000 $ 2, % N/A N/A - N/A N/A - N/A N/A - $2,500 $2,000 $1,500 $1,000 $500 $- Program Year 2011 Program Year 2012 Program Year Energy Savings ( kwh) Budget Actual Description of Participants 21 APSC Docket No TF, Doc Filed September 14, APSC Docket TF, Doc Filed June 3, APSC Docket TF, Doc Filed September 30, The Empire District Electric Co. 15

17 The program is part of Empire s system-wide energy efficiency offerings and is accessible by customers throughout its four-state service area. Participation by Arkansas customers is not measured separately by this program Challenges & Opportunities Occasional technical challenges of this program are similar to any Web-based program of this type. Empire continues to attempt to increase awareness of this online tool. The accessibility of an online resource is always limited to those with the ability to access it Planned or Proposed Changes to Program & Budget 2012 was the first year in which Empire s portfolio saw enough participation to necessitate engaging a contractor to conduct Evaluation, Measurement & Verification ( EM&V ). The EM&V of the 2012 program year occurred in 2013, and was charged to the 2013 energy efficiency budget. Empire opted to divide the costs of the EM&V evenly over each of its 13 programs. Due to its small service territory and relatively low customer participation, it is difficult to effectively conduct EM&V compliant with the protocols of the state of Arkansas and keep the total percentage of portfolio expenditures allotted to EM&V within in the recommended range of 3%-6% School-Based Energy Education Program Description Empire provides educational kits with low-cost energy saving items and information to Middle school children Program Highlights The School-based Energy Education program distributed EnergyWise kits featuring 2 CFL s, a high-efficiency showerhead, a kitchen sink aerator, a central air conditioner filter alarm, an LED nightlight, and educational materials to public school sixth and eighth grade classes in Empire s Arkansas service territory. In all, 650 school kits were distributed. This achieved 93 percent of Empire s goal of 700 kits. This program was responsible for an estimate annual energy savings of 95,761 kwh and an estimated annual demand savings of 24 kw. This continues to be one of Empire s most successful programs Program Budget, Savings & Participants 24 APSC Docket TF, Doc Filed September 30, The Empire District Electric Co. 16

18 School-Based Energy Education Cost Energy Savings (kwh) Demand Savings (kw) Participants Program Budget Actual % Plan Evaluated % Plan Evaluated % Plan Actual % Program Year 2011 $ - $ Program Year 2012 $ 21,554 $ 14,821 69% 95, , % % % Program Year 2013 $ 42,698 $ 32,957 77% 191,835 95,761 50% % % $50,000 $40,000 $30,000 $20,000 $10,000 $- Program Year 2011 Program Year 2012 Program Year , ,000 80,000 60,000 40,000 20,000 0 Energy Savings ( kwh) Budget Actual Description of Participants A participant in this program is defined as a middle-school student receiving an EnergyWise kit Challenges & Opportunities Empire achieved a high-percentage of its goals for this program. Participation in 2014 should return to something closer to 2012 levels because Empire will only distribute kits to sixth graders since older classes will have already participated in earlier years of the program. These numbers were also tempered by the new deemed savings and net-to-gross values adopted in TRM v3.0. The mid-stream changes eliminate comparability of program savings goals to achieved evaluated savings as compared to the previous year. The per-measure deemed net savings values for the EnergyWise kits decreased from 292 kwh per kit in the 2012 EM&V to kwh per kit in the 2013 EM&V. The program achieved a verified net energy savings of 95,761 kwh, less than 50% of its goal of 191,835 kwh, despite having 650 of a targeted 700 participants (93%). In addition, the 2013 kits included an extra CFL compared to the 2012 kits. Empire distributed nearly twice as many school kits but was credited with 8,231 fewer kwh in verified net energy savings Planned or Proposed Changes to Program & Budget Participation in 2014 should return to something closer to 2012 levels because Empire will only distribute kits to sixth graders since older classes will have already participated in earlier years of the program C&I Audit Program Description Empire will cover up to 50% of the cost of the energy audit with a maximum rebate of $500 when C&I customers implement the recommended efficiency measures Program Highlights 25 APSC Docket TF, Doc Filed September 30, The Empire District Electric Co. 17

19 This program saw no participation in The only cost it incurred for 2013 was an allocated portion of total EM&V costs Program Budget, Savings & Participants C&I Audit Cost Energy Savings (kwh) Demand Savings (kw) Participants Program Budget Actual % Plan Evaluated % Plan Evaluated % Plan Actual % Program Year 2011 $ - $ Program Year 2012 $ 1,641 $ % % Program Year 2013 $ 3,251 $ 1,483 46% % $4,000 $3,000 $2,000 $1,000 $- Program Year 2011 Program Year 2012 Program Year Energy Savings ( kwh) Budget Actual Description of Participants A participant in this program would be defined as a single customer receiving an incentive. There was no participation in Challenges & Opportunities As Empire described at length in its response to Commission Order No. 40 in APSC Docket No TF 26, there are various challenges to successful implementation of energy efficiency programs in its Arkansas service territory. Chief among these are Empire s largely-residential customer count, a disproportionately large amount of its sales coming from two large industrial customers, and various demographic features of its service territory. This concern was echoed by the IEM in her 2013 EM&V Report 27. As previously mentioned, Empire has experienced little success with programs requiring a financial investment on the part of the customer. However, Empire continues to offer this program to interested customers and cross-markets it in promotions of other energy efficiency programs in Arkansas. The improved results, while small, hopefully indicates an upward trend Planned or Proposed Changes to Program & Budget Empire does not plan any changes to this program s budgets for the program year Residential Weatherization Program (based on an OG&E program) Program Description This program has the same aim as the Arkansas Weatherization Program, and will be targeted to acutely energy inefficient homes. It will provide energy efficiency improvements to participants, thereby 26 APSC Docket No TF, Doc Filed September 14, APSC Docket TF, Doc Filed June 3, 2013 The Empire District Electric Co. 18

20 decreasing demand and energy usage for those customers. The program will improve residents comfort and reduce energy costs by upgrading the thermal envelope and appliances in targeted households Program Highlights The program gained regulatory approval in Quarter 1 of Empire sorted out details of implementation (contractors, vendors, implementation timeline etc.) through much of Quarter 2 and Quarter 3 of Empire kicked off the program and made 55 different improvements to 15 homes in Quarter 4 of 2013 alone Program Budget, Savings & Participants Residential Weatherization Program (OG&E) Cost Energy Savings (kwh) Demand Savings (kw) Participants Program Budget Actual % Plan Evaluated % Plan Evaluated % Plan Actual % Program Year 2011 $ - $ Program Year 2012 $ - $ Program Year 2013 $ 39,715 $ 35,313 89% 46,256 23,817 51% % % $50,000 $40,000 $30,000 $20,000 $10,000 $- Program Year 2011 Program Year 2012 Program Year ,000 25,000 20,000 15,000 10,000 5,000 0 Energy Savings ( kwh) Budget Actual Description of Participants A participant is described as a single energy-efficient improvement measure performed in a home. More than one measure can and usually is installed in a home. For example, 55 improvements were made in 15 homes in the 2013 program Challenges & Opportunities Empire leveraged OG&E s program. However, small modifications had to be made to transfer this program to Empire s service territory Planned or Proposed Changes to Program & Budget Empire does not plan any changes to this program s budgets for the 2014 program year AC Tune-up and Duct Sealing Program Description The AC Tune-up Program was modeled after the OG&E HVAC Tune-up and Duct Repair Program. It is targeted at single family residential customers with central HVAC systems and works towards improving the efficiency of these units. For both the HVAC tune-up portion and the duct repair portion of this 28 APSC Docket TF, Doc Filed December 28, The Empire District Electric Co. 19

21 program, the customer must contract for air conditioning tune-up and inspection services from an Empire-approved local, certified, and licensed HVAC contractor Program Highlights Although this program did not have customer participation in 2013, a trade ally was established. Mobilizing trade allies via training sessions and establishing ongoing contact means that the program has been kicked off and participation and savings will hopefully come in Program Budget, Savings & Participants AC Tune-up and Duct Sealing Cost Energy Savings (kwh) Demand Savings (kw) Participants Program Budget Actual % Plan Evaluated % Plan Evaluated % Plan Actual % Program Year 2011 $ - $ Program Year 2012 $ - $ Program Year 2013 $ 9,488 $ 1,751 18% 18, % % % $10,000 $8,000 $6,000 $4,000 $2,000 $- Program Year 2011 Program Year 2012 Program Year Energy Savings ( kwh) Budget Actual Description of Participants A participant in this program is defined as a single home receiving a tune-up and/or duct repair Challenges & Opportunities Establishing, training and maintaining trade allies is always a challenge in Empire s small and remote service territory. For example, although Empire invited more than 40 HVAC contractors to its lunchand-learn training session, only one HVAC company was represented and trained to implement the program. Empire will continue to solicit new trade allies and provide additional training sessions in Planned or Proposed Changes to Program & Budget Empire does not plan any changes to this program s budgets for the 2014 program year. 3.0 Supplemental Requirements 3.1 Staffing Empire currently employs one full-time employee devoted to energy efficiency with the job title of Energy Efficiency Coordinator. Empire also has additional staff that supports energy efficiency. This includes management, marketing, customer service and analysts. No staffing changes were made in 2013, and none are planned for APSC Docket TF, Doc Filed December 28, The Empire District Electric Co. 20

22 3.2 Stakeholder Activities Empire participates in meetings of the Parties Working Collaboratively ( PWC ). This includes discussions of the TRM, discussions of AWP and the statewide C&I and Weatherization Collaboratives. Empire generally calls into these meetings and participates via Webinar, as a means to minimize administrative and travel costs. Empire provides training to HVAC professionals for Load Calculation using the Air Conditioning Contractors of America s Manual J. While Arkansas contractors are invited and encouraged to attend, the trainings are usually held in Missouri, where more than 88% of Empire s customers reside. Empire also hosted a lunch-and-learn training seminar for its Residential AC Tune-up and Duct Repair program. This training was held in Decatur, Arkansas, and featured insight and hands-on training from OG&E and Williams Energy Efficiency, Inc. Representatives. As previously mentioned, 40 HVAC contractors from Arkansas were invited with one attending. Below is a table summarizing these training sessions. Back External Training (contractors, trade allies, consumer groups, ect.) Event No. Start Date Class Class Description 1-day brush-up on 1. 5/17/13 "Manual J" 1 "Manual J" Load Calculation 1-day brush-up on 2. 11/1/13 "Manual J" 2 "Manual J" Load Calculation 3. 11/20/13 Informational meeting featuring OG&E and Williams Energy Efficiency HVAC Tune-Up and staff to mobilize local Duct Repair Kick-off HVAC contractors for OG&E-based HVAC Tune-up and Duct Repair program. Training Location Sponsor No. of Attendees (A) Length of Session (B) Training Session Man-Hours (A x B) Any Certificates Awarded? (Y or N) Joplin, MO Empire N Republic, MO Empire N Decatur, AR Empire N # of Certificates Awarded 3.3 Information Provided to Consumers to Promote EE Because Empire operates with a dramatically smaller and more rural customer base than many of its peers described at length in its response to Commission Order No. 40 in APSC Docket No TF 30 customer surveys, and experience have shown that direct mail is the preferred method of communication with Empire s Arkansas customers.. Empire periodically makes presentations on the programs available to community organizations in its service territory. It also appears at some community events to meet with customers and answer questions. As a means to better inform its customers, Empire coordinates with the Arkansas Energy Office for as many of these appearances as possible. 30 APSC Docket No TF, Doc Filed September 14, The Empire District Electric Co. 21

23 4.0 Appendix A: EM&V Contractor Report Attached as Appendix A to this report is Empire s 2013 EM&V Report, prepared by The Cadmus Group. 5.0 Appendix X: Attached as Appendix X are several examples of Empire s promotional and communication tools for its EE programs and customer service. Below are explanations of each of the seven customer communications found in Appendix X. Appendix X-1 Residential High-efficiency Lighting pre-paid mailer This postcard is distributed to every residential customer. In order to receive a free 4-pack of 13-watt CFL s, the customer must respond to Empire via a pre-paid post card. This year, Empire received roughly 430 responses out of roughly 3,800 residential customers. Appendix X-2 Residential High-efficiency Lighting insert Customers who receive a 4-pack of CFL s through the Residential High-efficiency Lighting program will also receive these inserts cross-promoting three of Empire s most popular residential programs. Customers receive one-page information sheets for the High-efficiency HVAC program, the ENERGY STAR Appliance program, and Empire s new Residential Weatherization Program. Appendix X-3 Arkansas Bill Sample This customer service tool is accessible on Empire s Web site as a viewable and downloadable pdf file. It explains the individual line items that make up an Empire District bill for an Arkansas residential customer. Appendix X-4 School-based Energy Education insert Middle school students who receive an EnergyWise kit through the School-based Energy Education program will receive this cross-promotional insert included with their kit. It promotes the High-efficiency HVAC program, the ENERGY STAR Appliance program, and Empire s new Residential Weatherization Program. Appendix X-5 Empire s Smart Energy Solutions Web site Empire has downloadable information sheets and applications for its EE programs on its Smart Energy Solutions Web site. It also has links to informational Web sites for EE tips like Energy Efficiency Arkansas and Get Energy Active. Appendix X-6 Empire s Facebook page In 2013, Empire made its way into the social media world by launching its official Facebook page. This allows Empire a space to interact with its customers for a variety of purposes, such as informing customers of outages, customer service and billing options, and energy efficiency programs and tips. Appendix X-7 Empire s Online Energy Calculator and Audit This program, detailed above in Section 2.9, is hosted from Empire s Web site, and features various options to help Empire customers find ways to conserve energy and lower their monthly bills. The Empire District Electric Co. 22

24 2013 Empire Energy- Efficiency Portfolio Evaluation Report April 1, 2014 Arkansas The Empire District Electric Company Planning and Regulatory Department 602 South Joplin Avenue Joplin, Missouri 64802

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26 Prepared by: Allie Marshall Sarah Brooks Amy Ellsworth Cadmus

27 Table of Contents Introduction... 1 Overview... 1 Evaluation Objectives... 1 Evaluation Methodology... 2 Portfolio Evaluation... 4 Portfolio Status Overview... 4 Comprehensiveness... 5 Evaluation Findings and Conclusions... 5 Residential High Efficiency Lighting Program Program Description Program Status Overview Program Impacts Review Evaluation Findings and Conclusions Recommendations School Based Energy Education Program Program Description Program Status Overview Program Impact Review Evaluation Findings and Conclusions Recommendations High Efficiency Air Conditioning Program Program Description Program Status Overview Program Impact Review Evaluation Findings and Conclusions Recommendations ENERGY STAR Appliance Program Program Description Program Status Overview Program Impact Review i

28 Evaluation Findings and Conclusions Recommendations Residential Weatherization Program Program Description Program Status Overview Program Impact Review Evaluation Findings and Conclusions Recommendations C&I Prescriptive Program Program Description Program Status Overview Program Impact Review Evaluation Findings and Conclusions Recommendations ii

29 Acronym List Acronym AIEC APSC ASHP C&I CAC CFL CFM EM&V gpm HSPF HVAC kw kwh NTG OG&E RAP SEER TRM VFD Term Arkansas Industrial Energy Clearinghouse Arkansas Public Service Commission Air-source heat pump Commercial and industrial Central air conditioner Compact fluorescent light bulbs Cubic feet per minute Evaluation, measurement, and verification Gallons per minute Heating seasonal performance factor Heating, ventilation, and air conditioning Kilowatt Kilowatt-hour Net-to-gross Oklahoma Gas & Electric Resource Action Programs Seasonal energy efficiency ratio Technical Reference Manual variable frequency drive iii

30 Introduction The Empire District Electric Company s portfolio includes seven programs in the residential prescriptive category: 1) Residential High Efficiency Lighting, 2) High Efficiency Air Conditioning 1, 3) ENERGY STAR Appliances, 4) Online Home Audit Tool, 5) School Based Energy Education, 6) Residential Weatherization, and 7) AC Tune-Up. 2 In addition to the residential programs, Empire s portfolio includes four commercial and industrial (C&I) programs: 1) C&I Prescriptive, 2) C&I Custom, 3) Small Business Lighting, and 4) C&I Audit. Empire also provides funding for two additional statewide programs (Arkansas Weatherization Assistance and Energy Efficiency Arkansas) that are implemented by third-party organizations. Empire contracted with Cadmus to conduct process and impact evaluations of its 2013 portfolio in compliance with its regulatory requirements. 3 Overview Due to a restricted budget and anticipated limited program participation, Cadmus conducted minimal process and impact evaluation activities for programs that reported participation and savings in Therefore, the impact findings in this report are restricted to the following programs: Residential High Efficiency Lighting Program High Efficiency Air Conditioning Program ENERGY STAR Appliances Program School Based Energy Education Program Residential Weatherization Program C&I Prescriptive Program Further details of each evaluation task are described below. Evaluation Objectives In accordance with the Arkansas Technical Reference Manual (TRM) Version 3.0, Cadmus designed the 2013 portfolio evaluation to: 1) quantify energy and demand savings resulting from Empire s active programs, 2) understand why certain program effects occurred, and 3) identify ways to improve and refine current and future programs Filed as the High Efficiency HVAC program, but referred to by the energy-efficiency coordinator and in this report as the High Efficiency Air Conditioning Program. Residential Weatherization and AC Tune-Up were new in Cadmus did not evaluate the two statewide programs in

31 Cadmus had the following objectives for the 2013 impact evaluation: Verify that program tracking data support total claimed savings Review the current database tracking methodology against the recommended formats in PROTOCOL A: Program Tracking and Database Development, as defined in the Arkansas TRM Verify correct use of the Arkansas TRM values Estimate 2013 gross energy and demand impacts at the measure and program levels Estimate net impacts at a program level Identify key issues and areas of focus for subsequent evaluations and TRM updates Cadmus 2013 process evaluation objectives were to: Document the programs 2013 evolution, processes, and key success factors and challenges Track Empire s progress incorporating recommendations from the 2012 evaluation Identify significant gaps, achievements, and areas where improvements are needed Provide recommendations to help streamline program delivery and operations, improve customer satisfaction, enhance participation and energy savings, and achieve varied program objectives Evaluation Methodology Due to a restricted budget and limited program participation, Cadmus did not conduct measurement and verification activities for the 2013 evaluation. However, our high-level evaluation provides critical feedback regarding program performance and recommendations for process improvements. Impact Evaluation Cadmus conducted the following activities for the impact evaluation of the Residential High Efficiency Lighting, School Based Energy Education, High Efficiency Air Conditioning, ENERGY STAR Appliances, Residential Weatherization, and the C&I Prescriptive programs: Tracking Database Verification: Verify that the total claimed savings and quantities were supported by program tracking data. Tracking Database Review: Verify that the tracking database captures adequate and complete information. Ex Ante Savings Review: Verify that TRM values were used correctly and evaluate the per-unit savings for program measures. 4 Net Savings Review: Apply stipulated net-to-gross (NTG) values to program savings. 4 Please note that values in impact tables, particularly for ex post and net savings, may not add correctly due to rounding of decimal places. 2

32 Process Evaluation For the process evaluation, Cadmus gathered program information and feedback through reviews of the calendar of projects and Resource Action Program evaluation report, and an end-of-year interview with Empire s energy-efficiency coordinator to: 5 Follow-up on 2012 recommendations. Discuss general program activities and significant changes and results. Discuss potential future program changes. 5 This interview was with Nate Hackney on December 20,

33 Portfolio Status Overview Portfolio Evaluation As noted in the Introduction, Empire offers seven residential sector and four C&I sector programs. However, only six programs reported participation (Residential High Efficiency Lighting, High Efficiency Air Conditioning, ENERGY STAR Appliances, School Based Energy Education, Residential Weatherization, and C&I Prescriptive) and therefore have dedicated impact results in this report. Although the 2013 portfolio more than doubled the ex ante savings achieved in 2012 and exceeded some of the 2013 program targets based on reported gross savings, Empire did not meet its energy savings or demand reduction goals on an evaluated net basis. Overall, Empire s portfolio achieved only 14% of its 2013 savings goal and 15% of its demand reduction goal (Table 3 and Table 4 in the Portfolio Performance section). As stated in Empire s response to Arkansas Public Service Commission (APSC) Docket TF Order No. 40, Empire faces numerous challenges in executing its energy-efficiency portfolio in Arkansas: A small customer base (n=4,300) from which to fund programs. Predominately rural territory with town populations ranging from 100 to 3,158, and therefore little economic activity. Nearly half of Empire s electric sales come from two large nonresidential customers. 6 Limited income. Although economic conditions have improved somewhat, according to the U.S. Census Bureau, the average per capita income for the territory is $26, Few cost-effective marketing opportunities. 8 The Independent Evaluation Monitor (IEM) concurred that Empire faces great difficulty by stating in the Annual Summary Report on Evaluation, Measurement & Verification (EM&V) Findings that it is unlikely that Empire s program portfolio will ever reach its participation goals due to the challenges it faces in its service territory. 9 These continuing challenges provide a stark backdrop for Empire s efforts to implement a successful portfolio of programs that offer residential and nonresidential customers a variety of opportunities to save energy and money. As part of Empire s efforts to offer a comprehensive portfolio in 2013, they continued to provide programs to customers in every sector, offered training to contractors, implemented a territory-appropriate marketing strategy, ensured sufficient funding for all programs, continued to leverage local partnerships such as the Arkansas Industrial Energy Clearinghouse This is the case even though the customer base is predominantly residential (82.2%). United States Census Bureau: As discussed in the 2012 evaluation report, the location and rural nature of the territory do not provide costeffective mass media advertising opportunities. Docket tf-DOC Page iv. 4

34 (AIEC), and established a new partnership with Oklahoma Gas & Electric (OG&E), which provided customers with two new programs. Despite these efforts, Empire continued to struggle to achieve program participation throughout the portfolio. Evaluation Findings and Conclusions The following sections present the portfolio-level evaluation findings. Under each topic area heading, we present a concluding statement, followed by findings that support the concluding statement. Comprehensiveness In compliance with APSC rules, Cadmus assessed each of seven factors described in the Comprehensiveness Checklist. 10 In 2012, Cadmus was unable to evaluate the portfolio against the statewide comprehensive factors. In 2013, due to limited program activity, resources, and available information, Cadmus conducted a condensed assessment of Empire s overall compliance with the comprehensiveness factors. Our findings relevant to each factor are outlined below. Factor 1: Education, Training, Marketing, and Outreach Whether the programs or portfolio provide, directly or through identification and coordination, the education, training, marketing, or outreach needed to address market barriers to the adoption of costeffective energy-efficiency measures. Cadmus reviewed Factor 1 as two complementary components (1. Education/Marketing and Outreach and 2. Training) and found that Empire only partially met the objectives of Factor 1. Education /Marketing and Outreach Empire provides limited customer education. Specific efforts include: the company website, program flyers, a postcard to solicit interest in the Residential High Efficiency Lighting Program, one-line notices in utility bills, community presentations, and face-to-face discussions with key C&I customers. Empire conducts very limited marketing and outreach for its programs as the cost can be prohibitive and affect cost-effectiveness, particularly as it continues to experience limited participation in its programs. Training In 2013, Empire provided relevant, although limited, training opportunities to its contractors including two Manual J load calculation training courses and one training for the new AC Tune-up Program. However, no Arkansas contractors attended the Manual J trainings and only one contractor attended the AC Tune-up Program training. The primary challenge, noted by the energy-efficiency coordinator, was that the majority of the service territory is bedroom communities that have very few local contractors. 10 APSC Docket U Order No

35 Factor 2: Budgetary, Management, and Program Delivery Resources Whether the program and/or portfolio have adequate budgetary, management, and program delivery resources to plan, design, implement, oversee, and evaluate energy-efficiency programs. To evaluate budget and resource sufficiency, Cadmus assessed performance indicators associated with the adequacy of budget allocations and determined whether program staff and trade ally support was sufficient to support program goals. We found that Empire did not meet the objectives of Factor 2. In 2013, six of Empire s 11 programs had participation, 11 a three-fold improvement over the two programs with participation in Empire spent only 20% of the portfolio budget which is roughly in line with its level of goal achievement or 14% of the energy savings and 15% of the demand reduction goals. In addition, all but one program with participation (Residential High Efficiency Lighting, which exceeded its goals in 2013) underspent the allocated budget. Thus, in 2013 Empire had more than sufficient budget allocated to achieve these limited results; however, due to low participation overall, Cadmus cannot determine with certainty if the current budget allocation is sufficient. Successful implementation of the Empire portfolio is impeded by limited staff resources. One full-time staff member (the energy-efficiency coordinator) is designated to oversee the entire portfolio of 11 programs. As a comparison, another Arkansas utility, SWEPCO, manages seven efficiency programs with a staff of seven full time employees. See the Administrative Processes section for details. As discussed under the Training component of Factor 1, Empire continues to struggle to identify and recruit sufficient trade allies to support program implementation. Factor 3: Major End Uses Addressed Whether the programs and/or portfolio reasonably address all major end-uses of electricity or natural gas, or electricity and natural gas, as appropriate. To assess Factor 3, Cadmus identified the end uses addressed by each program. In 2013, Empire s programs offered customers a diverse range of choices that met the objectives of Factor 3. Table 1 summarizes the end uses available in Empire s portfolio by customer sector. 11 The two statewide programs were not included in the evaluation. 6

36 Table 1. Empire Program End Uses by Customer Sector Sector Lighting HVAC Hot Water Appliances Building Shell Plug Loads Motors Residential Small Business C&I : Measures available to customers in the identified sector; : Measures available, but not targeted; : Measure is not offered. In total, the portfolio covers all major end uses for both the residential and commercial sectors. However, it is questionable whether such a diverse portfolio is appropriate for Empire given its territory and staffing constraints. Factor 4: Comprehensively Address Customer Needs Whether the programs and/or portfolio, to the maximum extent reasonable, comprehensively address the needs of customers at one time, in order to avoid cream-skimming and lost opportunities. In assessing Factor 4, Cadmus reviewed the extent to which Empire offered technical support in 2013 to educate customers on cost-effective, comprehensive projects and/or whether it provided incentives that encourage participants to install multiple measures and/or those with higher efficiency levels to increase project comprehensiveness. We found that Empire partially met the objectives of Factor 4. While Empire strives to provide incentives that align with industry best practices, the portfolio does not offer bonus or bundled incentives for the completion of comprehensive projects. However, the statewide Arkansas Weatherization Program and Empire s new residential Weatherization Program offer Empire-supported energy audits to qualifying, severely inefficient homes in Empire s territory and Empire also provides incentives covering up to 50% of the cost of energy audits for nonresidential customers through and the C&I Audit program. In addition, Empire continues to have an informal partnership with the AIEC, which also offers on-site energy assessment to nonresidential customers. As reported by the energy-efficiency coordinator and supported by participation data, Empire customers are historically more inclined to participate in programs that require little or no cash up front and minimal effort. This market barrier exacerbates Empire s ability to comprehensively address customer needs at one time. Although Empire offers opportunities for customers to learn about comprehensive opportunities, few customers have taken advantage of this offer. Factor 5: Targeting and Leverage Whether such programs take advantage of opportunities to address the comprehensive needs of targeted customer sectors or to leverage non-utility program resources. 7

37 Cadmus assessed whether Empire s portfolio provides diverse energy-efficiency opportunities that are targeted to the major customer sectors. In addition, we reviewed Empire s use of external partnerships and resources for promotion, leveraging funding, offering implementation assistance, or creating economies of scale to improve program effectiveness, reduce customer barriers, or maximize delivery assistance. Empire met the objectives of Factor 5. We found that Empire s portfolio offers targeted energyefficiency opportunities to the residential, small commercial, institutional (schools) and C&I sectors and that those programs provide appropriate levels of technical support and energy-efficiency upgrade opportunities. However, given that there are only two large C&I customers, it is questionable whether such a diverse portfolio is appropriate for Empire. Cadmus also found that Empire collaborates with local community and utility partners, specifically: Empire continues to have an informal partnership with the AIEC. Empire periodically collaborates with the Arkansas Energy Office to provide informational presentations to communities within its service territory. Empire established a new partnership with OG&E to provide customers with two new programs. Factor 6: Cost-Effective Energy Efficiency Whether the programs and/or portfolio enable the delivery of all achievable, cost-effective energy efficiency within a reasonable period of time and maximize net benefits to customers and the utility system. As discussed in Factor 2, Empire achieved 14% of its energy-savings goal and 15% of its demandreduction goal while only spending 20% of the portfolio budget. The barriers that limit participation in Empire s territory (detailed in other sections of this report) may be too great to enable the delivery of all cost effective energy efficiency within a reasonable period of time. Cadmus did not calculate the costeffectiveness of Empire s programs or portfolio, so we are unable to determine whether they maximize benefits to customers and the utility. Factor 7: Evaluation, Measurement, and Verification (EM&V) Procedures Whether the programs and/or portfolio have EM&V procedures adequate to support program management and improvement; calculation of energy, demand, and revenue impacts; and resource planning decisions. To assess Factor 7, Cadmus assessed the extent to which Empire provided high quality and timely data necessary to conduct EM&V. In addition, we assessed the quality, completeness, and timeliness of data required to conduct EM&V activities and found that Empire partially met the objectives of Factor 7. Empire was responsive to the Cadmus data requests and data quality was sufficient, although limited. Cadmus also evaluated the resources Empire allocated to the EM&V effort. Spending on EM&V was 8

38 approximately 2% of Empire s 2013 portfolio budget and 8% of its 2013 spending. Industry standards are that approximately 5% to 6% of program costs should be allocated to EM&V, thus Empire s EM&V resource allocation is on the low side of its portfolio budget but high in comparison to its actual program implementation spending in However, given that its portfolio budget is very small in relative terms but also in light of its large portfolio of programs, it was impossible to conduct an in-depth or rigorous evaluation. Status of 2012 Recommendations Limited resources hindered Empire s ability to complete the 2012 recommendations. The energy-efficiency coordinator reported that Empire was restricted by the lack of resources to fully pursue the recommendations provided in the 2012 evaluation report (listed in Table 2). Despite this challenge, Empire made progress on several key recommendations, including reallocating budget from non-preforming programs to give-away programs and developing new give-away programs to provide energy-saving opportunities to residential customers. To determine the status of each recommendation, Cadmus gathered input from the energy-efficiency coordinator and reviewed program materials and the database. We then assigned each recommendation one of the following designations: Complete: Empire considered and took action to implement the recommendation. Complete (Consider/Rejected): Empire considered the recommendation, but determined that the recommended action was not in the best interest of the portfolio or beneficial to meeting portfolio goals. In Progress/Partial: Empire either partially implemented or is in the process of implementing the recommendation. Incomplete: The recommendation was not implemented. N/A: The recommendation was no longer applicable for the portfolio. Table 2 presents Empire s status in completing the 2012 Evaluation Recommendations at a portfolio level. We present similar results in each of the program sections where we provided recommendations in Table Status of 2012 Portfolio Recommendations 2012 Recommendation 2013 Status Review nonperforming programs to determine if the design and measures are appropriate for Empire s service territory. Review nonperforming programs to determine what types of programs are most appropriate for Empire s service territory, and identify ways to redesign the current programs to simplify customer participation and provide greater flexibility in achieving goals. Completed (Considered/Rejected). The energyefficiency coordinator reported that it is not costeffective for Empire to redesign its portfolio during a program cycle. 9

39 2012 Recommendation 2013 Status Review the incentive levels and marketing budget allocations to ensure they are consistent with industry standards and appropriate given Empire s lower income customer base. Develop service territory-level tracking for the Online Home Audit Tool Program. Develop a broad-based portfolio-level marketing plan. Identify specific potential target customers and develop a messaging hierarchy that defines marketing messages based on customers key motivators and barriers. In addition, identify specific low-cost promotional activities and events that would enable Empire to increase its marketing penetration, such as sponsoring a local media day to promote relevant programs (e.g., the Arkansas Weatherization Assistance Program). Leverage community outreach events to cross-promote Empire programs. Track marketing efforts by inquiring how participants learned about the program (e.g., when they call to inquire about participation, on rebate forms). Reallocate the budget to invest in service territoryappropriate programs. Review incentive levels and marketing budget allocations to ensure they are consistent with industry standards. Develop a portfolio-wide quality assurance plan to ensure that savings achieved by each program can be verified as necessary. If Empire continues to offer programs that require site verification, include project documentation and verification protocols in the quality assurance plan. Solicit contactor feedback to identify their barriers to participation and to inform Empire s efforts to encourage participation. Consider issuing a formal request for proposals to potential third-party program implementation firms to solicit their services to deliver Empire s programs. Engage the services of a professional implementation contractor to support a more active delivery approach. Look for potential collaborative training opportunities with other utilities, community colleges, and/or Completed (Considered/Rejected). The energyefficiency coordinator reported that Empire strives to ensure that their incentive levels and budgets are costeffective, but did not pursue any changes. N/A. The current software does not have the capability to provide service territory-specific tracking. In Progress/Partial. Empire developed a calendar of activities that includes marketing efforts. In addition, Empire leveraged community outreach events such as Chamber of Commerce meetings and a county fair. Incomplete. Due to limited staff, Empire did not followup on this recommendation. Completed. Empire reallocated budget from nonperforming programs to the two new no-cost programs. Completed (Considered/Rejected). The energyefficiency coordinator reported that Empire strives to ensure that their incentive levels and budgets are costeffective, but did not pursue any changes. Incomplete. Due to limited staff, Empire did not followup on this recommendation. Completed. Empire reached out to contractors by phone and in-person, as well as offering relevant training. Completed (Considered/Rejected). Empire considered this request, but determined it was too large of a change to make mid-stream for the program cycle.. Completed. Empire offered contractor training; however, only one contractor participated in

40 2012 Recommendation 2013 Status technical schools to encourage further contractor training and engagement. Develop a more cohesive relationship with AIEC to leverage the trade allies currently aligned with AIEC. Review the participation requirements for C&I auditing firms. Solicit customer feedback in Monitor customer satisfaction, as appropriate. Develop a portfolio-level operations manual that describes key areas of program execution, such as process flow and organization charts, roles and responsibilities, customer outreach and marketing strategies, and data collection, rebate submission, and processing requirements. Review each rebate application form to ensure it includes necessary data collection. Review website pages and incorporate additional design best practices, such as using targeted messaging with a clear call-to-action; balancing text, graphics, and white space; and ensuring that information is easy to identify and requires minimal clicks. In addition to modeling the new database on Protocol A of the Arkansas TRM, consider the recommendations depicted in the 2012 evaluation plan. In Progress/Partial. Although Empire did not have a formal relationship with AIEC in 2013, they maintained open lines of communication. Incomplete. Due to limited staff, Empire did not followup on this recommendation. In Progress/Partial. Due to limited staff, Empire did not follow-up on this recommendation. However, participant feedback was solicited for the School Based Energy Education Program. In Progress/Partial. Empire continued to engage customers who called with questions, and received unsolicited hand-written thank you notes. Incomplete. Due to limited staff, Empire did not followup on this recommendation. Incomplete. Due to limited staff, Empire did not followup on this recommendation. Incomplete. Due to limited staff, Empire did not followup on this recommendation. In Progress/Partial. Empire tracked many more variables in 2013 than in 2012; however, there are additional variables that Empire could track that would help facilitate the programs evaluations. Portfolio Performance Participation improved in 2013, but is still insufficient to meet the portfolio goals. Six of Empire s 11 programs had participation in 2013, a three-fold improvement over the two programs with participation in However, only two programs of these six programs either met or exceeded their ex ante 2013 energy savings goal, demand reduction goal, and participation target (Residential High Efficiency Lighting and School Based Energy Education). While the Residential Weatherization Program achieved about half of its participation and savings targets, the remaining three active programs had minimal participation (High Efficiency Air Conditioning, ENERGY STAR Appliances, and C&I Prescriptive). 11

41 Challenging market conditions, over-estimated savings assumptions in Empire s program planning process, and adjustments to program savings based on changing parameter values between TRM versions 2.0 and 3.0 all had an impact on Empire s lower than expected performance. These factors are discussed in detail in other sections of this report. The energy-efficiency coordinator reported that the slight increase in participation in the ENERGY STAR Appliances and High Efficiency Air Conditioning programs may have been related to increased economic activity in the region that allowed for more discretionary spending by customers. In addition, just as in 2012, the Online Home Audit Tool Program may have had participants, but Empire does not attribute savings to the program. Furthermore, the audit tool to is provided to customers across multiple states and Empire does not track its usage by service territory; therefore, it is unclear how many of the program participants were located within the Arkansas territory. Table 3 and Table 4 provide the net savings achieved for energy and peak demand across the portfolio. 12 The individual program sections below have more details on each of the active programs. Program Table 3. Empire Portfolio Net Energy Savings Goals and Evaluated Net Energy Savings Net Energy Savings Goal (kwh) Evaluated Net Energy Savings (kwh) Percent of Energy Goal Achieved High Efficiency Air Conditioning 33,285 4,942 15% Residential High Efficiency Lighting 53,870 27,806 52% ENERGY STAR Appliances 54, % Online Home Audit Tool N/A N/A N/A School Based Energy Education 191,835 95,761 50% C&I Prescriptive 481,263 21,218 4% C&I Custom 229, % C&I Audit N/A N/A N/A Small Business Lighting 120, % Residential Weatherization 46,256 23,817 51% AC Tune-Up 18, % Total 1,229, ,145 14% 12 The two statewide programs are not included in the tables. 12

42 Program Table 4. Empire Portfolio Net Demand Reduction Goals and Evaluated Net Demand Reduction Net Demand Reduction Goal (kw) Evaluated Net Demand Reduction (kwh) Percent of Demand Goal Achieved High Efficiency Air Conditioning % Residential High Efficiency Lighting % ENERGY STAR Appliances % Online Home Audit Tool N/A N/A N/A School Based Energy Education ,224% C&I Prescriptive % C&I Custom % C&I Audit N/A N/A N/A Small Business Lighting % Residential Weatherization % AC Tune-Up % Total % Portfolio Design Empire s portfolio may not be appropriate for its service territory. Empire offers energy-efficiency programs to customers in all sectors. However, as noted in the Introduction section, as well as in the 2012 report, Empire faces numerous hurdles to achieving its savings and participation goals. Primary challenges include: A small and economically challenged customer base. The territory includes little economic activity, as the major shopping centers are outside the service territory and the average income is just $26,199. Insufficient and hard-to-reach commercial customer base. Two large commercial facilities account for nearly 50% of Empire s sales volume in the territory. One of these facilities has opted-out of program participation completely, while the other is currently under contract with the AIEC to complete energy-efficiency upgrades. Empire s remaining commercial demand comes from diverse small- and medium-sized businesses that are spread across its rural territory. Identifying and recruiting contractors. Due to the rural nature of the service territory, there are very few local contractors. In addition to the difficulties listed above, Empire is constrained by limited resources, such as only having one full-time staff member to oversee all energy-efficiency efforts, in addition to other responsibilities, throughout Empire s four-state service territory. This energy-efficiency coordinator reported that although less than 3% of Empire s total customer base is in Arkansas, he must dedicate a 13

43 disproportionately high amount of time to energy efficiency in Arkansas compared to other service territories. As noted above, the IEM team concurred with these findings in its Annual Summary Report. To increase engagement with the residential customer base, Empire s energy-efficiency coordinator stressed the continued importance of give-away programs that do not require a significant investment of the customers time or financial resources to participate. Three of the six active programs are giveaway programs (Residential High Efficiency Lighting, School Based Energy Efficiency, and Residential Weatherization), and the remaining three programs had only minimal participation (High Efficiency Air Conditioning, ENERGY STAR Appliances, and C&I Prescriptive). Empire s collaboration with OG&E has resulted in two promising programs. Empire made no fundamental changes to their existing programs in However, the energyefficiency coordinator reported that Empire entered into a new partnership with OG&E to provide two new programs to customers (Residential Weatherization and AC Tune-Up). Both programs were designed to offer customers free energy-savings opportunities and require little effort to participate. Although both programs launched late in 2013, the Residential Weatherization Program quickly gained attention and achieved 51% of its internal participation and savings targets, as well as 69% of its demand targets. See the Residential Weatherization Program chapter for details. Marketing and Outreach Empire s unique service territory limits the number of cost-effective marketing tactics. The energy-efficiency coordinator confirmed that Empire continued to take a holistic approach to marketing the portfolio in He restated that although mass market advertising might increase customer awareness, it was not cost-effective or desirable, as most local television and radio stations provide services to a majority of non-empire customers. 13 Therefore, direct mail continued to be Empire s primary form of reaching customers. Empire s other marketing efforts in 2013 included: a website, flyers, a postcard to solicit interest in the Residential High Efficiency Lighting Program, one-line notices in utility bills, local newspaper ads, and face-to-face discussions with C&I customers. Although Empire did not develop a marketing plan, they developed a calendar of activities that included all the 2013 marketing efforts across all of Empires service territories. However, the energy-efficiency coordinator confirmed that these marketing efforts were not tracked to determine their effectiveness. Program Budgets and Management Due to limited participation, it was not feasible to determine whether the portfolio budget would have been sufficient to meet the 2013 goals. The energy-efficiency coordinator reported that the portfolio budget was more than sufficient to support the 2013 portfolio goals. However, Empire significantly underspent nearly every program budget (except for the Residential High Efficiency Lighting Program; see Table 5). Since Empire achieved 14% of its electricity targets, and spent 20% of its program budget, it is theoretically feasible that Empire 13 Empire s Arkansas territory is limited to 3.7% of Benton County, which is 0.276% of the population in Arkansas. 14

44 may have been able to reach its goals within the allocated budget; however, just as in 2012, we note that achieving the goals would likely have required allocating a larger share of each program budget to marketing, outreach, and incentives. Similarly, the energy-efficiency coordinator indicated that the budgets for both the High Efficiency Air Conditioning Program and the ENERGY STAR Appliances Program were more than sufficient to support the 2013 portfolio goals. However, neither program achieved its goals or spent a significant portion of its program budget (see Table 3 for energy savings, Table 4 for demand savings, and Table 5 for budget details). Table 5. Portfolio Budget and Actual Expenditures Program Projected Budget Actual Expenditures Percent of Budget Used High Efficiency Air Conditioning $24,730 $3,514 14% Residential High Efficiency Lighting $7,944 $8, % ENERGY STAR Appliances $10,480 $1,471 14% Online Home Audit Tool* $2,000 $700 35% School Based Energy Education $42,697 $30,154 71% Arkansas Weatherization Assistance* $6,750 $2,116 31% Energy Efficiency Arkansas* $2,000 $1,263 63% C&I** Programs $223,905 $1,077 0% Small Business Lighting $49,325 $0 0% Residential Weatherization $39,715 $27,107 68% AC Tune-Up* $9,488 $268 3% Regulatory* $30,000 $13,672 46% Total $449,034 $89,426 20% * Cadmus did not evaluate. ** Empire rolled all three C&I programs into one budget. Administrative Processes Staffing resources are not sufficient to actively manage Empire s large portfolio of programs. The energy-efficiency coordinator confirmed that no staffing changes were made in 2013, and reported that that he remains the only full-time staff member dedicated to the portfolio. Although he indicated that he can rely on other staff to provide support when necessary, he confirmed they were unable to address many of the 2012 recommendations due to staffing constraints. Specifically, the energyefficiency coordinator noted he was unable to pursue: Reviewing and possibly revising the website and rebate applications. Developing a portfolio-level quality assurance document. Developing a portfolio-level operations manual. Tracking marketing efforts. 15

45 Empire currently offers 11 programs that are implemented by Empire and therefore overseen by one staff member; the energy-efficiency coordinator. As part of implementation, the energy-efficiency coordinator conducts trade ally outreach, program marketing, quality assurance of rebate applications, and rebate check processing for all residential customers and in coordination with Applied Energy Group, the rebate processing vendor, for C&I customers. In addition, the energy-efficiency coordinator is responsible for duties outside of the Arkansas territory, where the majority of Empire s customer reside. However, due to the energy-efficiency requirements in Arkansas, the energy-efficiency coordinator spends a disproportionately high amount of his time overseeing the Arkansas portfolio. Trade Ally Response Trade ally participation continued to be insufficient to support program goals. As in 2012, Empire did not contract with any vendors in 2013, despite the energy-efficiency plan calling for the use of third-party vendors to support the High Efficiency Air Conditioning, Small Business Lighting, ENERGY STAR Appliances, C&I Prescriptive, and C&I Custom programs. Empire did leverage existing trade allies that support OG&E programs to deliver the new Residential Weatherization Program. The energy-efficiency coordinator reported that he continued to reach out (unsuccessfully) to local contractors, even cold calling every contractor in the yellow pages to ensure that contractors were aware of Empire s programs. The primary challenge, noted by the energy-efficiency coordinator, was that the majority of the service territory is bedroom communities, which feed into larger metropolitan hubs but have very few local contractors. Therefore, most contractors would have to travel from outside the territory to participate in the programs. Despite this impediment, Empire continued to offer relevant contractor trainings, including two Manual J/load calculation courses and one AC Tune-up training. 14 Due to low trade ally participation and a restricted evaluation budget, Cadmus did not conduct contractor surveys in Therefore, we were unable to assess the extent of related commercial activity in Empire s territory during 2013 or determine the variables that may have impacted contractor involvement in the program. Customer Response Anecdotal evidence indicates continued high customer satisfaction. Although Empire solicited feedback from customers through an online survey on its website, there was not sufficient data to conduct a service territory-specific analysis of customer satisfaction. However, the energy-efficiency coordinator reported that he received a number of handwritten thank you notes from customers, especially related to the Residential High Efficiency Lighting Program and the School-based Energy Education Program. 14 The technical trainings were held in Joplin Missouri, which is within easy driving distance of the Arkansas territory. However, no trade allies from the Arkansas territory attended. 16

46 Due to low participation and a restricted evaluation budget, Cadmus did not conduct customer surveys in 2013; therefore, we were unable to assess customer satisfaction. Portfolio Program Materials Critical program materials remain undeveloped. The energy-efficiency coordinator indicated that in order to remain as cost-effective as possible, Empire did not make substantial changes to any program materials in Therefore, Cadmus still recommends the same material improvements as we had recommended in Specifically, the portfolio lacks: 1) an implementation plan that includes process/organizational flowcharts and defined roles and responsibilities, 2) quality assurance and verification protocols or inspection procedures, and 3) a marketing plan. However, Empire did create a calendar of activities, which identified the 2013 marketing tactics. Data Tracking and Reporting Data tracking improved, but there remains room for improvement. Empire revamped how data is tracked by enhancing the tracking spreadsheet and capturing more of the information needed to support evaluation activities. Despite these improvements, there are several additional variables that Cadmus recommends tracking (see Enhance data tracking section for more details). The energy-efficiency coordinator noted that Empire may consider purchasing data tracking software in the future. Portfolio-Level Recommendations As was discussed in the Portfolio Status Overview section, Empire is facing an array of obstacles to implementing successful energy-efficiency programs. These challenges, along with the Cadmus process evaluation interview and impact analysis, informed the recommendations presented in this section. Consider eliminating non-performing programs in the next program cycle. Empire s customer base is largely residential and inclined to participate in low-cost/give-away programs that require a minimal time commitment. In addition, due to the rural nature of the service territory, Empire is hindered in its ability to develop a strong local trade ally network to support delivery, and its resources are not sufficient to contract with a turn-key implementation contractor. Finally, Empire s allocation of human resources is not sufficient to manage 11 different programs. 15 These factors contribute to a program portfolio that is outsized and does not align well with Empire s territory or delivery capacity. By consolidating the portfolio into a few programs that are appropriately targeted to its territory, Empire could consolidate its budget and focus its activities to those programs most likely to succeed. Although amending its program portfolio during the current program cycle would require filing with and obtaining approval from the APSC, and therefore is not a cost-effective use of Empire s resources, we 15 This is not including the two statewide programs: the Arkansas Weatherization Assistance Program and the Energy Efficiency Arkansas Program. 17

47 suggest that Empire review its current portfolio prior to filing its next energy-efficiency plan, and explore eliminating programs that are trade ally driven and/or require more than a simple application from the customer. However, if Empire decides to keep the current programs, we suggest streamlining the portfolio by offering sector-level programs rather than measure-level programs. For example, this could happen by combining the Residential High Efficiency Lighting, C&I Lighting, ENERGY STAR Appliances, and High Efficiency Air Conditioning programs into a Residential Perspective Program. Similarly, the Residential Weatherization and AC Tune-Up programs could be combined into a Residential Direct Install Program. Enhance data tracking. Adding fields to capture additional data in rebate application forms and enhancing the data tracking would facilitate a more robust program evaluation. Due to these missing variables, Cadmus made assumptions about the water heater type to determine dishwasher savings, and we had to revert to the Arkansas TRM to determine savings for refrigerators. We suggest that Empire add the following key variables to the ENERGY STAR Appliances Program database: Water heater type (for dishwashers), Type of replacement for refrigerators (early or on failure), and Model number and manufacturer of the refrigerator that was replaced. We also suggest that Empire expand the amount of data that is collected and tracked for the Residential Weatherization Program. For example: Collect and report the existing R-Value for any insulation installed. Track the exact wattage of installed CFLs, instead of wattage ranges, to allow for a more precise evaluation of these bulbs savings. Develop a portfolio-level marketing plan and track marketing efforts. A marketing plan does not need to be extensive or costly. It should articulate the general framework for marketing activities and help Empire staff ensure that the program messaging and tactics remain aligned with its customer targets and portfolio objectives. The key elements of a marketing plan include: Identify potential target customers and develop a marketing messaging hierarchy based on customers key motivators and barriers. Identify low-cost marketing channels and tactics that align with the identified target customers. Leverage community partners to cross-promote Empire programs, as well as low-cost promotional activities and events that would allow Empire to increase its marketing presence (such as sponsoring a local media day to promote the Arkansas Weatherization Assistance Program). 18

48 Outline procedures for tracking marketing efforts by inquiring how participants learned about the program (when they call to inquire about participation, on rebate forms, etc.). Such tracking can inform staff of the best use of the limited marketing budget. Include an updated calendar of marketing activities for each year similar to that already developed for Append marketing materials annually as needed, such as flyers, mailers, and advertisements. Develop an operations manual. Consider developing a portfolio-level operations manual that describes key areas of program execution, such as process flow and organization charts, roles and responsibilities, data collection, rebate submission, and processing requirements. Inclusion of clearly defined staff and implementation roles ensures that as program staff change, roles and responsibilities are understood by new staff members as well as by the team as a whole. 19

49 Program Description Residential High Efficiency Lighting Program Through the Residential High Efficiency Lighting Program, Empire provides free four-packs of 13-watt CFLs to interested residential customers. In 2013, Empire sent postcards with the bulb offer to every residential customer in its Arkansas territory. Empire worked with their vendor to mail bulbs to customers who returned the postcard indicting they were interested in the program (this amounted to 1,720 individual CFLs, or 430 packs). Program Status Overview The Residential High Efficiency Lighting Program had a successful year, exceeding its 2013 participation target by 79% and its demand reduction goal by 1%. However, the program only achieved only 52% of its net energy-savings goal, which is solely due to adjustments made to the savings per bulb in the the ex post gross and net stages of the evaluation. Two factors contributed heavily to the decrease in this net savings per bulb value: 1) Updates to the energy waste heat factor between versions 2.0 and 3.0 of the Arkansas TRM caused gross savings per bulb to decrease. The waste heat factor listed in TRM 2.0 (and applied in the 2012 Evaluation Report) was 1.05 (causing a positive effect of 5% on savings). It was modified to 0.79 in TRM 3.0 (causing a negative effect of 21% on savings). 2) The NTG applied by the evaluation team and stipulated by the commission (63%) is significantly lower than the NTG used in planning assumptions (86%). Table 6 and Table 7 present these findings. Table Residential High Efficiency Lighting Program Participation* Participation Goal Reported Participation Percent of Participation Achieved % * Participation is defined as the number of individual customers that requested and received a four-pack of bulbs. Table Residential High Efficiency Lighting Program Net kwh and kw Savings Energy Type Program Net Savings Goal* Evaluated Net Savings Percent of Goals Achieved kwh 53,870 27,806 52% kw % * These numbers were reported in the portfolio plan. Program Impacts Review Cadmus impact analysis of the Residential High Efficiency Lighting Program consisted of verifying that the number of distributed bulbs was consistent with the number listed in the tracking database, 20

50 reviewing the claimed (ex ante) savings per bulb using the Arkansas TRM, and applying the APSCstipulated NTG value. Tracking Database Verification Cadmus compared Empire s tracking database against the summary of measures and savings provided by Empire to verify the number of bulbs distributed in 2013, and found that it was accurate (Table 8). Reported Quantity of Program Bulbs Table 8. Tracking Database Verification Results Confirmed Quantity of Program Bulbs Percent of Quantity Confirmed 1,720 1, % Evaluated Gross Savings Analysis and TRM Review Cadmus reviewed the CFL savings algorithms in Arkansas TRM Volume 3.0 and calculated ex post gross savings per bulb based on these algorithms. Table 9 and Table 10 compare the results of our Arkansas TRM review with the reported savings per bulb. The difference between the reported and gross savings per bulb is likely caused by a change in the program design that altered the type of qualified products from any CFL to only 13-watt CFLs. Measure Table 9. Gross Ex Ante and Ex Post Energy Savings per Bulb Ex Ante Energy Savings Per Bulb (kwh) Ex Post Energy Savings Per Bulb (kwh) 13-Watt CFL 43* 25.7 * This ex ante gross savings per bulb was cited in the 2011 Empire Arkansas Energy Efficiency Portfolio Filing. Measure Table 10. Gross Ex Ante and Ex Post Peak Demand Reduction per Bulb Ex Ante Demand Reduction Per Bulb (kw) Ex Post Demand Reduction Per Bulb (kw) 13-Watt CFL 0.005* * This ex ante gross savings per bulb was cited in the 2011 Empire Arkansas Energy Efficiency Portfolio Filing. Overall, the Residential High Efficiency Lighting Program realized 60% of its gross electricity savings goal and 111% of its gross demand savings goal. The difference between ex ante and ex post unit savings are solely attributable to changes between Version 2.0 and Version 3.0 of the Arkansas TRM interactive effects factor for energy and demand. 21

51 13-Watt CFL Cadmus calculated the energy savings (kwh) per 13-watt CFL as: (( ) We calculated the peak demand savings per 13-watt CFL as: (( (( ) (( Table 11 outlines the variable definitions, inputs, and sources Cadmus used to calculate the ex post savings per bulb. Table Watt CFL Algorithm Inputs and Sources Variable Definition Input Source W base Rated wattage of removed incandescent lamp 60 Arkansas TRM Volume II v3 W post Rated wattage of installed CFL 13 Program Materials 1,000 Conversion factor of watts to kilowatts 1,000 Assumed Hours Annual operating hours Arkansas TRM Volume II v3 ISR In-service rate 0.86 Arkansas TRM Volume II v3 IEF E Interactive effects factor for energy savings 0.79 Arkansas TRM Volume II v3 CF Peak coincidence factor 0.09 Arkansas TRM Volume II v3 IEF D Interactive effects factor for demand savings 1.53 Arkansas TRM Volume II v3 Net-to-Gross Cadmus assigned the APSC-stipulated NTG value of 63% to the Residential High Efficiency Lighting Program. 16 Table 12 shows the net savings per bulb. Measure NTG Table 12. Net Energy Savings per Bulb Gross Ex Post Energy Savings Per Bulb Net Energy Savings Per Bulb Gross Ex Post Demand Reduction Per Bulb Net Demand Reduction Per Bulb 13-Watt CFL 63% Per APSC Docket No R Order No. 15, dated March 7,

52 Evaluation Findings and Conclusions The following sections present the evaluation findings. Under each topic area heading, we present a concluding statement, followed by findings that support the concluding statement. Status of 2012 Recommendations Limited resources hindered Empire s ability to complete the 2012 recommendations. The energy-efficiency coordinator reported that Empire was restricted by a lack of resources to fully pursue the recommendations provided in the 2012 evaluation report (see Table 13). However, partial progress was made on our recommendation to explore additional relevant technologies. Table Status of 2012 Residential High Efficiency Lighting Program Recommendations 2012 Recommendation 2013 Status Explore adding measures to the program, such as specialty CFLs or other high-efficiency technologies. Leverage the postcard to inquire about other potential technologies or program features that may be of interest to customers. For example, include checkboxes for customers to indicate the types of equipment in their home that may need to be replaced in the next one to three years (e.g., refrigerator, air conditioner) or the types of energy-efficiency technologies they want to learn more about (e.g., advanced power strips, programmable thermostats). Continue to reach out to potential retail partners (e.g., smaller, independently owned grocery and hardware stores) to identify energy-efficiency measures they would be willing to carry and to establish agreements for them to accept Empire coupons. At a minimum, collect the quantity, wattage, lumens, and types of bulbs distributed. Consider tracking additional variables, such as the wattage of replaced bulbs, locations of installations, and whether the bulbs were installed or put into storage. In Progress/Partial. Empire completed an integrated resource plan for its Missouri territory and is exploring additional lighting measures, which it may apply to the next program cycle in Arkansas. Complete (Considered/Rejected). To remain as costeffective as possible, Empire leveraged the same postcard design as they had used in N/A. Empire adjusted the program delivery method to address challenging marketing conditions and now sends bulbs directly to interested customers. N/A. Empire only sends out one type of bulb. Complete (Considered/Rejected). Program staff confirmed that completing this recommendation would require additional customer outreach, and therefore cost. Program Performance The Residential High Efficiency Lighting Program continued to perform well. The program achieved 179% of its participation target, 101% of its demand reduction goal, and 52% of its net energy savings target. Program staff attributed the successfully meeting of participation goals to the fact that the program entails no cost and minimal effort from customers. The fact that Empire 23

53 exceeded its participation target while under-performing against its energy savings goals reflects lower per unit savings than those assumed in Empire s program plan. Empire s over-estimation of savings can be attributed primarily to an NTG value of 0.86 in its planning assumptions as opposed to the APSCstipulated value of See Table 6 and Table 7 above for detailed information on savings and participation in Recommendations Cadmus did not identify any program-specific recommendations for the Residential High Efficiency Lighting Program in

54 Program Description School Based Energy Education Program Through the School Based Energy Education Program, Empire conducts energy-efficiency education and provides direct install measures to middle school students within its service territory. Empire provides energy-efficiency kits with low-cost measures for students to install in their homes, including: a highefficiency showerhead, kitchen sink aerator, two 13-watt CFLs, FilterTone alarm, LimeLite night light, digital thermometer, toilet leak tablets, flow rate test bag, natural resource fact chart, tape measure, program evaluation form, a GetWise wristband, and an insert highlighting Empire s energy efficiency programs. In addition to the kit, students receive unlimited access to an interactive program website and a toll-free help line where they can ask questions. Furthermore, Empire provides teachers with teaching aids and supplemental materials, such as a teacher book, step-by-step program checklist, lesson plans, program videos, program evaluation forms, an Arkansas State Education Standards Correlation Chart, a pre-test and post-test answer key, and electricity, water, and natural gas posters that can be used to increase student awareness of and appreciation for energy efficiency. Program Status Overview The School Based Energy Education Program had a successful year, with efficiency kits being distributed to 350 sixth grade and 300 eighth grade teachers, students, and their families. 17 The program achieved 1,224% of its demand goal and nearly met its participation target. However, the program only achieved 50% of its net energy-savings goal, primarily due to differences between the reported and evaluated savings per kit. As was the case with Empire s Residential High Efficiency Lighting Program, adjusting TRM 2.0-based reported savings to comply with the algorithms and inputs in Arkansas TRM 3.0 for decreased the savings achieved by several kit measures, particularly those that address water and lighting end uses. These results are also indicative of the fact that Empire s program plan assumed higher per unit energy savings and significantly lower per unit demand reductions than the measures produce in real-world applications. Table 14 and Table 15 summarize the program-level participation, as well as the ex post verified and net energy and peak demand savings compared to the program energy-savings goals. Table School Based Energy Education Program Participation Goals* Participation Goal Reported Participation Percent of Participation Achieved % * Participation is defined as the number of individual kits distributed. 17 According to the Empire District Electric LivingWise Program Summary Report, spring 2013, page 5. 25

55 Table School Based Energy Education Program Net kwh and kw Savings Energy Type Program Net Savings Goal* Evaluated Net Savings Percent of Goals Achieved kwh 191,835 95,761 50% kw ,224% * These numbers were reported in the portfolio plan. Program Impact Review Cadmus conducted an impact analysis of the School Based Energy Education Program, which consisted of verifying that the number of distributed kits was consistent with the tracking database, reviewing the ex ante savings per kit measure, and applying a NTG value. Tracking Database Verification Cadmus reviewed Empire s tracking against the summary of measures and savings provided by Empire to verify the number of kits distributed in 2013, and found that it was accurate (Table 16). Reported Quantity of Kits Table 16. Tracking Database Verification Results Confirmed Quantity of Kits Percent of Quantity Confirmed % Evaluated Gross Savings Analysis and TRM Review To determine the gross ex post evaluated savings from the energy-efficiency kits, Cadmus reviewed each kit measure using the values in the Arkansas TRM Version 3.0. Table 17 and Table 18 compare our evaluated savings per kit measure to the reported savings. The evaluated energy savings (kwh) and demand reduction (kw) per kit include verified installation rate adjustments. Note that the reported kwh and kw savings were only available at the total kit level and not at a measure level. Table 17. Gross Ex Ante and Ex Post Energy Savings per Kit Gross Ex Ante Reported Gross Ex Post Evaluated Measure kwh Savings Per Kit kwh Savings Per Kit Two 13-Watt CFLs N/A High-Efficiency Showerhead (2.0 gpm) N/A Kitchen Aerator (1.5 gpm) N/A FilterTone Alarm N/A LimeLite Night Light N/A Total Per Kit 315* * This ex ante savings per kit was listed in the portfolio filing. 26

56 Measure Table 18. Gross Ex Ante and Ex Post Peak Demand Savings per Kit Gross Ex Ante Reported kw Savings Per Kit Gross Ex Post Evaluated kw Savings Per Kit Two 13-Watt CFLs N/A High-Efficiency Showerhead (2.0 gpm) N/A Kitchen Aerator (1.5 gpm) N/A FilterTone Alarm N/A LimeLite Night Light N/A Total Per Kit * * This ex ante savings per kit was listed in the portfolio filing. Overall, the program realized 58% and 1,426% of its gross kwh and kw savings, respectively. The lower gross electricity realization rate for the school kits was mainly driven by changes between the Arkansas TRM Version 2.0 and Version 3.0. The Version 3.0 methodology produces lower expected savings for high-efficiency showerheads and faucet aerators. Specific examples of these differences can be found below. 13-Watt CFL Cadmus calculated the energy savings (kwh) per 13-watt CFL as: (( ) We calculated the peak demand savings per 13-watt CFL as: (( (( ) (( Table 19 outlines the variable definitions, inputs, and sources Cadmus used to calculate the ex post savings per bulb. 27

57 Table Watt CFL Algorithm Inputs and Sources Variable Definition Inputs Source W base Rated wattage of removed incandescent lamp Student Surveys (Resource Action Programs (RAP) Report) W post Rated wattage of installed CFL 13 Program Materials 1,000 Conversion factor of watts to kilowatts 1,000 Assumed Hours Annual operating hours Arkansas TRM Volume II v3 ISR In-service rate 0.68 Student Surveys (RAP Report) IEF E Interactive effects factor for energy savings 0.79 Arkansas TRM Volume II v3 CF Peak coincidence factor 0.09 Arkansas TRM Volume II v3 IEF D Interactive effects factor for demand savings 1.53 Arkansas TRM Volume II v3 High-Efficiency Showerhead Cadmus calculated the energy savings (kwh) per high-efficiency showerhead as: ( ) ( ( ( We calculated the peak demand savings per high-efficiency showerhead as: Showerhead savings are lower than planned savings due to changes in algorithms and inputs between TRM versions 2.0 and 3.0. For example, version 2.0 provided a higher volume (V) of water for a 2.0 gallon-per-minute (gpm) showerhead than version 3.0. Additionally, in TRM 2.0, the algorithm factored in the temperature set point of the water heater whereas in TRM 3.0, a mixed hot-and-cold water variable was used. Both of these changes resulted in downward adjustments to planned energy savings. Table 20 outlines the variable definitions, inputs, and sources Cadmus used to calculate the ex post savings per showerhead. 28

58 Table 20. High-Efficiency Showerhead Algorithm Inputs and Sources Variable Definition Inputs Source p Water density 8.33 Arkansas TRM Volume II v3 C p Specific heat of water 1 Arkansas TRM Volume II v3 V Volume of water saved per year (2.0 gpm) 1,457 Program Materials and Arkansas TRM Volume II v3 T Mixed Mixed water temperature Arkansas TRM Volume II v3 T Supply Average supply water temperature 65.6 Arkansas TRM Volume II v3 RE Recovery efficiency 0.98 Arkansas TRM Volume II v3 Conversion Factor 3,412 Btu/kWh 3,412 Arkansas TRM Volume II v3 ISR Installation rate 0.58 Student Surveys (RAP Report) EHW saturation Electric water heater saturation 0.60 Student Surveys (RAP Report) Peak Ratio Ratio of peak kw to annual kwh Arkansas TRM Volume II v3 Kitchen Aerator Cadmus calculated the energy savings (kwh) per kitchen aerator as: ( ) ( ( ( We calculated the peak demand savings per kitchen aerator as: Faucet aerator savings were lower than planned savings due to changes in algorithms and inputs between the TRM versions 2.0 and 3.0. Specifically, the TRM 2.0 algorithm factored in the temperature set point of the water heater, whereas TRM 3.0, uses a mixed hot-and-cold water variable. it is not known whether Empire applied an installation rate and an electric water heater saturation factor to these measures in the planning phase; this would also affect evaluated savings results. Table 21 outlines the variable definitions, inputs, and sources Cadmus used to calculate the ex post savings per kitchen aerator. 29

59 Table 21. Faucet Aerator Algorithm Inputs and Sources Variable Definition Inputs Source p Water density 8.33 Arkansas TRM Volume II v3 C p Specific heat of water 1 Arkansas TRM Volume II v3 V Volume of water saved per year (1.5 gpm) 381 Program Materials and Arkansas TRM Volume II v3 T Mixed Mixed water temperature 102 Arkansas TRM Volume II v3 T Supply Average supply water temperature 65.6 Arkansas TRM Volume II v3 RE Recovery efficiency 0.98 Arkansas TRM Volume II v3 Conversion Factor 3,412 Btu/kWh 3,412 Arkansas TRM Volume II v3 ISR Installation rate 0.55 Student Surveys (RAP Report) EHW saturation Electric water heater saturation 0.60 Student Surveys (RAP Report) Peak Ratio Ratio of peak kw to annual kwh Arkansas TRM Volume II v3 FilterTone Alarm Filter alarms are not included in the Arkansas TRM Version 3.0; however, the program implementer, RAP, calculated the alarm electricity savings by referencing participant survey data. Cadmus reviewed RAP s calculations and deemed them acceptable. RAP evaluated the gross electricity savings (kwh) per FilterTone Alarm as: RAP s report did not include demand calculations, therefore, the evaluation team deemed that the most reliable and cost-effective approach was to draw from the findings of a current evaluation of a similar program sponsored by a Midwestern utility. The results from that evaluation yield demand savings of kw per alarm. Table 22 outlines the variable definitions, inputs, and sources RAP used to calculate the ex post savings per FilterTone Alarm. Table 22. FilterTone Alarm Algorithm Inputs and Sources Variable Definition Inputs Source kwh CAC Annual electricity use by a central air conditioning system 5,661 U.S. Department of Energy E gain Projected increase in efficiency (electricity) Howard (1999) ISR In-service rate 0.52 Student Surveys (RAP Report) 30

60 Limelight LED Nightlight LED nightlights are not included in the Arkansas TRM Version 3.0; however, RAP calculated the savings achieved for each nightlight by referencing participant survey data. Cadmus reviewed RAP s calculations and deemed them acceptable. RAP evaluated the gross electricity savings (kwh) per Limelight LED Nightlight as: (( (( ) LED nightlights do not generate any demand savings, as they are only used at night, outside of peak hours. Table 23 outlines the variable definitions, inputs, and sources RAP used to calculate the ex post savings per Limelight LED Nightlight. Table 23. Limelight LED Nightlight Algorithm Inputs and Sources Variable Definition Inputs Source W base Rated wattage of removed nightlight 7 RAP Assumption W post Rated wattage of installed LED nightlight 0.03 Program Materials 1,000 Conversion factor of watts to kilowatts 1,000 Assumed Hours Annual operating hours 4,380 RAP Assumption (12 hours per day) ISR In-service rate 0.90 Student Surveys (RAP Report) Net-to-Gross Table 24 provides the gross and net savings per efficiency kit. Cadmus assigned the APSC-stipulated NTG value of 80% per school kit distributed. 18 Measure Table 24. Net Energy Savings per Energy-Efficiency Kit NTG Gross Ex Post Energy Savings Per Kit Net Energy Savings Per Kit Gross Ex Post Demand Reduction Per Kit Net Demand Reduction Per Kit Energy-Efficiency Kit 80% Evaluation Findings and Conclusions The following sections present the evaluation findings. Under each topic area heading, we present a concluding statement, followed by findings that support the concluding statement. 18 Per APSC Docket No R Order No. 15, dated March 7,

61 Status of 2012 Recommendations Empires completed both 2012 recommendations. Despite a lack of resources, the energy-efficiency coordinator reported completing both of the School Based Energy Education Program recommendations provided in the 2012 evaluation report (Table 25). Table Status of 2012 School Based Energy Education Program Recommendations 2012 Recommendation 2013 Status At a minimum, collect and track the number of kits distributed, the schools participating, and specifications for all the kit measures, including the CFL wattages and the showerhead and faucet aerator gpm flow rates. Consider tracking additional types of variables, such as the wattage of replaced bulbs, use of the flow rate test bag provided in the kit, the flow rates before and after installation of the faucet aerator and showerhead, which kit measures are installed, and the water heater fuel type of the household receiving the kit. Most of this information could be asked in the surveys distributed to students in the kit. Completed. Empire tracks the number of kits per school, the schools participating, and the specifications of each kit measure. Completed. RAP provided a report about these additional variables for the 2012 participants. Program Performance The School Based Energy Education Program continued to perform well; however, the 2013 expansion may negatively impact Empire s ability to achievable program participation in the future. As was discussed in the Program Status Overview section, the program exceeded its 2013 ex ante energy and demand reduction goals and participation targets; however, due to adjustments in the savings per kit, the program fell short of its ex post savings goals. 19 To capitalize on the success of the program in 2012, Empire increased the 2013 budget, which allowed RAP to provide every sixth and eighth grade student in the territory with a School Based Energy Education kit. Therefore, the middle school sector is currently nearly saturated, leaving Empire to target only sixth graders in 2014 and going forward. Thus, while the program was able to achieve its goals in 2013 by targeting students in two age groups, going forward half of the 2013 population of potential program participants will not be available. Data Tracking and Reporting Tracking for the School Based Energy Education Program was sufficient for evaluation. Empire, in collaboration with the program implementer (RAP), collected and tracked the number of kits distributed and the schools participating (along with facility staff contact information). Also, the program materials included the specifications for each kit measure, including the CFL wattages and gpm 19 See Table 14 and Table 15 for detailed information on savings and participation results. 32

62 flow rates for the showerhead and faucet aerator. Furthermore, RAP provided data on the rate of participating students installation of direct install measures. Recommendations Review future program goals to ensure they reflect the potential participant population. As stated by the energy-efficiency coordinator, while the significant expansion of kit distribution in 2013 resulted in admirable savings, the achievable participation and therefore savings may be limited in 2014 and beyond when the program is restricted to sixth graders. 33

63 Program Description High Efficiency Air Conditioning Program Through the High Efficiency Air Conditioning Program, Empire provides residential and small commercial (< 40 kw per year) customers with financial incentives through mail-in rebate applications to encourage their purchase and installation of the following energy-efficient air conditioning equipment: Central air conditioners (CACs) with a SEER of 15 or above. Air-source heat pumps (ASHPs) with an equivalent energy rating of a SEER 15 or above. Room air conditioners with an ENERGY STAR rating. Programmable thermostats purchased from and installed by the contractor who installs the new cooling system. In addition to the financial incentives, Empire also provides local contractors with the opportunity to attend relevant HVAC training. However, no contractors in the Arkansas service territory attended trainings in Program Status Overview Although the High Efficiency Air Conditioning Program did not meet its energy savings, demand reduction, or participations goals, the program did show slight signs of gaining customer attention in 2013 over 2012, when no customers participated. Table 26 and Table 27 summarize the participation and program-level ex post verified and net energy and peak demand savings compared with the program energy-savings goals. Measure Table High Efficiency Air Conditioning Program Participation Goals* Tracking Database Measure Name Participation Goal Reported Participation Percent of Participation Achieved CAC SEER 15 to 15.9 Central Air Conditioner % CAC SEER 16 to 16.9 Central Air Conditioner % CAC SEER 17 Ductless Mini-Split % ASHP SEER 15 to 15.9 Heat Pump % ASHP SEER 16 to 16.9 Heat Pump 2 0 0% ASHP SEER 17 Heat Pump 1 0 0% Programmable Thermostat Programmable Thermostat % Room Air Conditioner Room Air Conditioner % Total % * Participation is defined as the number of individual measures distributed in Empire offered these trainings in nearby Joplin, Missouri. 34

64 Table High Efficiency Air Conditioning Program Net kwh and kw Savings Energy Type Program Net Savings Goal* Evaluated Net Savings Percent of Goal Achieved kwh 33,285 4,942 15% kw % * These numbers were reported in the portfolio plan. Program Impact Review Cadmus conducted an impact analysis of the High Efficiency Air Conditioning Program, which consisted of verifying that the number of measures incented was consistent with the tracking database records, reviewing the ex ante savings per measure, and applying a NTG value. Tracking Database Verification Cadmus reviewed Empire s tracking database against the summary of measures and savings provided by Empire to verify the number of HVAC measures incented in 2013, and found that it was accurate (Table 28). Reported Quantity of Measures Table 28. Tracking Database Verification Results Confirmed Quantity of Measures Percent of Quantity Confirmed % Evaluated Gross Savings Analysis and TRM Review To determine the gross ex post evaluated savings from the High Efficiency Air Conditioning Program, Cadmus reviewed each measure contained in the database using the Arkansas TRM Version 3.0. Table 29 and Table 30 compare the results of the gross ex post savings per measure to ex ante savings. Table 29. Gross Ex Ante and Ex Post Energy Savings per Measure Gross Ex Ante Reported Gross Ex Post Evaluated Measure kwh Savings Per Measure* kwh Savings Per Measure Central Air Conditioner Ductless Mini-Split 1,030 1,787 Air Source Heat Pump 2,166 3,639 Programmable Thermostat * Cadmus derived these ex ante savings per measure from the 2011 Empire Arkansas Energy Efficiency Portfolio Filing. 35

65 Measure Table 30. Gross Ex Ante and Ex Post Peak Demand Savings per Measure Gross Ex Ante Reported kw Savings Per Measure* Gross Ex Post Evaluated kw Savings Per Measure Central Air Conditioner Ductless Mini-Split Heat Pump Programmable Thermostat * Cadmus derived these ex ante savings per measure from the 2011 Empire Arkansas Energy Efficiency Portfolio Filing. Overall, the High Efficiency Air Conditioning Program realized 147% of its reported gross electric savings and 75% of its gross reported demand-savings. Central Air Conditioners Cadmus evaluated the single CAC unit based on its size and seasonal energy efficiency ratio (SEER) using the deemed savings values from the Arkansas TRM Version 3.0. Tracking data (confirmed by model number lookup) demonstrated that the unit was a 3.0 ton, SEER 16. Based on this information, the Arkansas TRM Version 3.0 deemed that the savings are 752 kwh and 0.46 kw, which is consistent with the ex ante savings. Ductless Mini-Split Cadmus evaluated the ductless mini-split based on the unit size (1.5 tons), SEER, and heating seasonal performance factor (HSPF) using the deemed savings values from the Arkansas TRM Version 3.0. A model number lookup and tracking data demonstrated that the unit was a heat pump with a 19.3 SEER and had a HSPF above 9.0. Based on this information, the Arkansas TRM Version 3.0 deemed that the savings were 1,787 kwh 21 and 0.31 kw. Air-Source Heat Pump Cadmus evaluated the ASHP based on the unit size (3.5 tons), SEER, and HSPF using the deemed savings values from the Arkansas TRM Version 3.0. A model number lookup and tracking data demonstrated that the unit was SEER and had a HSPF of 9.0. Based on this information, the Arkansas TRM Version 3.0 deemed that the savings were 3,639 kwh 22 and 0.46 kw. Programmable Thermostat Programmable thermostats are no longer eligible to claim savings through a utility demand-side management program in Arkansas. As technologies have continued to advance, this measure is now considered to be industry standard This total is the sum of 543 kwh for the cooling savings and 1,244 kwh for the heating savings. This total is the sum of 737 kwh for the cooling savings and 2,902 kwh for the heating savings. 36

66 Net-to-Gross Table 31 provides the gross and net savings per measure. Cadmus assigned the APSC-stipulated NTG value of 80%. 23 Measure NTG Table 31. Net Energy Savings per Measure Gross Ex Post Energy Savings Per Measure Net Energy Savings Per Measure Gross Ex Post Demand Reduction Per Measure Net Demand Reduction Per Measure Central Air Conditioner 80% Ductless Mini-Split 80% 1,787 1, Air-Source Heat Pump 80% 3,639 2, Programmable Thermostat 80% Evaluation Findings and Conclusions The majority of the High Efficiency Air Conditioning Program findings and conclusions overlap with the ENERGY STAR Appliances Program, and were therefore included in the portfolio-level Evaluation Findings and Conclusions section. Those findings and conclusions outline trade ally limitations, budget expenditures, and data tracking. Program Performance Although the High Efficiency Air Conditioning Program s performance improved in 2013 it did not meet its goals. Although the program achieved only 5% of its participation target, 6% of its demand-reduction goal, and 15% of its net energy-savings target, this is an improvement over having no participants or savings in Program staff attributed the slight growth in program participation to the possible upturn in the Arkansas economy as well as increased marketing and cross-marketing efforts on the utility s part. See Table 26 and Table 27 in the Program Status Overview section for detailed information on participation and savings in Recommendations Cadmus did not identify any program-specific recommendations for the High Efficiency Air Conditioning Program in Per APSC Docket No R Order No. 15, dated March 7,

67 Program Description ENERGY STAR Appliances Program Through the ENERGY STAR Appliances Program, Empire provides residential and small commercial (< 40 kw per year) customers with financial incentives to encourage their purchase and installation of the following ENERGY STAR appliances: Dishwashers Dehumidifiers Refrigerators Smart strips (4-prong) Customers submit a rebate application and corresponding documentation to Empire, and then Empire reviews the application and mails a rebate back to the customer. Program Status Overview Although Empire did process a few ENERGY STAR Appliances Program rebate applications in 2013, the program was not able to meet its energy savings, demand reduction, or participation goals. However, participation improved in 2013 over 2012, when there were no participants. Table 32 and Table 33 summarize the participation and program-level ex post verified and net energy and peak demand savings compared with goals. Table ENERGY STAR Appliances Program Participation Versus Goals* Measure Participation Goal Reported Participation Percent of Participation Achieved Dishwasher % Dehumidifier % Refrigerator % Smart Strip (4-prong) % Total % * Participation is defined as the number of individual measures distributed in Table ENERGY STAR Appliances Program Net kwh and kw Savings Energy Type Program Net Savings Goal* Evaluated Net Savings Percent of Goals Achieved kwh 54, % kw % * These numbers were reported in the portfolio plan. 38

68 Program Impact Review Cadmus impact analysis of the ENERGY STAR Appliances Program consisted of verifying that the number of measures incented were consistent with those listed in the tracking database, reviewing the ex ante savings per measure, and applying a NTG value. Tracking Database Verification Cadmus reviewed Empire s tracking database against the summary of measures and savings provided by Empire to verify the number of appliance measures incented in 2013, and found that it was accurate (Table 34). Reported Quantity of Measures Table 34. Tracking Database Verification Results Confirmed Quantity of Measures Percent of Quantity Confirmed % Evaluated Gross Savings Analysis and TRM Review To determine the gross ex post evaluated savings from the ENERGY STAR Appliances Program, Cadmus reviewed each measure contained in the database using the Arkansas TRM. Table 35 and Table 36 compare the results of the gross ex post savings per measure to ex ante savings. Table 35. Gross Ex Ante and Ex Post Energy Savings per Measure Gross Ex Ante Reported Gross Ex Post Evaluated Measure kwh Savings Per Measure* kwh Savings Per Measure Dishwasher Refrigerator * This ex ante gross savings per bulb was cited in the 2011 Empire Arkansas Energy Efficiency Portfolio Filing. Measure Table 36. Gross Ex Ante and Ex Post Peak Demand Savings per Measure Gross Ex Ante Reported kw Savings Per Measure* Gross Ex Post Evaluated kw Savings Per Measure Dishwasher Refrigerator * This ex ante gross savings per bulb was cited in the 2011 Empire Arkansas Energy Efficiency Portfolio Filing. Dishwashers The Arkansas TRM Version 3.0 provides deemed savings values for dishwashers that are dependent on water fuel type. As the water fuel type for each of the three dishwasher participants was unavailable, Cadmus deferred to the ratio of electric and non-electric water heater fuel types cited in RAP s evaluation report of the 2012 School Based Energy Education Program. The students in that program 39

69 filled out surveys revealing that 60% of the population had electric water heaters (n= 355). 24 Cadmus applied this water heater fuel type ratio to the TRM deemed values to produce gross ex post savings of 45.2 kwh and kw for each dishwasher sold through the ENERGY STAR Appliances Program (Table 37). Table 37. Arkansas TRM Version 3.0 Deemed Dishwasher Savings Water Heater Fuel Type kwh Savings per Unit kw Savings per Unit Gas Electric Refrigerators The Arkansas TRM Version 3.0 provides a method for calculating unit energy savings for refrigerators that requires inputting the volume of the refrigerator that was replaced. As this data was unavailable, Cadmus deferred to the Arkansas TRM Version 1.0, which provides deemed savings based on whether a refrigerator was replaced when the existing unit burned out, or whether the existing unit was replaced early (while it was still functional). Table 38 shows the deemed savings by replacement type. Table 38. Arkansas TRM Version 1.0 Deemed Refrigerator Savings Replacement Type kwh Savings per Unit kw Savings per Unit On Failure Early As the replacement type data was unavailable, Cadmus assumed that all participants replaced their refrigerators on failure of the existing unit, and assigned 123 kwh and kw to each refrigerator. This assumption is consistent with the approach we used to evaluate the Entergy Arkansas and SWEPCO efficiency portfolios. Net-to-Gross Table 39 provides the gross and net savings per ENERGY STAR appliance measure. Cadmus assigned the APSC-stipulated NTG value of 80% The 2009 census data show that 54.8% of homes in Arkansas, Louisiana, and Oklahoma have electric water heaters; however, Cadmus chose to use the saturation of electric water heaters from the student surveys since it is more representative of Empire s actual Arkansas service territory. Per APSC Docket No R Order No. 15, dated March 7,

70 Measure NTG Table 39. Net Energy Savings per Measure Gross Ex Post Energy Savings Per Measure Net Energy Savings Per Measure Gross Ex Post Demand Reduction Per Measure Net Demand Reduction Per Measure Dishwasher 80% Refrigerator 80% Evaluation Findings and Conclusions The majority of the ENERGY STAR Appliances Program findings and conclusions overlap with the High Efficiency Air Conditioning Program, and were therefore included in the portfolio-level Evaluation Findings and Conclusions section. Those findings and conclusions outline trade ally limitations, budget expenditures, and data tracking. Program Performance Although the ENERGY STAR Appliances Program s performance slightly improved in 2013, it did not meet its goals Although the program achieved only 7% of its participation target, 1% of its demand-reduction goal, and 1% of net energy-savings target, this represents an improvement over having no participants or savings in Program staff attributed the slight growth in participation to the upturn in the Arkansas economy. See Table 32 and Table 33 in the Program Status Overview section for detailed information on participation and savings in Recommendations Cadmus did not identify any program-specific recommendations for the ENERGY STAR Appliances Program in

71 Program Description Residential Weatherization Program The Residential Weatherization Program was a new Empire offering in partnership with OG&E in Through this program, Empire provides free low-cost home weatherization improvements to customers within its service territory. These services are implemented by trained third-party contractors who work with OG&E and Empire. Program Status Overview The program did not officially launch until the fourth quarter of 2013, but managed to gain nearly immediate traction with customers. Given the late launch the program did admirably well, achieving 51% of its energy savings, 69% of its demand reduction, and 51% of its participations goals. Table 40 and Table 41 summarize the participation by measure, as well as the program-level ex post verified and net energy and peak demand savings compared with the program energy-savings goals. 42

72 Measure Table Residential Weatherization Program Internal Participation Target Participation Goals* (Households) Reported Participation Percent of Participation Achieved Attic Insulation (gas & electric) % Attic Insulation (electric) % Air Infiltration (gas &electric) % Air Infiltration (electric) % Water Heater Blankets (gas) 2 0 0% Water Heater Blankets (electric) 0 0 0% Pipe Insulation (gas) % Pipe Insulation (electric) 2 0 0% Air Conditioning Window Unit 2 0 0% Air Conditioning Tune-Up 6 0 0% CFLs % Refrigerator Replacement 8 0 0% Duct Sealing (gas &electric) 1 0 0% Duct Sealing (electric) 1 0 0% Total 108** 55 51% * These numbers were reported in the portfolio planning. ** The reported goal is based on household participation; however the program encourages the installation of multiple measures per home. Energy Type Table Residential Weatherization Program Net kwh and kw Savings Internal Program Net Savings Target* Evaluated Net Savings Percent of Internal Goals Achieved kwh 46,256 23,817 51% kw % * These numbers were reported in the portfolio planning. Program Impact Review Cadmus conducted an impact analysis of the Residential Weatherization Program, which consisted of verifying that the number of measures distributed and projects completed were consistent with those listed in the tracking database, reviewing the ex ante savings per measure, and applying a NTG value. Tracking Database Verification Cadmus reviewed Empire s tracking database against the summary of measures and savings provided by Empire to verify the number of appliance measures incented in 2013, and found that it was accurate (Table 42). 43

73 Reported Quantity of Measures Table 42. Tracking Database Verification Results Confirmed Quantity of Measures Percent of Quantity Confirmed % Evaluated Gross Savings Analysis and TRM Review To determine the gross ex post evaluated savings from the Residential Weatherization Program, Cadmus reviewed most measures in the database using the Arkansas TRM Version 3.0. However, for attic insulation, we used inputs resulting from a TRM review of residential attic insulation participants from Entergy s Home Energy Solutions (HES) Program as a proxy to calculate insulation savings in Empire s territory. 26 Table 43 and Table 44 compare the results of the gross ex post savings per measure to ex ante savings. Measure Table 43. Gross Ex Ante and Ex Post Energy Savings per Unit Quantity Gross Ex Ante Reported kwh Savings Per Unit* Gross Ex Post Evaluated kwh Savings Per Unit Attic Insulation (gas & electric)** 14, Attic Insulation (electric)** 1, Air Infiltration (gas & electric)*** 13, Air Infiltration (electric)*** 1, Pipe Insulation (gas) w-12w CFL w-17w CFL w-25w CFL w-32w CFL * Cadmus derived these ex ante savings per measure from the 2011 Empire Arkansas Energy Efficiency Portfolio Filing. ** These units are in square feet. *** These units were measured in CFM. 26 Entergy participants were used in lieu of Empire participants due to a lack of necessary information (such as R- Values) in the tracking database. 44

74 Measure Table 44. Gross Ex Ante and Ex Post Peak Demand Savings per Measure Quantity Gross Ex Ante Reported kw Savings Per Unit* Gross Ex Post Evaluated kw Savings Per Unit Attic Insulation (gas & electric)** 14, Attic Insulation (electric)** 1, Air Infiltration (gas & electric)*** 13, Air Infiltration (electric)*** 1, Pipe Insulation (gas) w-12w CFL w-17w CFL w-25w CFL w-32w CFL * Cadmus derived these ex ante savings per measure from the 2011 Empire Arkansas Energy Efficiency Portfolio Filing. ** These units are in square feet. *** These units were measured in CFM. Attic Insulation Cadmus cited the TRM review results from Entergy s HES Program to calculate savings from attic insulation. The current Empire tracking system does not provide pre-installation R-Values for each participant. Because the pre-installation R-Value is a required input to calculate savings using the algorithm in Arkansas TRM Version 3.0, it was not feasible for Cadmus to calculate TRM-based savings for this measure. Instead, we used the average savings per square foot of attic insulation installed by Entergy s HES customers: 3.56 kwh and kw for electric only customers, and 1.03 kwh and kw for combined electric and gas customers. Air Infiltration Cadmus evaluated air infiltration using the deemed savings values cited in the Arkansas TRM Version 3.0. The TRM provides deemed savings values based on weather zone (Empire is in weather zone 9) and heating type. We made no changes to the ex ante reported savings for air infiltration of 2.47 kwh and kw for electrically heated/cooled homes and 0.19 kwh and kw for gas and electrically heated/cooled homes. Pipe Insulation The program installed pipe insulation in nine homes, all of which had gas-fueled water heaters; therefore, there are no program electric savings for this measure. 45

75 CFLs Cadmus calculated the energy savings (kwh) per CFL as: (( ) (( ) We calculated the peak demand savings per CFL as: (( ) (( ) Table 45 outlines the variable definitions, inputs, and sources Cadmus used to calculate the ex post savings per bulb. Table 45. CFL Algorithm Inputs and Sources Variable Definition Inputs Source 9w-12w W base Rated wattage of removed incandescent lamp 40 Arkansas TRM Volume II v3 9w-12w W post Rated wattage of installed CFL 10.5 Median of bulb wattage* 13w-17w W base Rated wattage of removed incandescent lamp 60 Arkansas TRM Volume II v3 13w-17w W post Rated wattage of installed CFL 15 Median of bulb wattage* 18w-25w W base Rated wattage of removed incandescent lamp 53** Arkansas TRM Volume II v3 18w-25w W post Rated wattage of installed CFL 21.5 Median of bulb wattage* 26w-32w W base Rated wattage of removed incandescent lamp 72** Arkansas TRM Volume II v3 26w-32w W post Rated wattage of installed CFL 29 Median of bulb wattage* 1,000 Conversion factor of watts to kilowatts 1,000 Assumed Hours Annual operating hours Arkansas TRM Volume II v3 ISR In-service rate 0.86 Arkansas TRM Volume II v3 IEF E Interactive effects factor for energy savings 0.79 Arkansas TRM Volume II v3 CF Peak coincidence factor 0.09 Arkansas TRM Volume II v3 IEF D Interactive effects factor for demand savings 1.53 Arkansas TRM Volume II v3 * As the actual bulb wattage was not available, Cadmus calculated CFL savings using the median bulb wattage of the provided ranges. ** As all CFL installations occurred after June 2013, the Energy Independence Security Act of 2007 baseline changes apply to all 100-watt and 75- watt bulbs. Net-to-Gross Table 46 provides the gross and net savings per weatherization unit. Cadmus assigned the APSCstipulated NTG value of 80% for the weatherization measures and 63% for the program CFLs Per APSC Docket No R Order No. 15, dated March 7,

76 Measure Table 46. Net Energy Savings per Measure* NTG Gross Ex Post Energy Savings Per Unit Net Energy Savings Per Unit Gross Ex Post Demand Reduction Per Unit Net Demand Reduction Per Unit Attic Insulation (gas & electric) 80% Attic Insulation (electric) 80% Air Infiltration (gas & electric) 80% Air Infiltration (electric) 80% Pipe Insulation (gas) N/A w-12w CFL 63% w-17w CFL 63% w-25w CFL 63% w-32w CFL 63% * One unit defined as one square foot for insulation, CFM for air infiltration, and number of bulb for CFLs. Evaluation Findings and Conclusions The following sections present the evaluation findings. Under each topic area heading, we present a concluding statement, followed by findings that support the concluding statement. Program Performance The Residential Weatherization Program performed well in The program achieved 51% of its internal participation target, 69% of its demand-reduction target, and 51% of its net energy-savings target. Empire achieved this result in less than one month, indicating customer demand exists for these services, which bodes well for the program s future success. Program staff attributed the quick program uptake in participation to its design, which requires no cash outlay from customers. See Table 40 and Table 41 in the Program Status Overview section above for detailed information on participation and savings in Program Design The program design is a good fit for Empire s service territory and customer base. The energy-efficiency coordinator cited the importance of offering customers give-away programs that require little or no cash outlay and only a modest time investment to complete. He also noted that leveraging the skills of trade allies who also work with OG&E contributed to the program s promising start. Program Delivery and Implementation The program leverages committed trade allies and seeks to expand its reach. The energy-efficiency coordinator noted that the program relied on existing OG&E trade allies for implementation during the fourth quarter of However, Empire also conducted a kick-off 47

77 presentation in Decatur, Arkansas for interested local contractors to inform them of the new opportunities provided through the AC Tune-Up and Residential Weatherization Programs. Recommendations Cadmus did not identify any program-specific recommendations for the Residential Weatherization Program in

78 Program Description C&I Prescriptive Program Through the C&I Prescriptive Program, Empire provides energy-efficiency education and rebates to C&I customers that install, replace, or retrofit electric savings measures. Eligible measures include: Lighting 28 Chillers HVAC Motors and variable frequency drives (VFDs) The program includes a $20,000 cap per project, for the first nine months of each program year. If funds remain, Empire may allow a project to exceed the cap during the last quarter of the program year. Program Status Overview The program did not meet its energy savings, demand reduction, or participations goals. Table 47 and Table 48 summarize participation at a measure level and show the program-level ex post verified and net energy and peak demand savings compared with the program energy savings goals. Table C&I Prescriptive Program Participation Goals* Measure Group Participation Goal Reported Participation Percent of Participation Achieved Lighting % HVAC % Motors % VFDs % Total % * Participation is defined as the number of individual measures distributed in Table C&I Prescriptive Program Net kwh and kw Savings Energy Type Program Net Savings Goal* Evaluated Net Savings Percent of Goals Achieved kwh 481,263 21,218 4% kw % * These values were reported in the portfolio plan. 28 Lighting measures include: T5 fluorescent systems, high performance T8 lamp and ballast combinations, high bay fluorescent fixtures, and pulse-start metal halide lamps. 49

79 Program Impact Review Cadmus impact analysis of the C&I Prescriptive Program consisted of verifying that the number of measures distributed were consistent with those listed in the tracking database, reviewing the ex ante savings per measure, and conducting a NTG review. Tracking Database Verification Cadmus reviewed Empire s tracking database against the summary of measures and savings provided by Empire to verify the number of appliance measures incented in 2013, and found that it was accurate (Table 49). Reported Quantity of Measures Table 49. Tracking Database Verification Results Confirmed Quantity of Measures Percent of Quantity Confirmed % Evaluated Gross Savings Analysis and TRM Review To determine the gross ex post evaluated savings from the C&I Prescriptive Program, Cadmus reviewed each measure contained in the database using the Arkansas TRM Version 3.0. Table 50 and Table 51 compare the results of the gross ex post savings per measure to ex ante savings. As the TRM equations include the quantity of fixtures, these tables present measure-level savings (not unit level). To arrive at the unit energy savings per fixture, we divided the total gross ex post savings by the quantity of fixtures. Lighting Measure Table 50. Gross Ex Ante and Ex Post Energy Savings Quantity Gross Ex Ante Reported kwh Savings* Gross Ex Post Evaluated kwh Savings 4L T8 fixtures 24 7,216 5,961 2L T8 fixtures L HPT8 fixtures 47 18,057 14,916 Total 74 25,687 21,218 * Cadmus derived the ex ante savings per measure using data the tracking database. 50

80 Lighting Measure Table 51. Gross Ex Ante and Ex Post Peak Demand Savings Quantity Gross Ex Ante Reported kw Savings* Gross Ex Post Evaluated kw Savings 4L T8 fixtures L T8 fixtures L HPT8 fixtures Total * Cadmus derived the ex ante savings per measure using data the tracking database. Overall, the C&I Prescriptive Program realized 83% of gross electricity (kwh) savings and 108% of gross demand savings. The gross ex post electricity savings were lower than the ex ante savings due to a decrease in the annual operating hours (from 4,176 to 3,965 hours per year) between the ex ante and ex post calculations and the application of an interactive energy factor in the ex post calculations. Lighting Fixtures Cadmus calculated the energy savings (kwh) per set of lighting fixtures as: ([ ( ( ] [ ( ( ] ) ([ ] [ ] ) We calculated the peak demand savings per set of light fixtures as: ([ ( ( ] [ ( ( ] ) ([ ] [ ] ) Table 52 outlines the variable definitions, inputs, and sources Cadmus used to calculate the ex post savings per fixture group. Table 52. Light Fixture Algorithm Inputs and Sources Variable Definition Inputs Source N fixt(i) Explained in Table 53 W fixt(i) Explained in Table 53 1,000 Conversion factor for watts to kilowatts 1,000 Assumed AOH annual operating hours 3,965 Arkansas TRM Volume II v3 IEF E Interactive effects factor for energy savings 0.87 Arkansas TRM Volume II v3 CF Peak demand coincidence factor 0.90 Arkansas TRM Volume II v3 IEF D Interactive effects factor for demand savings 1.20 Arkansas TRM Volume II v3 51

81 Table 53 outlines the measure specific variable definitions, inputs, and sources Cadmus used to calculate the ex post savings. Variable Definition Table 53. Measure-Specific Light Fixture Algorithm Inputs and Sources 4L T8 Fixtures 2L T8 Fixtures 4L HPT8 Fixtures Source N pre Pre-retrofit number of fixtures of type Tracking Database N post Post-retrofit number of fixtures of type Tracking Database W pre W post Rated wattage of pre-retrofit fixtures of type Rated wattage of post-retrofit fixtures of type Tracking Database Tracking Database Net-to-Gross Table 54 provides gross and net savings per lighting fixture measure. Cadmus called the one participant who purchased all 74 lighting fixtures through the program and asked about the influence of the program on his decision to participate. The respondent claimed that the program was very influential and that he would not have conducted the retrofits in the same year or to the same efficiency level without the program. Therefore, Cadmus prescribed a NTG of 100% for all lighting measures incented through the C&I Prescriptive Program. Measure NTG Table 54. Net Energy Savings per Measure Gross Ex Post Energy Savings Net Energy Savings Gross Ex Post Demand Reduction Net Demand Reduction 4L T8 fixtures 100% 5,961 5, L T8 fixtures 100% L HPT8 fixtures 100% 14,916 14, Evaluation Findings and Conclusions The following sections present the evaluation findings. Under each topic area heading, we present a concluding statement, followed by findings that support the concluding statement. Program Performance Although the C&I Prescriptive Program s performance slightly improved in 2013, the program was not able to meet its goals Although the program achieved 74% of its participation target, it only achieved 5% of its demandreduction goal and 4% of net energy-savings target. The significantly higher rate of participant achievement than savings achievement indicates the program generates considerably less savings per measure than Empire anticipated. However, given that 100% of participants installed lighting-only 52

82 projects, it is not surprising. However, this was an improvement over no participants or savings in Program staff attributed the slight growth in achieved program savings to the recruitment of several new commercial lighting contractors. See Table 47 and Table 48 in the Program Status Overview section above for detailed information on participation and savings in Expanded trade ally recruitment was critical to participation. Although the program did achieve its first completed project, it was far from meeting its savings and participation goals. Empire s energy-efficiency coordinator made repeated efforts to engage local contractors in 2013, and successfully recruited several new commercial lighting contractors. This effort led to one new trade ally successfully deploying one completed C&I project. However, significantly more trade ally activity is required to meet the program s participation and savings targets. Recommendations Cadmus did not identify any program-specific recommendations for C&I Prescriptive Program in

83 Appendix X - 1 Empire District encourages customers to use energy saving tools to lower their usage and control their bills. Utilizing compact fluorescent light bulbs (CFLs) is an easy smart energy solution. THE BENEFITS OF CFLS INCLUDE: n using up to 75 percent less energy n lasting up to ten times longer than incandescent bulbs n saving up to $30 in energy costs over the life of a bulb Plus, if every home in America replaced a single bulb with a CFL, enough energy would be saved to light three million homes for a year. Empire customers in Arkansas can receive a complimentary four-pack of CFLs simply by filling out the survey information and returning the card to Empire by November 15, These 13-watt bulbs will replace 60-watt incandescent bulbs. For more information about energy saving programs offered by Empire, visit and click on the Smart Energy Solutions tab. Name: Mailing Address: Phone Number: Are you interested in receiving a free four-pack of CFLs from Empire?... n Yes If no, why not? If yes, would you plan on installing all four CFL s upon receipt?... n Yes Signature: CFLs are available on a first-come, first-served basis. Supplies are limited to the first respondents. Customers who indicate they are not interested in CFLs will not receive a complimentary four-pack. n No n No Arkansas Survey Insert.indd 1 9/24/13 6:02:39 AM

84 Appendix X - 1 EMPIRE DISTRICT ELECTRIC COMPANY ENERGY EFFICIENCY PROGRAMS PO BOX 127 JOPLIN, MISSOURI Arkansas Survey Insert.indd 2 9/24/13 6:02:40 AM

85 Appendix X - 2 ARKANSAS CENTRAL AIR CONDITIONER REBATE PROGRAM INFORMATION & APPLICATION SERVICES YOU COUNT ON The Empire District Electric Company can help its Arkansas residential and small commercial customers afford a high efficiency central air conditioning or heat pump system through the Central Air Conditioning Rebate Program. Not only will you receive a rebate, you will also enjoy the benefits of higher efficiency equipment which could mean reduced electricity consumption and lower costs. Why is Empire District making this offer? Air conditioner efficiency is important because units with higher efficiencies assist in reducing the peak demand placed on the electrical system during the summer months. Reduced peak electric demand helps us to keep power costs down now and in the future. How does it work? Install a new system while this program is in effect and a rebate from Empire District will cover a portion of the incremental cost of the higher efficiency equipment: Equipment Rating Air Conditioner Rebate Amount or Heat Pump SEER* of 15 to 15.9 $400 SEER of 16 to 16.9 $450 SEER of 17 or higher $500 Programmable thermostat installed with qualifying equipment The application and accompanying $25 documents must be received within 60 days of installation. *SEER (seasonal energy efficiency ratio) measure how efficiently a residential central cooling system (air conditioner or heat pump) will operate over an entire cooling season. A higher SEER reflects a more efficient cooling system. What do I do to qualify for a rebate? Complete the following application form. Provide an invoice from the installing contractor that includes the applicant's name, the physical address of the equipment installation, date of purchase, dealer's name and address, the manufacturer and model number of the outdoor unit, indoor unit, and furnace. Provide an AHRI Certificate of Product Ratings or manufacturer's literature verifying the SEER of the installed equipment, provide by the installing contractor. Provide a copy of the summary of the Manual J (or industry equivalent) load calculation performed on this residence or commercial facility-application cannot be processed without load calculation information included. o o o o Rebates are available on a "first-come, first-served" basis, as long as funds last, to Arkansas builders and residential customers of The Empire District Electric Company and to owners of residential rental property. For additional information, you may contact The Empire District Electric Company by phone at atenergy.efficiency@empiredistrict.com THE EMPIRE DISTRICT ELECTRIC COMPANY or by

86 Appendix X - 2 ARKANSAS ENERGY STAR APPLICANCE REBATE PROGRAM SERVICES YOU COUNT ON The Empire District Electric Company (Empire) can help its Arkansas residential and small business customers by providing rebates for the following ENERGY STAR products: dishwashers, dehumidifiers, refrigerators, room air conditioners, and smart power strips. Not only will you receive a rebate, you will also enjoy the benefits of higher efficiency equipment, which could mean reduced electricity consumption and lower costs. Why is Empire making this offer? Appliance efficiency is important. ENERGY STAR appliances assist in reducing the demand placed on the electrical system, generally have a lower operating cost, and are more environmentally-friendly. How does it work? Install a new ENERGY STAR appliance while this program is in effect and, with proper documentation, will provide a rebate to help offset a portion of the cost of the higher-efficiency equipment: Empire Appliance Rebate Dishwasher $50 Dehumidifier $50 Refrigerator $50 Room Air Conditioner $25 Smart Power Strip $10 How do I qualify for a rebate? 1. Complete the following application form for an Energy Star appliance included in this program. 2. For ENERGY STAR refrigerators, dishwashers, room air conditioners, and dehumidifiers, provide a copy of your sales receipt, as well as the yellow Energy Guide tag attached to the equipment. 3. For ENERGY STAR 4-prong smart strips, provide a copy of your sales receipt. The application and accompanying documents must be received within 60 days of purchase. Please note, failure to complete the form correctly and/or provide required documentation may result in the application being delayed or denied. Rebates are available on a "first-come, first-served" basis, as long as funds last, to Arkansas residential and small commercial customers of The Empire District Electric Company. For additional information, you may contact The Empire District Electric Company by phone at or by atenergy.efficiency@empiredistrict.com. THE EMPIRE DISTRICT ELECTRIC COMPANY

87 Appendix X - 2 ARKANSAS RESIDENTIAL WEATHERIZATION PROGRAM INFORMATION & APPLICATION SERVICES YOU COUNT ON The Empire District Electric Company is offering a new, no-cost weatherization energy efficiency program to qualified residential customers in Arkansas. This program has been approved by the Arkansas Public Service Commission for a limited number of homes. Customer participation in Empire's Arkansas Residential Weatherization Program is strictly voluntary. Why is Empire making this offer? The program is designed to provide energy efficiency upgrades to participants, thereby decreasing their energy usage and expense. The program is intended to improve comfort and reduce energy costs by upgrading the thermal envelope and appliances in targeted households. How does it work? For a limited number of homes, an auditor approved by Empire will perform an energy audit to determine if a home qualifies for the program. If a home qualifies, a contractor approved by Empire will install the upgrades chosen by the guidelines of the program. The chosen upgrades are selected by the auditor based on cost-effectiveness tests and are subject to financial limits per home. The upgrades can include: attic insulation, methods to alleviate air infiltration around doors and windows, water heater blankets, pipe insulation, window AC units, AC tune-ups, compact fluorescent light (CFL) bulbs, refrigerator replacements, and duct sealing. Renters are eligible to participate with expressed consent from the homeowner. The program has no income guidelines, but rather focuses on severely energy-inefficient homes. How can I be considered for the program? 0" Complete the following application form indicating your interest in being contacted in the future. 0" Each year that the program is approved, a list of potential participants will be selected. 0" Potential participants may be contacted by an Empire employee or an Empire contractor, who will determine whether the participant's home could potentially qualify, and for what improvements. 0" If a participant's home qualifies, a contractor will organize a time to visit and perform the upgrades that the program guidelines have deemed cost-effective for your home. Home audits are available on a "first-come, first-served" basis to Arkansas homeowners and renters who are customers of The Empire District Electric Company and have expressed an interest in the program. Application does not guarantee inclusion into the program, nor does it guarantee which, if any, upgrades a home can qualify for. These decisions are the sole choices of Empire and its contract partners for the program. The only way to determine eligibility for the program is to apply for the program. For additional information, you may contact The Empire District Electric Company by phone at or by atenergy.efficiency@empiredistrict.com. THE EMPIRE DISTRICT ELECTRIC COMPANY

88 Appendix X - 3 Date Mailed: 11/09/12 1 Account Number: TOTAL AMOUNT DUE Delinquent after 11/29/12, add late fee of After 11/29/12, Pay TOTAL AMOUNT ENCLOSED $ $ $0.00 $ JOHN A. CUSTOMER 101 MAIN STREET ANYWHERE, AR Remit to: EMPIRE DISTRICT PO BOX KANSAS CITY, MO For account questions, call To pay your bill by phone, call Empire District ( 602 S. Joplin Avenue Joplin, MO Account Number: Summary as of 11/08/12: Previous Bill 5 Payment Received Balance Forward Electric *** see Account Detail following message(s). 6 TOTAL AMOUNT DUE 10/10/12 10/16/12 Check $ ($121.00) Thank you $0.00 $ *** $ If you have a question or problem with billing or service or need help managing your charges with a delayed payment agreement, we welcome your call or visit to your local office. The address and toll-free number are shown above. You may pay your bill by credit or debit card by calling or online at Customer Service, Payments, Credit Card Online. There is a fee for this service. 1) Nine-digit account number needed to make a payment. 2) Customer and billing location information. 3) Empire s mailing address to remit payment. Information on additional payment methods can be found on Empire s Web site, 4) Customer account number. 5) Previous balance, recent payments, and remaining balance. 6) Total amount due for current month detailed explanation on customer charges can be found on the back of the bill. 7) This area has important messages from Empire District.

89 Appendix X - 3 Account Detail 8 Electric For Service at 101 Main Street, Anywhere, AR Rate: RG-Residential 10 Read for: From 10/08/12 to 11/06/12 (29 Days), Curr Read Prev Read Totaling 1,000 KwH 11 11/08/12 Customer Charge 1 x $ /08/12 11/08/12 Usage Charge Usage Charge 600KWH x KWH x $37.70 $ /08/ /08/ /08/12 Transmission Cost Recover Energy Cost Recovery Energy Efficiency Recovery 1000KWH x KWH x KWH x ($0.41) CR $27.86 $ /08/12 Franchise Fee x.04 $ /08/12 Anywhere County Tax x.01 $ /08/12 Arkansas State Tax x.06 $ /08/12 Anywhere City Tax x.01 $ Current Months Charges: $ Contract Update APP 11/08/ APP Installment 19 Billed Charges: Status before payment is ($5.56), after payment in full ($12.31).This account will be reevaluated in May. $ $ ) 11-digit location number to report outages or to use automated account information by phone. 9) Service address - this is important for customers who have multiple accounts with Empire. 10) Meter number, previous meter read, current meter read, and usage information. 11) Empire service includes a fixed monthly customer charge, no matter how much electricity is used. 12) The usage charge is for the kilowatt hours (KWH) used by a customer. The charge for the summer season, June 16 through September 16, is $ for the first 600 KWH and $ for each KWH thereafter. The charge for the first 600 KWH used by a customer is $ and $ for each KWH thereafter in the winter season September 17 through June ) Empire s transmission cost recovery charge collects the Arkansas customer s portion of specific Southwest Power Pool (SPP) transmission fees billed to Empire. This charge is reviewed and adjusted on a yearly basis. 14) The charge for the total fuel and purchased power costs incurred by Empire. This rate changes once a year. The cost includes no mark-up or profit for Empire. 15) The charge to recover the cost of energy efficiency programs in Arkansas run by Empire. This fee is reviewed and adjusted on an annual basis to reflect actual costs of these programs. 16) Taxes, fees, and other assessments. 17) Total charges for the billing period. 18) APP, average payment plan, is a payment contract that calculates a customer s expected annual usage and divides it into 12 equal payments. Each month one payment installment is due from the customer. At the end of 12 months the actual usage is reviewed and a customer s contract and installments are adjusted for the next 12 months. 19) The amount due from the customer by the due date. 20) Important information about a customer s payment contract.

90 Rebates from Empire are Thinking about replacing your central or room air conditioner or heat pump? Looking into ENERGY STAR appliances? You may qualify for a rebate from Empire District.. Appliance Rebate Program The Empire District Electric Company (Empire) can help its Arkansas residential and small business customers by providing rebates for the following ENERGY STAR products: dishwashers, dehumidifiers, refrigerators, room air conditioners, and smart power strips. Not only will you receive a rebate, you will also enjoy the benefits of higher efficiency equipment, which could mean reduced electricity consumption and lower costs. Install a new ENERGY STAR appliance and Empire will provide a rebate to help offset a portion of the cost of the higher-efficiency equipment: Dishwasher $50 Dehumidifier $50 Refrigerator $50 Room A/C $25 Smart Power Strip $10 Residential Weatherization Program The Empire District Electric Company is offering a new, no-cost weatherization energy efficiency program to qualified residential customers in Arkansas. This program has been approved by the Arkansas Public Service Commission for a limited number of homes. Customer participation in Empire s Arkansas Residential Weatherization Program is strictly voluntary. Central Air Conditioning Rebate Program The Empire District Electric Company can help its Arkansas residential and small commercial customers afford a high efficiency central air conditioning or heat pump system through the Central Air Conditioning Rebate Program. Not only will you receive a rebate, you will also enjoy the benefits of higher efficiency equipment which could mean reduced electricity consumption and lower costs. Appendix X - 4 Learn more about any one of these Empire District Electric Company programs by simply filling out the information below and dropping it in the mail. Obtenga más información sobre estos programas de Empire District Electric Company simplemente completando la información a continuación y mandándola por correo. Name: Nombre Address: Dirección City: Ciudad State: Zip: Estado Código Postal Phone (optional): Teléfono (opcional) (optional): (opcional) YES! I would like to learn more about the following programs: Appliance Rebate Program Programa de Reembolso de Dispositivo Residential Weatherization Program Programa de Climatización Residencial Central Air Conditioning Rebate Program Programa de Reembolso de Aire Acondicionado Central

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