APSC FILED Time: 3/31/ :15:35 AM: Recvd 3/31/ :13:45 AM: Docket tf-Doc. 231

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1 SERVICES YOU COUNT ON March 31,2015 Arkansas Public Service Comm ission 1000 Center Street POBox 400 Little Rock, AR Re: Docket No TF Empire District Electric Company An nual 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 of the 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 THE EMPIREDISTRICT ELECTRICCOMPANY 602 S. JOPLINAVENUE ' POST OFFICEBOX127 JOPLIN. MISSOURI '

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 rebate 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 Residential 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 re-appropriated budgets from underperforming programs in Empire s Arkansas EE portfolio. This annual report provides the results of the portfolio for the 2014 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 $ 115,688 $ 20,141 ($679) $ (7) 0.94

3 1.2 Major Accomplishments and Milestones Reached Empire s portfolio achieved an estimated annual energy savings of 147,265 kwh in This represents slightly more than 13 percent of Empire s planned energy savings. Empire s annual estimated demand savings for 2014 was 39 kw. These appear to be a slight decline from levels achieved in 2013, but much of this can be attributed to changes in the deemed savings values from the Arkansas Technical Resource Manual Version 4.0 ( TRM 4.0 ), as well as one of its largest participants in 2012 and 2013 declining to continue participation in its School-based Energy Education program. Empire continues to utilize informal partnerships reported in the 2012 and 2013 program years with agencies like the Arkansas Energy Office. Empire s 2014 energy efficiency portfolio participation was highlighted by its highest-ever participation in both its C&I rebate program and its independent, contractor-driven Residential Weatherization program. Table 1.2 EE Portfolio Cost by Program 2014 % of Budget Actual Budget Program Name Target Sector Program Type ($) ($) AC Tune-up and Duct Sealing Residential Whole Home 9, % High-efficiency Residential Lighting (CFL) Residential Consumer Product Rebate 7,944 8, % Residential Weatherization Program (OG&E) Residential Whole Home 70,000 61,192 87% School-Based Energy Education Residential Consumer Product Rebate 22,412 8,385 37% Energy Star Appliance Res/Small Business Consumer Product Rebate 10,480 3,646 35% High-efficiency HVAC Res/Small Business Consumer Product Rebate 14,730 4,196 28% C&I Audit Commercial & Industrial Audit - C&I 3,251-0% Commercial and Industrial (Custom) Commercial & Industrial Custom 94,410 21,510 23% Commercial and Industrial (Prescriptive) Commercial & Industrial Prescriptive/Standard Offer 126,245-0% Small Business Lighting Small Business/C&I Measure/Technology Focus 49,325-0% Online Audit and Energy Calculator All Classes Behavior/Education 2, % Arkansas Weatherization Program Residential Whole Home 6, % Energy Efficiency Arkansas All Classes Behavior/Education 2,000 1,263 63% Regulatory ,000 6,024 20% Total 449, ,688 26% 1.3 Goals and Objectives for EE portfolio For its 2014 energy efficiency portfolio, 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 its 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. Page 2 of 24

4 Table 1.3 EE Portfolio Summary by Cost Type EE Program Cost Summary 2014 Total Cost % of Budget Actual % of Cost Type Total ($) ($) Total Planning / Design 0% - - 0% Marketing & Delivery 24% 109,916 8,383 7% Incentives / Direct Install Costs 62% 277,743 89,317 77% EM&V 3% 13,283 11,416 10% Administration 4% 18, % Regulatory 7% 30,000 6,024 5% 100% 449, , % Regulatory 5% Administration 1% Marketing & Delivery 7% EM&V 10% Planning / Design 0% Incentives / Direct Install Costs 77% 1.4 Progress achieved versus goals and objectives Since 2012, Empire has experienced fairly consistent participation in its energy efficiency programs in Arkansas, in spite of well-documented difficulties it faces in its service territory (See Section 1.7 What s Working and What s Not). Empire s demand savings of 39 kw was nearly 14 percent of goal, and its energy savings of 147,265 kwh represents slightly more than 16 percent of its goal. It is also worth noting that many of Empire s goals for savings (such as those for Compact Fluorescent Light bulbs ( CFL s ) and high-efficiency shower heads) used in Empire s initial portfolio filing were based on deemed savings values from a previous version of the TRM. The changes in TRM v3.0 and TRM v4.0 reduced the post-em&v net energy and demand savings significantly for many of Empire s programs, most notably the School-based Energy Education and Residential High-efficiency Lighting programs, which were once 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 The Empire District Electric Co. Page 3 of 24

5 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 to kwh per kit in 2014 (a total of 15,787 kwh from 138 kits). This drop in per kit savings occurred, even though the kits themselves remained essentially the same. Accordingly, the program achieved less than 10% of its net energy savings goal of 191,835 kwh, despite reaching nearly 20% of its target of 700 participants. The drop in participation is due in part to distributing the kits to only sixth graders in 2014, as opposed to sixth and eighth graders in It is also due in part to one of three public schools in Empire s service territory declining to participate in 2014 after participating in 2012 and In other words, 138 EnergyWise kits distributed by Empire represent every sixth grader at every participating public school in Empire s service territory. 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 to 13.7 kwh per bulb (a total of 23,128 kwh saved based on 1,692 bulbs distributed). The program achieved a verified net energy savings of 23,128 kwh, or slightly more than 42% of its goal of 53,870 kwh, despite distributing 118% of its targeted number of CFL s 2. 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) 2010 $ 12,258 $ % $ % 155, % 8 0.0% 2011 $ 13,200 $ % $ % 154, % 3 0.0% 2012 $ 12,719 $ % $ % 153, % % 2013 $ 12,196 $ % $ % 152,396 1, % % 2014 $ 13,739 $ % $ % 155,654 1, % % $ $400 $300 $200 $100 $ Net Annual Savings (f) Portfolio Spending (c) Portfolio Budget (b) 1.5 High-level recap of portfolio savings, participation levels, prior year comparisons, trends, etc. After reporting its highest-ever estimated annual energy savings (177,384 kwh) and estimated annual demand savings (50 kw) in 2013, Empire s portfolio-level performance dipped slightly to 147,265 kwh 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 2014 as 2012 and 2013, so year-to-year comparisons are valid. The Empire District Electric Co. Page 4 of 24

6 and 39 kw, respectively, in 2014, which is closer to levels in The programs continue to perform consistently despite shrinking net-to-gross and savings-per-measure rates as described in the previous section. Empire was able to largely offset the loss of half of its participants in the School-based Energy Education program and reductions in net savings from TRM 4.0 on the strength of its contractor-driven Residential Weatherization Program that was modeled after OG&E s program and its first participation in the C&I Custom program. Empire s contractor-driven Residential Weatherization program debuted in the fourth quarter of The C&I Custom program has been a part of Empire s portfolio since January 1, Empire s portfolio-level achievements are summarized below. Empire achieved verified net energy savings of 147,265 kwh in 2014, compared to 177,384 kwh in 2013 (17% decline), 151,111 kwh in 2012 (2.5% decline) and 2,825 kwh in 2011 (a 5,000 percent improvement). Empire achieved verified net demand savings of 39 kw in 2014, as compared to 50 kw in 2013 (22% decline), 21 kw in 2012 (85% improvement) and 1 kw in 2011 (a 5,000 percent improvement). Empire spent practically the same percentage of its total portfolio budget (26 percent) in 2014 as it did in Only 5% ($6,024 of $115,688)of the 2014 energy efficiency expenditures were tied to regulatory costs, compared to 7% in 2013 ($8,468 of $114,632), 44% in 2012 ($24,817 of $56,406) and 93% in 2011 ($67,883 of $73,125). 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 these types of programs. 1.6 Highlights of well-performing programs This year, Empire achieved customer participation in just over half of its program offerings. Seven of its 13 programs experienced participation by at least one customer. Participation was moderate compared to goals for most of these programs. As in prior years, programs that are free to the customer experienced the highest participation. The Residential Weatherization Program provides energy efficiency improvements to severely inefficient homes, thereby decreasing demand and energy usage for those customers. The program totaled 106 out of a target 108 total measures installed, and did so in 30 homes, completing its goal. This doubled the number of homes weatherized in Empire used the budget modifications granted to it by Order No. 53 in APSC Docket TF in order to weatherize an additional seven homes above the limitations of its initial budget. The Residential High-efficiency Lighting program distributed 1,692 CFL s to Empire s residential customers in This exceeded Empire s goal of 1,440 CFL s by 252 bulbs, or nearly 18 percent. This resulted in an estimated annual energy savings of 15,787 kwh and an estimated annual demand savings of 3 kw. 1.7 What s Working and What s Not Empire continues to experience participation mainly in programs that offer free goods and services. However, one program that requires a financial investment from the customer and still saw improvement in 2014 was Empire s C&I Custom program. Empire incented two participants in this program, which Empire hopes indicates the beginning of an upward trend and market transformation in The Empire District Electric Co. Page 5 of 24

7 this sector. 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 3. Empire has expanded on these challenges in various filings over the last three years, beginning with its response to Order No. 40 in APSC Docket TF 4. A summary of these was filed in support of Empire s 2013 Energy Efficiency Cost Recovery rider re-determination filing. Empire serves a very small number of customers in Arkansas (about 4,300) in a predominately rural and relatively remote area with a few small towns ranging in size of roughly 100 to 3,158 residents. The Commission has recognized that due to the size and other demographics that Empire faces a challenge unique among the public utilities subject to the required EE achievement targets. As outlined in Empire s other energy efficiency filings, some of these hurdles include: Energy efficiency overhead costs - administrative/regulatory costs must be recovered over a small customer base Size of operations - by customer count Empire is less than one-tenth the size of the next smallest IOU in Arkansas Rural service territory - Empire s service territory includes no urban population centers that can offer economic activity and diversity Scope of operations - by population, Empire serves only about 3.7% of the only Arkansas County that it provides service Composition of customer base - Empire s Arkansas service territory is comprised of about 82% residential customers Service territory demographics - based on 2010 U.S. Census Data about 42% of the citizens in Empire s Arkansas service territory live in renter-occupied housing Industrial/Commercial customer base - nearly half of Empire s electric sales in Arkansas come from two large commercial/industrial customers 5 Service territory economy - nationwide franchises and big box stores that may fill the landscape of high commerce areas are virtually nonexistent in Empire s Arkansas service territory Service territory media - limited cost-effective media outlets for this specific rural area are available to promote Empire s energy efficiency programs 6 3 APSC Docket TF, Doc Filed June 3, APSC Docket No TF, Doc Filed September 14, Empire s two-largest Industrial customers which comprise nearly half of its Arkansas sales are cited above as hard-to-reach customers upon whom the portfolio s success will inevitably depend. Both of these customers are now exempt as Self-Direct Opt Out customers, which is still a large barrier to Empire s energy efficiency success, but in a different way. 6 APSC Docket No U, Doc. 40. Filed May 15, 2013 The Empire District Electric Co. Page 6 of 24

8 1.8 Planned changes to programs or budgets In 2014, Empire requested a budget modification, which moved budgeted funds from two underachieving residential programs into its Residential Weatherization program, a process outlined in Order No. 52 in APSC Docket TF. Empire was granted approval by Order No. 53 in APSC Docket TF. The new budget flexibility, shown in the table below, was approved as the 2014 budget and the 2015 budget. The ability to re-allocate funds with a Notice of Intent was also extended into 2015, and is a process Empire plans to utilize, if interest and participation in the program dictates 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 integrated resource plan ( IRP ) process. This analysis is thoroughly discussed in Empire s 2013 IRP 8 reports, which were also filed in Arkansas 9. Empire is also involved in the ongoing process for Arkansas s Statewide Potential Study Training Achievements Empire offered three training sessions for HVAC professionals throughout its entire service territory which were made available to Arkansas contractors. In October, Empire provided a two-day training for HVAC Professionals: Day One covered Manual J Load Calculation and Day Two covered Manual D Residential Duct Systems. The sessions were held in Joplin, Missouri. Although invitation letters were sent to multiple HVAC contractors in Arkansas, none attended. 7 APSC Docket No TF, Doc Filed December 17, Filed with the Missouri Public Service Commission ( MPSC ) in Case No. EO on July 1, APSC Docket No U, Doc. 22. Filed February 28, 2014 The Empire District Electric Co. Page 7 of 24

9 Empire made the following appearances in its Arkansas communities in coordination with the Arkansas Energy Office in 2014 to promote the energy efficiency programs: January 14, 2014 Decatur City Hall August 15, 2014 Benton County Fair 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 Program Highlights This program featured nearly the same participation in 2014 as it did in o Two participants o Estimated annual demand savings of 1 kw. o Estimated annual energy savings of 3,442 kwh o Expenditures of $4,196 or 17 % 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 2012 $ 17,212 $ 286 2% 18, % 9 0 0% % Program Year 2013 $ 24,230 $ 5,034 21% 33,285 4,942 15% % % Program Year 2014 $ 14,730 $ 4,196 28% 33,285 3,442 10% % % $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $- Program Year 2012 Program Year 2013 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. 10 APSC Docket TF, Doc Filed September 30, The Empire District Electric Co. Page 8 of 24

10 2.1.5 Challenges & Opportunities As Empire described at length in its response to Commission Order No. 40 in APSC Docket No TF 11, and briefly above in Section What s Working and What s Not, there are various challenges to successful implementation of energy efficiency programs in its Arkansas service territory. This concern was echoed by the IEM in her 2013 EM&V Report 12. 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 results, while small, hopefully indicate an upward trend 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 (Residential Weatherization and AC Tune-up and Duct Repair). These changes were approved on February 11, Empire also proposed changes to the budget for this program to create additional funds for the Residential Weatherization Program. These were approved on January 2, , and will continue to be effective for the 2015 Program Year. 2.2 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. 11 APSC Docket No TF, Doc Filed September 14, APSC Docket TF, Doc Filed June 3, APSC Docket No TF, Doc Filed February 11, APSC Docket No TF, Doc Filed January 2, APSC Docket TF, Doc Filed September 30, The Empire District Electric Co. Page 9 of 24

11 2.2.3 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 2012 $ 1,787 $ 1,507 84% Program Year 2013 $ 2,000 $ 2, % N/A 0 - N/A N/A - N/A N/A - Program Year 2014 $ 2,000 $ 1,263 63% N/A 0 - N/A 0 - N/A 0 - $3,000 $2,500 $2,000 $1,500 $1,000 $500 $- Program Year 2012 Program Year 2013 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 There were no changes to this budget in 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 2014, incurred no costs, and produced no savings. 16 APSC Docket TF, Doc Filed September 30, The Empire District Electric Co. Page 10 of 24

12 2.3.3 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 2012 $ 68,796 $ - 0% 83, % % % Program Year 2013 $ 49,825 $ 1,483 3% 60, % % % Program Year 2014 $ 49,825 $ - 0% 60, % % % $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $- Program Year 2012 Program Year 2013 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 prior years, 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, remote service territory 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: Residential Weatherization and AC Tune-up and Duct Repair. These changes were approved by the Commission on February 11, No further changes were implemented in Commercial and Industrial (Prescriptive) Program Description C&I customers receive rebates for the installation, replacement or retrofit of qualifying electric savings measures Program Highlights This program had no participation in 2014, and thus incurred no costs and produced no savings. The proliferation of LED Lighting technology which is covered through the custom program, rather than the prescriptive has led participants away from this program and toward the Custom C&I program. 17 APSC Docket No TF, Doc Filed February 11, APSC Docket TF, Doc Filed September 30, The Empire District Electric Co. Page 11 of 24

13 Therefore, while this program had no participation, C&I customers were active in the custom C&I program 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 2012 $ 99,355 $ 360 0% 336, % % % Program Year 2013 $ 126,245 $ 4,577 4% 481,262 21,218 4% % % Program Year 2014 $ 126,245 $ - 0% 481, % % % $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $- Program Year 2012 Program Year 2013 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 19, and briefly above in Section What s Working and What s Not, there are various challenges to successful implementation of energy efficiency programs in its Arkansas service territory. This concern was echoed by the IEM in her 2013 EM&V Report 20. 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 proliferation of LED Lighting technology which is covered through the custom program, rather than the prescriptive has led participants away from this program and toward the Custom C&I program Planned or Proposed Changes to Program & Budget Empire did not make any changes to this budget for the 2014 program year, nor does it expect to request any for the 2015 program year. 2.5 Arkansas Weatherization Program 19 APSC Docket No TF, Doc Filed September 14, APSC Docket TF, Doc Filed June 3, 2013 The Empire District Electric Co. Page 12 of 24

14 2.5.1 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 This program had no participation in 2014, and thus incurred only its minimal share of administrative costs and produced no savings. Empire continues to offer its services in coordination with the administrators of this program to ensure that it performs to its maximum potential 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 2012 $ 5,500 $ 5,301 96% 760 8, % % % Program Year 2013 $ 6,750 $ 3,606 53% 950 3, % % % Program Year 2014 $ 6,750 $ 434 6% % 0 0 0% 5 0 0% $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $- Program Year 2012 Program Year 2013 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 All IOU s in the state experienced participation in the AWP well below their budgets in 2014, but Empire was the only utility in the state for which no homes were weatherized through AWP. Empire has been a part of discussions and meetings to rectify issues with the administration and successful implementation of the program. Empire, like the other utilities in Arkansas, is hopeful for better results in the 2015 Program Year. Empire has and will continue to make a practice of communicating periodically with the administrators of this program, offering its time and resources to help increase results Planned or Proposed Changes to Program & Budget Empire did not make any changes to this budget for the 2014 program year, nor does it expect to request any for the 2015 program year. 2.6 Commercial and Industrial (Custom) The Empire District Electric Co. Page 13 of 24

15 2.6.1 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 its first two participants in 2014 In 2014, this program became Empire s highest-performing single program in terms of energy savings 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 2012 $ 72,603 $ 360 0% 172, % % % Program Year 2013 $ 94,410 $ 2,394 3% 229, % % % Program Year 2014 $ 94,410 $ 21,510 23% 229,797 55,453 24% % % $100,000 $80,000 $60,000 $40,000 $20,000 $- Program Year 2012 Program Year 2013 Program Year ,000 50,000 40,000 30,000 20,000 10,000 0 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 22, and briefly above in Section What s Working and What s Not, there are various challenges to successful implementation of energy efficiency programs in its Arkansas service territory. This concern was echoed by the IEM in her 2013 EM&V Report 23. 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 indicate an upward trend. 21 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. Page 14 of 24

16 2.6.6 Planned or Proposed Changes to Program & Budget Empire did not make any changes to this budget for the 2014 program year, nor does it expect to request any for the 2015 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. In all, packs of CFL s, or 1,692 CFL s were distributed in This exceeded Empire s goal of 1,440 CFL s by 252 bulbs, or nearly 18 percent. These CFL s resulted in an estimated annual energy savings of 23,128 kwh and an estimated annual demand savings of 3 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 2012 $ 7,275 $ 7, % 39,281 38,762 99% % % Program Year 2013 $ 7,944 $ 9, % 53,870 27,806 52% % 1,440 1, % Program Year 2014 $ 7,944 $ 8, % 53,870 23,128 43% % 1,440 1, % $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $- Program Year 2012 Program Year 2013 Program Year ,000 40,000 30,000 20,000 10,000 0 Energy Savings (kwh) Budget Actual Description of Participants As in 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 2014 was the mid-stream change of deemed savings and net-to-gross values included in the TRM v4.0. 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 to 13.7 kwh The Empire District Electric Co. Page 15 of 24

17 per bulb in 2014 s EM&V. The program achieved a verified net energy savings of 23,128 kwh, or slightly more than 43% of its goal of 53,870 kwh, despite distributing 118% of the targeted number of bulbs Planned or Proposed Changes to Program & Budget Empire overspent its budget for this program by 22% in In 2014, due to a small oversight in measure counts, Empire overspent its budget for this program again, but this time by a much smaller margin ($65, or less than 1%). This will be monitored more closely in 2015 and Empire does not anticipate any overage. 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 7 participants in this program in 2014 Participation is comparable to 2013 The program produced an estimated annual energy savings of 217 kwh and an estimated annual demand savings of less than 1 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 2012 $ 9,139 $ 143 2% 29, % 5 0 0% % Program Year 2013 $ 10,480 $ 2,942 28% 54, % 9 0 1% % Program Year 2014 $ 10,480 $ 3,646 35% 54, % 9 0 0% % $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $- Program Year 2012 Program Year 2013 Program Year Energy Savings (kwh) Budget Actual 24 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. 25 APSC Docket TF, Doc Filed September 30, The Empire District Electric Co. Page 16 of 24

18 2.8.4 Description of Participants 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 26, and briefly above in Section What s Working and What s Not, there are various challenges to successful implementation of energy efficiency programs in its Arkansas 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 Planned or Proposed Changes to Program & Budget Empire did not make any changes to this budget for the 2014 program year, nor does it expect to request any for the 2015 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. 26 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. Page 17 of 24

19 2.9.3 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 2012 $ 2,000 $ % Program Year 2013 $ 2,000 $ 2, % N/A N/A - N/A N/A - N/A N/A - Program Year 2014 $ 2,000 $ % N/A n/a - N/A n/a - N/A n/a - $2,500 $2,000 $1,500 $1,000 $500 $- Program Year 2012 Program Year 2013 Program Year Energy Savings (kwh) Budget Actual Description of Participants 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 and willingness to access the internet Planned or Proposed Changes to Program & Budget Empire did not make any changes to this budget for the 2014 program year, nor does it expect to request any for the 2015 program year 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, 138 kits were distributed to sixth-graders at two of the three public middle schools in Empire s service territory, producing 15,787 kwh and 5 kw of savings. 29 APSC Docket TF, Doc Filed September 30, The Empire District Electric Co. Page 18 of 24

20 This is one of Empire s most cost-effective programs, and for a third-straight year reached all eligible participants whose school participated Program Budget, Savings & Participants School-Based Energy Education Cost Energy Savings (kwh) Demand Savings (kw) Participants Program Budget Actual % Plan Evaluated % Plan Evaluated % Plan Actual % Program Year 2012 $ 21,554 $ 14,821 69% 95, , % % % Program Year 2013 $ 42,698 $ 32,957 77% 191,835 95,761 50% % % Program Year 2014 $ 22,412 $ 8,385 37% 191,835 15,787 8% % % $50,000 $40,000 $30,000 $20,000 $10,000 $- Program Year 2012 Program Year 2013 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 sixth grade student receiving an EnergyWise kit Challenges & Opportunities Empire had what appears to be a steep drop in participation this year, but this can be explained. Empire s initial targets were too high given the number of students in the service territory. Last year, Empire dealt with this issue by targeting both sixth- and eighth-graders, totaling 650 students and still falling short of its 700 student goal. This year, the seventh and eighth graders enrolled at these schools had already participated in the program, and thus Empire could only target sixth graders. Further, this program is voluntary and one of Empire s three public schools declined to participate this year. The 138 (20% of the goal) EnergyWise kits distributed by Empire represent every sixth grader at every participating public school in Empire s service territory. Empire s success in this program has also been negatively impacted by changes to deemed savings values in the last two versions of the TRM. 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 to kwh per kit (a total of 15,787 kwh from 138 kits) in Accordingly, the program achieved less than 10% of its net energy savings goal of 191,835 kwh, despite reaching nearly 20% of its target of 700 participants Planned or Proposed Changes to Program & Budget Given this programs inability to ever reach its targets, based on the number of available participants, Empire chose to move some of the unused budget dollars from this program into the Residential Weatherization Program. This budget modification was approved by Order No. 53 in Docket tf and is detailed in Section C&I Audit The Empire District Electric Co. Page 19 of 24

21 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 This program saw no participation in 2014, incurred no costs, and produced no savings 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 2012 $ 1,641 $ % % Program Year 2013 $ 3,251 $ 1,483 46% % Program Year 2014 $ 3,251 $ - 0% 0 n/a - 0 n/a % $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $- Program Year 2012 Program Year 2013 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 31, and briefly above in Section What s Working and What s Not, there are various challenges to successful implementation of energy efficiency programs in its Arkansas service territory. This concern was echoed by the IEM in her 2013 EM&V Report 32. 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. 30 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. Page 20 of 24

22 Planned or Proposed Changes to Program & Budget Empire did not make any changes to this budget for the 2014 program year, nor does it expect to request any for the 2015 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 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 This program achieved 106 out of a target 108 total measures installed, and did so in 30 homes, meeting its goal of 30 homes. This doubled the number of homes weatherized in Empire used the budget modifications granted to it by Order No. 53 in APSC Docket TF to weatherize an additional 7 homes above the limitations of its initial budget. Empire was also pleased with the number of applicants who expressed that they had heard of the program by word-of-mouth 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 2012 $ - $ Program Year 2013 $ 39,715 $ 35,313 89% 46,256 23,817 51% % % Program Year 2014 $ 70,000 $ 61,192 87% 46,256 48, % % % $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $- Program Year 2012 Program Year 2013 Program Year ,000 50,000 40,000 30,000 20,000 10,000 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 Challenges & Opportunities Empire leveraged OG&E s program design, which has made the program run quite smoothly and costeffectively. However, small modifications had to be made to transfer this program to Empire s service territory. 33 APSC Docket TF, Doc Filed December 28, The Empire District Electric Co. Page 21 of 24

23 Planned or Proposed Changes to Program & Budget In 2014, Empire requested a budget modification, which moved budgeted funds from two underachieving residential programs into its Residential Weatherization program, a process outlined in Order No. 52 in APSC Docket TF. Empire was granted approval by Order No. 53 in APSC Docket TF. The new budget flexibility was approved as the 2014 budget and the 2015 budget. The ability to re-allocate funds with a Notice of Intent was also extended into 2015, and is a process Empire plans to utilize, if interest and participation in the program dictates 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 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 Empire issued its first rebate for this program in 2014, a single tune-up with an estimated energy savings of 298 kwh 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 2012 $ - $ Program Year 2013 $ 9,488 $ 1,751 18% 18, % % % Program Year 2014 $ 9,488 $ 300 3% 18, % % % $10,000 $8,000 $6,000 $4,000 $2,000 $- Program Year 2012 Program Year 2013 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. 34 APSC Docket TF, Doc Filed December 28, The Empire District Electric Co. Page 22 of 24

24 Challenges & Opportunities Establishing, training and maintaining trade allies is always a challenge in Empire s small and remote service territory. The contractor who performed the one tune-up explained that due to Empire s remote and small service territory, it is more cost-effective for him to perform his work closer to his business headquarters and core customer base. There are very few contractors, if any, headquartered within Empire s service territory Planned or Proposed Changes to Program & Budget Empire did not make any changes to this budget for the 2014 program year, nor does it expect to request any for the 2015 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 2014, and none are planned for In response to Order No. 52 in APSC Docket TF, which, among other things, questioned the adequacy of Empire s program staffing, Empire filed a compliance report on October 31, Empire explained the reasons it believes its struggles with energy efficiency in Arkansas are not related to its staffing. 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 participates via phone and/or 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. In 2014 no Arkansas contractors chose to attend. Empire also made the following appearances in its Arkansas communities in coordination with the Arkansas Energy Office in 2014 to promote the energy efficiency programs: January 14, 2014 Decatur City Hall August 15, 2014 Bentonville County Fair 35 APSC Docket TF, Doc Filed October 31, The Empire District Electric Co. Page 23 of 24

25 3.3 Information Provided to Consumers to Promote EE Because Empire operates with a dramatically smaller and more rural customer base than any of its peers described at length in its response to Commission Order No. 40 in APSC Docket No TF 36 and other subsequent filings 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. 4.0 Appendix A: EM&V Contractor Report Attached as Appendix A to this report is Empire s 2014 EM&V Report and cost-benefit analysis, prepared by The Cadmus Group. 5.0 Appendix X: Appendix X-1 Arkansas Energy Office Newsletter The attached excerpt from the December 2014 newsletter for the Arkansas Energy Office commends Empire on its continued progress toward meeting its goals in energy efficiency, specifically its Residential Weatherization Program. 36 APSC Docket No TF, Doc Filed September 14, The Empire District Electric Co. Page 24 of 24

26 2014 Empire Energy- Efficiency Portfolio Evaluation Report April 1, 2015 Arkansas The Empire District Electric Company Planning and Regulatory Department 602 South Joplin Avenue Joplin, Missouri 64802

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28 Prepared by: Allie Marshall Sarah Delp Amy Ellsworth Cadmus

29 Table of Contents List of Acronyms and Abbreviations... iii Introduction... 1 Overview... 1 Evaluation Objectives... 1 Evaluation Methodology... 2 Portfolio Evaluation... 4 Portfolio Status Overview... 4 Evaluation Findings and Conclusions... 6 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 Appliances Program Program Description Program Status Overview Program Impact Review i

30 Evaluation Findings and Conclusions Recommendations Residential Weatherization Program Program Description Program Status Overview Program Impact Review Evaluation Findings and Conclusions Recommendations AC Tune-Up Program Program Description Program Status Overview Program Impact Review Evaluation Findings and Conclusions Recommendations C&I Custom Program Program Description Program Status Overview Program Impact Review Evaluation Findings and Conclusions Recommendations Appendix A: Cost-Effectiveness Results by Program ii

31 List of Acronyms and Abbreviations Acronym/Abbreviation AIEC APSC ASHP C&I CAC CFL CFM EM&V gpm HSPF HVAC kw kwh NTG OG&E RAP RSOP SBEE SEER sqft SWEPCO 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 Residential Standard Offer Program School Based Energy Education Seasonal energy efficiency ratio Square feet Southwestern Electric Power Company Technical Reference Manual variable frequency drive iii

32 The Empire District Electric Company s (Empire) portfolio includes seven programs in the residential prescriptive category and four commercial and industrial (C&I) programs. 1 Empire also provides funding for two additional statewide programs (Arkansas Weatherization Assistance and Energy Efficiency Arkansas), which are implemented by third-party organizations. Empire contracted with Cadmus (the Evaluation Team) to conduct process and impact evaluations of its 2014 portfolio in compliance with its regulatory requirements. 2 Introduction The Empire Portfolio Small Business Lighting Overview C&I Audit Similar to the evaluations in 2012 and 2013, the Evaluation Team conducted condensed portfoliolevel process activities and impact evaluation activities only for the programs that reported participation and savings in Therefore, the impact findings in this report are restricted to the following programs: Residential High Efficiency Lighting High Efficiency Air Conditioning ENERGY STAR Appliances Online Home Audit Tool School Based Energy Education Residential Weatherization Air Conditioning (AC) Tune-Up C&I Prescriptive C&I Custom Residential High Efficiency Lighting Program High Efficiency Air Conditioning Program ENERGY STAR Appliances Program School Based Energy Education Program Residential Weatherization Program AC Tune-Up Program C&I Custom Program Evaluation Objectives To remain consistent with the previous two evaluations and with the Arkansas Technical Reference Manual Version 4.0 (TRM 4.0), the Evaluation Team designed the 2014 portfolio evaluation to: Empire tracks the participation and budget for C&I Prescriptive, Custom, and Audit Programs under the C&I Rebate Program. Cadmus did not evaluate the two statewide programs in Due to a restricted budget and historically limited program participation, the Evaluation Team conducted minimal process and impact activities in 2012 and

33 Quantify energy and demand savings resulting from Empire s active programs; Understand why certain program effects occurred; and Identify ways to improve and refine current and future programs. Similar to previous evaluations, the Evaluation Team maintained the following impact objectives in 2014: 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 2014 gross energy and demand impacts at the measure and program levels; Estimate net impacts at a program level; and Identify key issues and areas of focus for subsequent evaluations and TRM updates. In 2014, the process evaluation objectives were to: Document the programs 2014 evolution, processes, and key success factors and challenges; Track Empire s progress incorporating recommendations from the 2012 and 2013 evaluations; Identify significant gaps, achievements, and areas where improvements are warranted; and Provide recommendations to help streamline program delivery and operations; improve customer satisfaction; enhance participation, energy, and demand savings; and achieve varied program objectives. Evaluation Methodology As noted in the Overview, The Evaluation Team did not conduct measurement and verification activities for the 2014 evaluation. However, our high-level evaluation provides critical feedback regarding program trends throughout the performance period and recommendations for process improvements. The following sections provide details on the specific methods the Evaluation Team used to evaluate Empire s 2014 portfolio. 2

34 Impact Evaluation The Evaluation Team conducted the following impact evaluation activities for the Residential High Efficiency Lighting, School Based Energy Education (SBEE), High Efficiency Air Conditioning, ENERGY STAR Appliances, Residential Weatherization, AC Tune-Up, and the C&I Custom 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 per-unit savings for program measures. 4 Net Savings Review: Apply net-to-gross (NTG) values to program savings. Due to its geographical proximity and similar market conditions, the Evaluation Team largely derived NTG values from its evaluation work conducted in the neighboring Southwestern Electric Power Company (SWEPCO) Arkansas territory. Process Evaluation For the process evaluation, the Evaluation Team gathered program information and feedback through a review of the Resource Action Program evaluation report for the SBEE Program and an end-of-year interview with Empire s energy-efficiency coordinator to: 5 Follow-up on 2012 and 2013 recommendations; Discuss general program activities and significant changes and results; and Discuss potential future program changes. 4 5 Please note that values in impact tables, particularly for ex post and net savings, may not add correctly due to rounding of decimal places. This interview was with Nate Hackney on December 30,

35 Portfolio Status Overview Portfolio Evaluation As described in the Introduction, Empire offers seven residential sector and four C&I sector programs. Seven programs reported participation (Residential High Efficiency Lighting, High Efficiency Air Conditioning, ENERGY STAR Appliances, SBEE, Residential Weatherization, AC-Tune-Up, and C&I Custom 6 ) in 2014, and therefore have dedicated impact results in this report. The portfolio achieved 12% of its energy savings and demand reduction goals in 2014, which is lower than the portfolio achieved in However, Empire saw a substantial jump in savings in 2013, which was largely due the SBEE program targeting two grades per school in 2013 as opposed to one grade in 2012 and 2014 (see Table 4 through Table 7 in the Portfolio Performance section). Program Year Table 1. Portfolio Demand Reduction and Energy Savings by Year Net Demand Reduction Goal (kw) Evaluated Net Energy (kw) Percent of Demand Reduction Goal Achieved % % % Total % As shown in Figure 1, Empire s portfolio garnered overall savings of 463,413 kwh during the past three years. 6 The 2013 evaluation reported C&I saving as prescriptive. However, because the savings are custom calculations, Empire tracks them as part of the C&I Custom Program. 4

36 Figure Portfolio-Level Energy Savings 500, ,162 Net Energy (kwh) Savings Achieved 450, , , , , , , ,000 50, , , , Total As discussed in the 2012 and 2013 evaluation reports and 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; 7 Although economic conditions have improved somewhat, according to the U.S. Census Bureau, the average per capita income in Empire s territory is $26,715, which is relatively low; 8 and Few cost-effective marketing opportunities. 9 In 2013, 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. 10 These unambiguous and constant challenges provide a distressing contrast to Empire s continued efforts to implement a robust program portfolio that offers residential This is the case even though the customer base is predominantly residential (82.2%). United States Census Bureau: As discussed in the 2012 and 2013 evaluation reports, the location and rural nature of the territory do not provide cost-effective mass media advertising opportunities. Docket tf-DOC. 192; page iv. 5

37 and nonresidential customers a variety of opportunities to save energy and money. As part of Empire s efforts to offer a comprehensive portfolio in 2014, it continued to: Provide programs to customers in every sector; Offer training to local contractors; 11 Implement a territory-appropriate marketing strategy; Ensure sufficient funding for all programs (including seeking and gaining approval from the APSC to reallocate budget from under-preforming programs to the Residential Weatherization Program to garner greater savings 12 ); Continue to leverage local partnerships such as the Arkansas Industrial Energy Clearinghouse (AIEC) and Oklahoma Gas & Electric (OG&E), which enabled Empire to attract contractors to implement the Residential Weatherization Program in its territory. Despite these efforts, Empire has continued to struggle to achieve program participation throughout the portfolio for the past three years. 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. 13 In 2012, Cadmus was unable to evaluate the portfolio against the statewide comprehensive factors. In 2013 and 2014, 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. We found that Empire continued to partially meet the objectives of Factor 1 in The energy efficiency coordinator confirmed that no Arkansas contractors joined any of the trade-ally trainings offered by Empire in APSC Docket TF Order No The reallocation of budget allowed Empire to sponsor nine additional projects under the Residential Weatherization Program. APSC Docket U Order No

38 Education/Marketing and Outreach Empire provides limited customer education. Specific efforts in 2014 match those implemented in 2013, including the company website, program flyers, a postcard to solicit interest in the Residential High Efficiency Lighting Program, one-line notices in utility bills, limited local newspaper notices, community presentations, in-person recruitment by trade allies to customers for the Residential Weatherization Program, and face-to-face discussions with key C&I customers. Empire conducts very limited marketing and outreach for its programs as the cost is prohibitive and affects cost-effectiveness, particularly in light of continued limited participation in its programs. Furthermore, due to the unique location of Empire s service territory, mass marketing is not a viable option as marketing efforts would spillover substantially to non-customers. Training Similar to 2013, Empire provided relevant, although limited, training opportunities to contractors in 2014, including Manual J load calculation and duct-sealing training courses. However, no Arkansas contractors attended the trainings. The primary challenge, noted by the energy-efficiency coordinator, continues to be that the majority of the service territory consists of bedroom communities that have very few local contractors and it is not cost-effective for contractors from other regions in Arkansas to travel the distance required to engage Empire customers. However, Empire has successfully engaged with OG&E contractors to implement the Residential Weatherization Program and leveraged the training provided by OG&E. 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, the Evaluation Team assessed performance indicators associated with the adequacy of budget allocations to achieve goals and determined whether program staff and trade-ally support was sufficient to support program goals. Just as in 2013, we found that Empire did not meet the objectives of Factor 2 in Seven of Empire s 11 programs had minimal or no participation in However, unlike the three-fold improvement in 2013 over 2012, 2014 brought an overall decrease in savings from Even though Empire spent slightly more budget in 2014 (23% of the portfolio budget), the portfolio did not perform as well against energy-savings and demand-reduction goals (12% each). 15 In addition, all programs with participation underspent their allocated budgets, including the one that exceeded its energy-savings goal (Residential Weatherization) and another that exceeded demand-reduction goals (SBEE). 16 Thus, in The two statewide programs were not included in the evaluation. See Table 5 and Table 5 for further savings details. See Table 8 for further budget by program details 7

39 2014, just as in 2013, Empire had more than sufficient budget allocated to achieve these limited results; however, due to low participation overall, the Evaluation Team cannot determine with certainty if the current budget allocation is sufficient. Successful implementation of the Empire portfolio is also impeded by limited staff resources. Throughout the past three years, Empire has designated only one full-time staff member (the energyefficiency coordinator) to oversee its energy-efficiency portfolios in both Arkansas and Missouri. See the Administrative Processes section for further 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. However, Empire has successfully engaged with OG&E contractors to implement the Residential Weatherization Program. 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, the Evaluation Team identified the end uses addressed by each program. In 2014, as in 2013, Empire s programs offered customers a diverse range of choices that met the objectives of Factor 3. In total, the portfolio covers all major end uses for both the residential and commercial sectors. Table 2 summarizes the end uses available in Empire s portfolio by customer sector. Table 2. Empire Program End Uses by Customer Sector Sector Lighting HVAC Hot Water Appliances Building Shell Plug Loads Motors Residential Small Business C&I : End use targeted to customers in the identified sector; : End use available, but not targeted; : End use is not offered. 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, the Evaluation Team reviewed the extent to which Empire offered technical support in 2014 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, just as it had in

40 While Empire continues to provide incentives that align with industry best practices, it did not modify the portfolio in 2014 to offer bonus or bundled incentives for the completion of comprehensive projects. However, the statewide Residential Weatherization Program offers Empire-supported energy audits to qualifying, severely inefficient homes in Empire s territory. In addition, Empire provides incentives covering up to 50% of the cost of energy audits for nonresidential customers through the C&I Audit Program. Furthermore, Empire continues to have an informal partnership with OG&E contractors who implement the Residential Weatherization Program, and the AIEC, which offers onsite energy assessment to nonresidential customers. As reported by the energy-efficiency coordinator for several years 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. 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. The Evaluation Team 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. Just as in 2013, we found that Empire s portfolio offers targeted energy-efficiency 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, the C&I sector remained a significant challenge in 2014 as Empire s territory includes only two large C&I customers one of which selected the self-direct option under the Arkansas CEE Rules. The Evaluation Team also found that Empire collaborates with local community and utility partners. Specifically: Empire continues to have an informal partnership with OG&E contractors. 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. 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. 9

41 As discussed in Factor 2, Empire achieved 12% of both its energy-savings goal and demand-reduction goal while only spending 23% of the portfolio budget. The barriers that limit participation in Empire s territory (detailed in other sections of this report, as well as the 2012 and 2013 reports) may be too great to enable the delivery of all cost-effective energy efficiency within a reasonable period of time. In 2014, we examined the cost per kwh by program and for the portfolio overall. As shown in Figure 2, the cost per kwh for the portfolio has tripled in the last three years. Figure Portfolio Level Cost per kwh $0.700 $0.651 $0.600 $/kwh $0.500 $0.400 $0.300 $0.200 $0.204 $0.412 $0.100 $ However, not all programs present the same challenges. Figure 3 illustrates the cost per kwh over the past three years for programs with participation. Clearly, the ENERGY STAR Appliances Program has the most negative impact on the portfolio overall, with a cost per kwh of $2.45 in 2013 and tripling to $7.59 in In addition, the C&I Rebate Program increased from $0.05 per kwh in 2013 to $0.36 per kwh in Note that both of these programs had minimal participation in 2013 and The two bright spots in Empire s portfolio are the Residential Weatherization Program and Residential High Efficiency HVAC Program. The Weatherization Program started out costing $1.14 per kwh in 2013, its first year, and then remained relatively consistent with $1.18 per kwh in 2014 with an increase in participation. The High Efficiency Air Conditioning Program dropped from $1.64 per kwh in 2013 to $0.64 in 2014, despite having only modest participation. 10

42 $8.00 $7.00 $6.00 $5.00 Figure Cost per kwh by Program $/kwh $4.00 $3.00 $2.00 $1.00 $ * New in ** Includes C&I Prescriptive, Custom, and Audit. 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, the Evaluation Team reviewed 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 just as it did in Empire was responsive to the Evaluation Team s data requests and data quality was sufficient, although limited. The Evaluation Team also evaluated the resources Empire allocated to the EM&V effort. Spending on EM&V was approximately 5% of the 2014 portfolio budget and accounted for 17% of spending. The industry standard is that approximately 5% to 6% of program costs should be allocated to EM&V, thus Empire s EM&V resource allocation to EM&V is consistent with this standard; however, like in 2012 and 2013, in comparison to its actual program implementation spending in 2014, the resource allocation was significantly higher than the norm. Regardless, given that its portfolio budget is very small 11

43 in relative terms and that the EM&V budget had to be spread across seven programs, it was impossible to conduct an in-depth or rigorous evaluation. Status of 2012 and 2013 Recommendations Empire completed nearly all of the 2012 and 2013 recommendations. The energy-efficiency coordinator reported that all remaining 2012 and 2013 recommendation were seriously considered. However, due to the unique challenges of the service territory and staff constraints, Empire decided not to pursue the majority of the recommendations (Table 3). To determine the status of each recommendation, the Evaluation Team gathered input from the energyefficiency coordinator and the database. We then assigned each recommendation one of the following designations: Complete: Empire considered and took action to implement the recommendation. Complete (Considered/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. As Table 3 presents Empire s 2012 and 2013 Evaluation Recommendations at a portfolio level. We present similar results in each of the program sections where we provided recommendations in 2012 and/or Table Status of 2012 and 2013 Portfolio Recommendations Year Recommendation Status 2012/2013 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. Completed (Considered/Rejected). Due to Empires geographically narrow service territory and small customer base, staff determined it was not appropriate to invest in developing a full-scale marketing plan. However, Empire leveraged community outreach events such as Chamber of Commerce meetings and a county fair, as well as working with its limited local contractor base, big box stores, local newspapers, and sending out direct mail to customers Develop a more cohesive relationship with AIEC to Completed (Considered/Rejected). Empire 12

44 Year Recommendation Status leverage the trade allies currently aligned with AIEC. maintained open lines of communication with AIEC in 2014, but determined it was not necessary to develop a formal relationship with AIEC Solicit customer feedback in Completed (Considered/Rejected). Empire determined it was inappropriate to implement this recommendation across the portfolio. However, Empire solicited participant feedback for the SBEE Program, as well as ad hoc feedback on C&I projects Monitor customer satisfaction, as appropriate. Completed. Empire continued to engage customers who called with questions, and received unsolicited handwritten thank you notes. 2012/2013 Track marketing efforts by inquiring how participants learned about the program (e.g., when they call to inquire about participation, on rebate forms) 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 Review the participation requirements for C&I auditing firms. 2012/2013 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. Completed (Considered/Rejected). Due to limited staff, Empire determined it was not cost-effective to implement these recommendations. 13

45 Year Recommendation Status 2012 In addition to modeling the new database on Protocol A of the Arkansas TRM, consider the recommendations depicted in the 2012 evaluation plan Consider eliminating non-performing programs in the next program cycle. Completed. Empire tracked many more variables in 2013 than in Although there are additional variables that Empire could track that would help facilitate the programs evaluations, Empire decided not to pursue additional enhancements at this time. Completed. Empire will reconsider all programs during the planning process for the program cycle Enhance data tracking. In Progress/Partial. For the ENERGY STAR Appliances Program, Empire added waterheater type to dishwasher tracking, but has not included the model number and manufacturer of the replaced refrigerator, nor the type of refrigerator replacement (early or on failure). However, Empire plans to track these program elements in For the Residential Weatherization Program, Empire provided the existing R-values for attic insulation and the exact CFL wattage as requested in Portfolio Performance Overall, participation decreased in 2014, continuing to be insufficient to meet the portfolio goals. Although the same six programs had participation in 2014 as in 2013, as well as one additional program (AC Tune-Up), overall participation decreased from the high water mark in 2013, which had been a three-fold improvement over the two programs with participation in However, only one program of these seven either met or exceeded their 2014 energy-savings goal (Residential Weatherization) and one met or exceeded its demand-reduction goals (SBEE). While the Residential High Efficiency Lighting Program achieved nearly half of its energy savings (43%) and just over half of its demand-savings (58%) targets, the remaining four active programs had minimal participation (High Efficiency Air Conditioning, ENERGY STAR Appliances, AC Tune-Up, and C&I Custom). Ongoing 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 4.0, 3.0, and 2.0 all had an impact on Empire s lower than expected performance. These factors are discussed in detail in other sections of this report. 17 The 2013 evaluation reported C&I saving as prescriptive. However, because the savings are custom calculations, Empire tracks them as part of the C&I Custom Program. 14

46 In 2013, the energy-efficiency coordinator reported that the slight increase in participation in the residential 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. However, the slight dip in these two programs and, conversely, the tiny uptick in the C&I Custom and AC Tune-Up Programs in 2014 suggests the adjustments to participation are more likely due to contractor engagement with customers. 18 For example, in 2014, an AC Tune-Up contractor already participating in OG&E programs began to recruit Empire customers. In addition, just as in 2012 and 2013, the Online Home Audit Tool Program may have had participants in 2014, but Empire does not attribute savings to the program. Furthermore, Empire provides the audit tool 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 4 and Table 5 provide the net savings achieved for energy and peak demand across the portfolio. 19 The program-specific sections below include more details on each of the active programs. Table 4. Empire Portfolio Net Energy Savings Goals and Evaluated Net Energy Savings Program Net Energy Savings Goal (kwh) Evaluated Net Energy Savings (kwh) Percent of Energy Goal Achieved High Efficiency Air Conditioning 33,285 3,442 10% Residential High Efficiency Lighting 53,870 23,128 43% ENERGY STAR Appliances 54, % Online Home Audit Tool n/a n/a n/a School Based Energy Education 191,835 15,787 8% C&I Prescriptive 481, % C&I Custom 229,797 55,453 24% C&I Audit n/a n/a n/a Small Business Lighting 120, % Residential Weatherization 46,256 48, % AC Tune-Up 18, % Total 1,229, ,265 12% Eight customers participated in the ENERGY STAR Appliance Program in 2013 and seven in Three customers participated in the High-Efficiency Air Conditioning Program in 2013 and two in One customer participated in the C&I Custom Program in 2013 and two in Zero customer participated in the AC Tune- Up Program in 2013 and one in The two statewide programs are not included in the tables. 15

47 Table 5. Empire Portfolio Net Demand Reduction Goals and Evaluated Net Demand Reduction Program Net Demand Reduction Goal (kw) Evaluated Net Demand Reduction (kw) 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 % C&I Prescriptive % C&I Custom % C&I Audit n/a n/a n/a Small Business Lighting % Residential Weatherization % AC Tune-Up % Total % Table 6 and Table 7 illustrate the variations in energy and demand savings achieved over the past three years as a percent of goal. As shown Table 6, 2013 portfolio-level energy savings increased over 2012, despite declining as a percent of goal, and then declined both in savings achieved and as a percent of goal in Demand reduction more than doubled in 2013 when compared to 2012, and then dropped slightly in Table Empire Portfolio Net Energy-Savings Goals and Evaluated Net Energy Savings Program Year Net Energy Savings Goal (kwh) Evaluated Net Energy Savings (kwh) Percent of Energy Goal Achieved , ,753 18% ,229, ,144 14% ,229, ,265 12% Total 3,235, ,162 14% 16

48 Table Empire Portfolio Net Demand-Reduction Goals and Evaluated Net Demand Reduction Program Year Net Demand Reduction Goal (kw) Evaluated Net Energy (kw) Percent of Demand Reduction Goal Achieved % % % Total % As shown in Figure 4, Empire s portfolio garnered overall savings of 463,413 kwh during the past three years. Figure Portfolio-Level Energy Savings 500, ,162 Net Energy (kwh) Savings Achieved 450, , , , , , , ,000 50, , , , Total Despite the varied performance, the portfolio reduced 108 kw since 2012 (Figure 5). 17

49 Figure Portfolio-Level Demand Reduction Demand Reduction (kw) Achieved Total Portfolio Design Empire s portfolio may not be appropriate for its service territory. As described in the 2012 and 2013 evaluation reports, Empire offers energy-efficiency programs to customers in all sectors. However, as noted in the sections above, as well as in the 2012 and 2013 reports, Empire faces numerous hurdles to achieving its savings and participation goals. Primary challenges continue to be: 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 per captia is just $26,715. Insufficient and hard-to-reach commercial customer base. Two large commercial facilities account for nearly 50% of Empire s sales volume in the territory and one of these facilities has opted-out of program participation completely. 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. High cost per kwh saved. The overall portfolio cost per kwh has increased from $0.20 per kwh in 2012 to $0.65 per kwh in However, not all programs weigh on the portfolio equally. Specifically, the ENERGY STAR Appliances Program entailed the highest cost at $7.59 per kwh in In addition to the difficulties listed above, Empire is constrained by limited resources, including having only one full-time staff member to oversee all energy-efficiency efforts, in addition to other responsibilities, throughout Empire s four-state service territory. The energy-efficiency coordinator 18

50 reported that, although less than 3% of Empire s total customer base is in Arkansas, he must dedicate a disproportionately high amount of time to energy efficiency to Arkansas compared to other service territories. To increase engagement with the residential customer base, Empire s energy-efficiency coordinator has continued to emphasize throughout the past three years the importance of give-away programs that do not require a significant investment of the customers time or financial resources to participate. Three of the seven active programs are give-away programs (Residential High Efficiency Lighting, SBEE, and Residential Weatherization), and the remaining four programs had only minimal participation (High Efficiency Air Conditioning, ENERGY STAR Appliances, AC Tune-Up, and C&I Custom). Marketing and Outreach Cost-effective marketing tactics continue to be limited. The energy-efficiency coordinator confirmed that Empire continued to take a holistic approach to marketing the portfolio in He restated that mass marking is not cost-effective or desirable, as most local television and radio stations serve mostly non-empire customers. 20 Therefore, direct mail continued to be Empire s primary form of reaching residential customers, and one-on-one communications was its main outreach tactic for reaching C&I customers. 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 2014 goals. The energy-efficiency coordinator reported that the portfolio budget was more than sufficient to support the 2014 portfolio goals. However, Empire significantly underspent nearly every program budget except for the Residential High Efficiency Lighting (102%) and Residential Weatherization (82%) Programs (see Table 8). Since Empire achieved 12% of its energy and demand goals while spending only 23% of its program budget, it is theoretically feasible for Empire to reach its goals within the allocated budget; however, just as in 2012 and 2013, 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 the High Efficiency Air Conditioning, ENERGY STAR Appliances, AC Tune-Up, and C&I Programs 21 were more than sufficient to support the 2014 portfolio goals. However, none of these programs achieved their goals or spent a significant portion of the program budget (see Table 4 for energy savings, Table 5 for demand reduction, and Table 8 for budget details) Empire s Arkansas territory is limited to 3.7% of Benton County, which is 0.276% of the population of Arkansas. Empire rolled all three C&I programs into one budget. 19

51 Table 8. Portfolio Budget and Actual Expenditures Program Projected Budget Actual Expenditures Percent of Budget Used High Efficiency Air Conditioning $14,730 $2,196 15% Residential High Efficiency Lighting $7,944 $8, % ENERGY STAR Appliances $10,480 $1,646 16% Online Home Audit Tool* $2,000 $729 36% School Based Energy Education $22,412 $6,385 28% Arkansas Weatherization Assistance* $6,750 $434 6% Energy Efficiency Arkansas* $2,000 $1,263 63% C&I** Programs $223,905 $19,510 9% Small Business Lighting $49,325 $0 0% Residential Weatherization $70,000 $57,776 83% AC Tune-Up* $9,488 $300 3% Regulatory* $30,000 $6,024 20% Total $449,034 $104,273 23% * Cadmus did not evaluate. ** Empire rolled all three C&I programs into one budget.*** Table does not include EM&V costs (ongoing, to date: $11,416) Table 9 shows that the portfolio-level budget and actual expenditures over the three years of Empire s Arkansas energy efficiency portfolio have steadily increased. This is in line with the overall increase in energy savings and demand reduction, even though the portfolio is nowhere close to achieving its targets. Program Year Table 9. Three-Year Portfolio Budget and Actual Expenditures Projected Budget Actual Expenditures Percent of Budget Used 2012* $299,575 $29,920 10% 2013 $449,034 $89,426 20% 2014 $449,034 $104,273 23% * 2012 projected budgets and expenditures do not include regulatory expenses nor the Arkansas Weatherization Assistance or Energy Efficiency Arkansas programs. The Residential Weatherization and AC Tune-Up Program are also not included the 2012 budget as they were not implemented until Administrative Processes Staffing resources continued to be insufficient to actively manage Empire s large portfolio of programs. Empire currently offers 11 programs, which continue to be overseen by one staff member, the energyefficiency 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, for C&I customers, in coordination with Applied Energy Group, the rebate 20

52 processing vendor. In addition, the energy-efficiency coordinator is responsible for duties outside of the Arkansas territory, which is where the majority of Empire s customers reside. However, due to the energy-efficiency requirements in Arkansas, the energy-efficiency coordinator spends a disproportionately high amount (nearly 50%) of his time overseeing the Arkansas portfolio, which accounts for less than 3% of the total Empire customer base. Trade Allies Trade-ally participation continued to be insufficient to support program goals. As in 2012 and 2013, Empire did not contract with any vendors in However, Empire did leverage existing trade allies that support OG&E programs to deliver the Residential Weatherization and AC Tune- Up Programs. The energy-efficiency coordinator reported that he continued to reach out (unsuccessfully) to local contractors. The primary challenge, noted by the energy-efficiency coordinator, was that the majority of the service territory consists of 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 training, including a Manual J/load calculation and duct-sealing training. 22 Similar to 2012 and 2013, due to low trade-ally participation and a restricted evaluation budget, the Evaluation Team did not conduct contractor surveys in Therefore, we were unable to assess the extent of related commercial activity in Empire s territory during 2014 or determine the variables that may have affected contractor involvement in the program. Portfolio Program Materials Critical program materials remain undeveloped. The energy-efficiency coordinator indicated that, to remain as cost-effective as possible, Empire did not make substantial changes to any program materials in The portfolio still 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, the Evaluation Team recommends Empire focus on developing these materials only after the APSC approves the program filing. Data Tracking Empire enhanced data tracking, but there remains room for improvement. Empire revamped data tracked by expanding the tracking spreadsheet and capturing more of the information needed to support evaluation activities. Despite the 2013 improvements as well as the 22 Empire held technical trainings in Joplin Missouri, which is within easy driving distance of the Arkansas territory. However, no trade allies from the Arkansas territory attended. 21

53 additional fields that Empire added in 2014, there are still several additional variables that the Evaluation Team recommends tracking. More details are presented in the next section. Portfolio-Level Recommendations As was discussed in the Portfolio Status Overview section, as well as in the 2012 and 2013 reports, Empire is facing an array of obstacles to implementing successful energy-efficiency programs. These challenges, along with the 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. 23 These factors contribute to a program portfolio that is outsized and does not align well with Empire s territory or delivery capacity. By streamlining the portfolio into a minimum number of sector-level programs, Empire could consolidate its budget and focus its activities on the programs and measures most likely to succeed. For example, Empire could discontinue the residential weatherization program while combining the Residential High Efficiency Lighting, High Efficiency Air Conditioning, and AC Tune-Up Programs into one Residential Perspective Program. Similarly, the C&I Audit Program could be discontinued and the remaining nonresidential offerings could be combined into one C&I Program. C&I customers would still be able to access C&I audits through the AIEC and the new statewide weatherization program would continue to offer residential customers with home energy audits. Therefore, we suggest that Empire review its current portfolio prior to filing the Energy- Efficiency Plan, and in addition to consolidating program offering, explore eliminating programs and/or measures that: Require a new trade-ally network; Require more than a simple application from the customer; Have an unacceptable cost per kwh; and Have no history of participation. Enhance data tracking. Based on the 2013 recommendations, Empire added several fields and provided more data for the 2014 evaluation. However, the Evaluation Team discovered additional fields that needed information as some measures had participation for the first time in the three-year evaluation period (e.g., pipe insulation for 23 This is not including the two statewide programs: the Arkansas Weatherization Assistance Program and the Energy Efficiency Arkansas Program. 22

54 electric water heaters) in Due to these missing variables, the Evaluation Team had to revert to earlier Arkansas TRM versions to determine savings for refrigerators and pipe wrap. We suggest Empire add the key variables listed below to its data and tracking database for each of the following programs. ENERGY STAR Appliances Program: Type of replacement for refrigerators (early or on failure); and Model number and manufacturer of the refrigerator that was replaced. Residential Weatherization Program: R-value, length of installation and diameter of pipe for pipe insulation; Existing attic insulation R-values in the tracking database (Empire provided this information separately after the original data request); and Wattage of installed bulbs (this information was received separately after the original data request). AC Tune-Up Program: Pre- and post-refrigerant charge levels; or All completed applications for completed work (this information was received separately after the original data request). 23

55 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 2014, 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, which amounted to 1,692 individual CFLs, or 423 packs. Program Status Overview The Residential High Efficiency Lighting Program had a significantly more challenging year in 2014 than in either 2012 or Although the program exceed its 2014 participation target by 76%, it only achieved 43% of its net energy-savings goal and 58% of its demand-reduction goal; the last of these is solely due to adjustments made to the savings per bulb in the ex post gross and net stages of the evaluation. Two factors contributed heavily to the decrease in this net savings per bulb value: In January of 2014, the Energy Independence Security Act of 2007 (EISA) went into effect; banning the manufacture or import of 60-watt incandescent bulbs. As the 60-watt bulb was historically the equivalent baseline (based on lumen output) for 13-watt CFLs distributed through this program, the baseline for the program bulbs decreased to 43 watts in The Evaluation Team applied a NTG value of 64% based on the 2013 SWEPCO Evaluation Report, which is significantly lower than the NTG that Empire used in planning assumptions (86%). Table 10, Table 11, and Table 12 present these findings. Program Year Table Residential High Efficiency Lighting Program Participation* Participation Goal Reported Participation Percent of Participation Achieved % % % * Participation is the number of individual customers that requested and received a four-pack of bulbs. 24

56 Program Year Table Residential High Efficiency Lighting Program Net kwh Savings Energy Type Program Net Savings Goal* Evaluated Net Savings Percent of Goals Achieved 2012 kwh 39,281 38,762 99% 2013 kwh 53,870 27,806 52% 2014 kwh 53,870 23,128 43% * The Evaluation Team derived these savings goals from the 2011 Empire Arkansas Energy Efficiency Portfolio Filing. Program Year Table Residential High Efficiency Lighting Program Net kw Savings Energy Type Program Net Savings Goal* Evaluated Net Savings Percent of Goals Achieved 2012 kw % 2013 kw % 2014 kw % * The Evaluation Team derived these savings goals from the 2011 Empire Arkansas Energy Efficiency Portfolio Filing. Program Impacts Review The Evaluation Team analyzed the Residential High Efficiency Lighting Program impacts by verifying that the number of distributed bulbs was consistent with the number listed in the tracking database, reviewing the claimed (ex ante) savings per bulb using the Arkansas TRM, and applying the SWEPCO 2013 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 2014 and found that it was accurate (Table 13). Reported Quantity of Program Bulbs Table 13. Tracking Database Verification Results Confirmed Quantity of Program Bulbs Percent of Quantity Confirmed 1,692 1, % Evaluated Gross Savings Analysis and TRM Review The Evaluation Team reviewed the CFL savings algorithms in Arkansas TRM Volume 4.0 and calculated ex post gross savings per bulb based on these algorithms. Table 14 and Table 15 compare the results of our Arkansas TRM review with the reported savings per bulb. 25

57 Measure Table 14. 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* 21.4 * The Evaluation Team derived these ex ante savings per measure from the 2011 Empire Arkansas Energy Efficiency Portfolio Filing Measure Table 15. 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* * The Evaluation Team derived these ex ante savings per measure from the 2011 Empire Arkansas Energy Efficiency Portfolio Filing Overall, the Residential High Efficiency Lighting Program realized 50% of its gross electricity savings goal and 64% of its gross demand savings goal. The difference between ex ante and ex post unit savings are mostly attributable to the change in baseline from a 60-watt bulb to a 43-watt bulb due to the EISA legislation. Also, updates to the interactive effects factors (IEF), annual operating hours (AOH), and inservice rates (ISR) in the Arkansas TRM 4.0 also affected the ex post savings per bulb. 13-Watt CFL The Evaluation Team calculated the energy savings (kwh) per 13-watt CFL as: (( ) (( We calculated the peak demand savings per 13-watt CFL as: (( ) (( Table 16 outlines the variable definitions, inputs, and sources the Evaluation Team used to calculate the ex post savings per bulb. 26

58 Table Watt CFL Algorithm Inputs and Sources Variable Definition Input Source W base Rated wattage of removed incandescent lamp 43 Arkansas TRM 4.0 Volume II W post Rated wattage of installed CFL 13 Program Bulb 1,000 Conversion factor of watts to kilowatts 1000 Arkansas TRM 4.0 Volume II CF Peak coincidence factor 0.09 Arkansas TRM 4.0 Volume II: Weighted the indoor and outdoor CF by Cadmus Arkansas Lighting Study where 8% of all CFLs were installed outdoors Hours Annual operating hours Arkansas TRM 4.0 Volume II ISR In-service rate 0.93 Arkansas TRM 4.0 (Retail) IEF E Interactive effects factor for energy savings 0.97 Arkansas TRM 4.0 Volume II (Heating Unknown) IEF D Interactive effects factor for demand savings 1.25 Arkansas TRM 4.0 Volume II Net-to-Gross The Evaluation Team assigned the NTG value of 64% derived from the 2013 evaluation of SWEPCO s Residential and Small Commercial CFL Program (CFL Program), which calculated net adjustments using a price response model. 24 Table 17 shows the net savings per bulb. Measure NTG Table 17. 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 64% Evaluation Findings and Conclusions The majority of the Residential High Efficiency Lighting Program findings and conclusions apply to the portfolio overall and were therefore included in the portfolio-level Evaluation Findings and Conclusions section. Those findings and conclusions outline portfolio performance challenges, marketing and outreach, budget expenditures, and administrative limitations. However, as stated below, Empire did complete the only remaining program recommendation. 24 SWEPCO Energy-Efficient Portfolio Evaluation Report 2013 Program Year. Docket No TF. March 12,

59 Status of 2012 and 2013 Recommendations Empire completed the only remaining recommendations. The Evaluation Team made no 2013 program-specific recommendations for the Residential High Efficiency Lighting Program. The energy-efficiency coordinator reported that Empire considered adding additional technologies in 2014, but determined it was not prudent to invest mid-program cycle and therefore Empire will wait to consider any additional technologies until the planning period for the program cycle (Table 18). Table 18. Status of Residential High Efficiency Lighting Program Recommendations Year Recommendation 2014 Status 2012 Explore adding measures to the program, such as specialty CFLs or other high-efficiency technologies. Completed (Considered/Rejected). Empire may explore additional lighting measures to include in the next program cycle in Arkansas. Recommendations The Evaluation Team did not identify any program-specific recommendations for the Residential High Efficiency Lighting Program in

60 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 substantially less successful year in 2014 than in 2013 or in 2012, distributing energy-efficiency kits to 138 sixth-grade teachers, students, and their families. The program exceed its demand-reduction goal by 128%. However, this was a decrease of nearly 1000% from 2013 and In addition, the program achieved only 8% (down from 50% in 2013 and 108% in 2012) of its energy savings and only 20% of its participation goal (down from 93% in 2013 and 101% in 2012). As was the case with Empire s Residential High Efficiency Lighting Program, the effects of EISA legislation in 2014 and adjusting TRM 2.0-based reported savings to comply with the algorithms and inputs in Arkansas TRM 4.0 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. Furthermore, in 2013 Empire distributed kits to both sixth and eighth graders, leaving only sixth graders for distribution in In addition, one of the participating schools opted out in 2014 and, as a result, Empire had fewer sixth graders to target. Table 19, Table 20, and Table 21 summarize program-level participation, as well as the ex post verified and net energy and peak demand savings compared to the program energy-savings goals. 29

61 Table School Based Energy Education Program Participation Goals* Program Year Participation Goal* Reported Participation Percent of Participation Achieved % % % * Participation is defined as number of individual kits distributed. Program Year Table School Based Energy Education Program Net kwh Savings Energy Type Program Net Savings Goal* Evaluated Net Savings Percent of Goals Achieved 2012 kwh 95, , % 2013 kwh 191,835 95,761 50% 2014 kwh 191,835 15,787 8% * The Evaluation Team derived these savings goals from the 2011 Empire Arkansas Energy Efficiency Portfolio Filing. Program Year Table School Based Energy Education Program Net kw Savings Energy Type Program Net Savings Goal* Evaluated Net Savings Percent of Goals Achieved 2012 kw % 2013 kw % 2014 kw % * The Evaluation Team derived these savings goals from the 2011 Empire Arkansas Energy Efficiency Portfolio Filing. Program Impact Review The Evaluation Team 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 number reported in the tracking database, reviewing the ex ante savings per kit measure, and applying a NTG value. Tracking Database Verification The Evaluation Team reviewed Empire s tracking database against the summary of measures and savings provided by Empire to verify the number of kits distributed in 2014 and found that it was accurate (Table 22). 30

62 Reported Quantity of Kits Table 22. 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, the Evaluation Team reviewed each kit measure using the values in the Arkansas TRM 4.0. Table 23 and Table 24 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 23. 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 8.05 FilterTone Alarm n/a LimeLite Night Light n/a Total Per Kit 315* * The Evaluation Team derived these ex ante savings per measure from the 2011 Empire Arkansas Energy Efficiency Portfolio Filing. Measure Table 24. 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 * * The Evaluation Team derived these ex ante savings per measure from the 2011 Empire Arkansas Energy Efficiency Portfolio Filing. Overall, the program realized 46% and 1,274% of its gross kwh and kw savings, respectively. The lower gross electricity realization rate for the school kits was mainly driven by changes between Arkansas TRM 2.0 and 4.0 and decreased installation rates from those reported in the 2013 program student surveys by the Resource Action Programs (RAP). Specific examples of these differences can be found below. 31

63 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 25 outlines the variable definitions, inputs, and sources the Evaluation Team used to calculate the ex post savings per bulb. Table Watt CFL Algorithm Inputs and Sources Variable Definition Inputs Source W base Rated wattage of removed incandescent lamp 60 Student Surveys (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 3.0 Volume II ISR 1st bulb In-service rate of the first bulb 0.67 Student Surveys (RAP Report) ISR 2nd bulb In-service rate of the second bulb 0.58 Student Surveys (RAP Report) IEF E Interactive effects factor for energy savings 0.97 Arkansas TRM 4.0 Volume II CF Peak coincidence factor 0.09 Arkansas TRM 4.0 Volume II: Weighted the indoor and outdoor CF by Cadmus Arkansas Lighting Study where 8% of all CFLs were installed outdoors IEF D Interactive effects factor for demand savings 1.25 Arkansas TRM 4.0 Volume II One of the causes of the lower CFL savings in 2014 compared to 2013 was a lower installation rate for the second bulb (58%) in the RAP Report, which is lower than the first (67%). In 2013, Cadmus referenced the 2012 RAP Report installation rate, which did not break out installation rates by bulb, and applied the 68% in-service rate to both bulbs included in the kit. 32

64 High-Efficiency Showerhead The Evaluation Team 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 2.0 and 4.0 as well as changes in the installation and hot water heater fuel type from the student surveys. For example, 2.0 provided a higher volume (V) of water for a 2.0 gallon-per-minute (gpm) showerhead than 3.0 and 4.0. Additionally, in TRM 2.0, the algorithm factored in the temperature set point of the water heater, whereas TRM 4.0 applied a mixed hot-and-cold water variable. Both of these changes resulted in downward adjustments to reported energy savings. The installation rates from the student surveys also negatively affected showerhead savings from the 2013 report, as installation rates fell from 58% to 39%. Table 26 outlines the variable definitions, inputs, and sources Cadmus used to calculate the ex post savings per showerhead. Table 26. High-Efficiency Showerhead Algorithm Inputs and Sources Variable Definition Inputs Source P Water density 8.33 Arkansas TRM 4.0 Volume II C p Specific heat of water 1 Arkansas TRM 4.0 Volume II V Volume of water saved per year (2.0 gpm) 1,457 Program Materials and Arkansas TRM 4.0 Volume II T Mixed Mixed water temperature Arkansas TRM 4.0 Volume II T Supply Average supply water temperature 65.6 Arkansas TRM 4.0 Volume II RE Recovery efficiency 0.90 Arkansas TRM 4.0 Volume II (weighted by water heater fuel type from student surveys) Conversion Factor 3,412 Btu/kWh 3,412 Arkansas TRM 4.0 Volume II ISR Installation rate 0.39 Student Surveys (RAP Report) EHW saturation Electric water heater saturation 0.58 Student Surveys (RAP Report) Peak Ratio Ratio of peak kw to annual kwh Arkansas TRM 4.0 Volume II 33

65 Kitchen Aerator The Evaluation Team 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 2.0 and 4.0. Specifically, the TRM 2.0 algorithm factored in the temperature set point of the water heater, whereas TRMs 3.0 and 4.0 use a mixed hot-and-cold water variable. The installation rate reported by the student surveys also dropped from 55% in 2013 to 37% in 2014, causing the savings to be lower than they were in Table 27 outlines the variable definitions, inputs, and sources Cadmus used to calculate the ex post savings per kitchen aerator. Table 27. Faucet Aerator Algorithm Inputs and Sources Variable Definition Inputs Source p Water density 8.33 Arkansas TRM 4.0 Volume II C p Specific heat of water 1 Arkansas TRM 4.0 Volume II V Volume of water saved per year (1.5 gpm) 381 Program Materials and Arkansas TRM 4.0 Volume II T Mixed Mixed water temperature 102 Arkansas TRM 4.0 Volume II T Supply Average supply water temperature 65.6 Arkansas TRM 4.0 Volume II RE Recovery efficiency 0.90 Arkansas TRM 4.0 Volume II (weighted by water heater fuel type from student surveys) Conversion Factor 3,412 Btu/kWh 3,412 Arkansas TRM 4.0 Volume II ISR Installation rate 0.58 Student Surveys (RAP Report) EHW saturation Electric water heater saturation 0.37 Student Surveys (RAP Report) Peak Ratio Ratio of peak kw to annual kwh Arkansas TRM 3.0 Volume II 34

66 FilterTone Alarm Filter alarms are not included in any version of the Arkansas TRM; however, the program implementer, RAP, calculated the alarm electricity savings by referencing participant survey data. The Evaluation Team 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 determined 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. Again, a fall in installation rates from those reported in the student surveys causes a reduction in savings. Installation rates dropped from 52% in 2013 to 35% in Table 28 outlines the variable definitions, inputs, and sources RAP used to calculate the ex post savings per FilterTone Alarm. Table 28. 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 0.35 Student Surveys (RAP Report) Limelight LED Nightlight LED nightlights are not included in the Arkansas TRM 4.0; however, RAP calculated the savings achieved for each nightlight by referencing participant survey data. The Evaluation Team 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. Installation rates dropped from 90% in 2013 to 79% in

67 Table 29 outlines the variable definitions, inputs, and sources RAP used to calculate the ex post savings per Limelite LED NightLight. Table 29. Limelite 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 0.79 Student Surveys (RAP Report) Net-to-Gross Table 30 provides the gross and net savings per efficiency kit. The Evaluation Team assigned the SWEPCO Residential Standard Offer Program (RSOP) NTG values of 93% for showerheads and faucet aerators, and the APSC-stipulated NTG values of 80% for filter alarms and LED night-lights and 63% for the CFLs. 25 The weighted NTG per kit is 78%. Table 30. Net Energy Savings per Energy-Efficiency Kit Measure 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 Two 13-Watt CFLs 63% High-Efficiency Showerhead 93% Kitchen Aerator 93% FilterTone Alarm 80% LimeLite NightLight 80% Energy Efficient Kit 78% Evaluation Findings and Conclusions The following section presents the program-specific evaluation findings. Under each topic area, we present a concluding statement, followed by findings that support the concluding statement. Status of Recommendations Empire completed all remaining recommendations. Despite a lack of resources, the energy-efficiency coordinator reported completing the one recommendation from There were no outstanding 2012 recommendations (Table 31). 25 Per APSC Docket No R Order No. 15, dated March 7,

68 Table 31. Status of School Based Energy Education Program Recommendations Year Recommendation 2013 Status 2013 Review future program goals to ensure they reflect the potential participant population. Complete (Considered/Rejected). Empire determined it is not prudent to reset goals mid-program cycle, but will investigate goal revisions during the planning period for the program cycle. Program Design and Delivery Overall, the SBEE program has had a mixed record of achieving energy savings, demand reduction, and participation goals over the past three years. Although the program has historically exceeded the demand-reduction goals, it only exceeded energy savings once, in 2012, by 1%. Therefore, Empire may need to examine the approach used to set demand-reduction goals during the next portfolio-planning phase. In addition, the drastic changes in participation achievement (101% in 2012, 93% in 2013, and 20% in 2014) do no lend themselves to a sustained long-term program. Furthermore, as discussed in the impact findings section and shown in Table 32, individual measure installation rates dropped. Table 32. Installation Rate Decrease by Measure Measure CFLs 68% 1 st bulb: 67% 2 nd bulb: 58% Bathroom Aerator 58% 39% Kitchen Aerator 55% 37% FilterTone Alarm 52% 25% LED Night Light 90% 79% Recommendations Based on the 2014 impact and process evaluation, the Evaluation Team suggests the following recommendations for the SBEE Program: Examine how goals are determined during the next portfolio-planning phase to ensure they appropriately reflect savings potential given the program s ability to address only one grade level per year. To sustain long-term participation in the SBEE Program, develop and maintain relationships with participating teachers and use a simple recruitment process for one (and the same) grade level each year. 37

69 To encourage greater engagement from pupils, their families, and classroom teachers, review the promotion procedures and materials utilized for measure installation and explore the possibility of offering incentives such as competitions where the classroom that installs the most measures receive a prize (e.g., pizza party). 38

70 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 seasonal energy efficiency rating (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; and Programmable thermostats purchased from and installed by the contractor who installs the new cooling system. In addition to financial incentives, Empire provides local contractors with the opportunity to attend relevant HVAC training sessions. However, similar to 2013, no contractors in the Arkansas service territory attended trainings in Program Status Overview Although the High Efficiency Air Conditioning Program did not meet its participation, energy savings, or demand-reduction goals, the program maintained modest customer engagement. In 2014, the program reached two customers, equivalent to 2% of its participation goal (slightly down from 5% in 2013, but up from 0% in 2012); 10% of its energy-savings goal (slightly down from 15% in 2013, but still up from 0% in 2012); and 4% of its demand-reduction goals (slightly down from 6% in 2013, but still up from 0% in 2012). Participants installed two of eight possible measures. Table 33, Table 34, and Table 35 summarize the participation and program-level ex post verified and net energy and peak demand savings compared with program goals. 26 Empire offered these trainings in nearby Joplin, Missouri. 39

71 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 9 0 0% CAC SEER 17 Ductless Mini-Split 3 0 0% ASHP SEER 15 to 15.9 Heat Pump % ASHP SEER 16 to 16.9 Heat Pump 2 0 0% ASHP SEER 17 Heat Pump % Programmable Thermostat Programmable Thermostat 8 0 0% Room Air Conditioner Room Air Conditioner % Total % * Participation is defined as the number of individual measures distributed in Program Year Table High Efficiency Air Conditioning Program Net kwh Savings Energy Type Program Net Savings Goal* Evaluated Net Savings Percent of Goals Achieved 2012 kwh 18, % 2013 kwh 33,285 4,942 15% 2014 kwh 33,285 3,442 10% * The Evaluation Team derived these savings goals from the 2011 Empire Arkansas Energy Efficiency Portfolio Filing. Program Year Table High Efficiency Air Conditioning Program Net kw Savings Energy Type Program Net Savings Goal* Evaluated Net Savings Percent of Goals Achieved 2012 kw % 2013 kw % 2014 kw % * The Evaluation Team derived these savings goals from the 2011 Empire Arkansas Energy Efficiency Portfolio Filing. Program Impact Review The Evaluation Team s impact analysis of the High Efficiency Air Conditioning Program consisted of verifying that the number of measures incented was consistent with the number reported in Empire s tracking database, reviewing the ex ante savings per measure, and applying a NTG value. Tracking Database Verification The Evaluation Team reviewed Empire s tracking database against the summary of measures and savings provided by Empire to verify the number of HVAC measures incented in 2014 and found that it was accurate (Table 36). 40

72 Reported Quantity of Measures Table 36. 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, the Evaluation Team reviewed each measure contained in the database using Arkansas TRM 4.0. Table 37 and Table 38 compare the results of the gross ex post savings per measure to ex ante savings. Table 37. 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 ASHP SEER 15 to ,166 1,805 ASHP SEER 17 2,449 3,573 * The Evaluation Team derived these ex ante savings per measure from the 2011 Empire Arkansas Energy Efficiency Portfolio Filing. Table 38. Gross Ex Ante and Ex Post Peak Demand Savings per Measure Measure Gross Ex Ante Reported kw Savings Per Measure* Gross Ex Post Evaluated kw Savings Per Measure ASHP SEER 15 to ASHP SEER * The Evaluation Team derived these ex ante savings per measure from the 2011 Empire Arkansas Energy Efficiency Portfolio Filing. Overall, the High Efficiency Air Conditioning Program realized 117% of its reported gross electric savings and 113% of its gross reported demand reductions. Air-Source Heat Pump The Evaluation Team evaluated the electric and demand savings for two air source heat pumps based on the unit size, SEER, and heating seasonal performance factor (HSPF) using the deemed savings values from Arkansas TRM 4.0. SEER values and unit sizes were provided in the tracking database, and the HSPF value was determined by looking up the model number. Based on this information, Empire savings of 1,805 kwh 27 and 0.33 kw for the ASHP SEER 15 to 15.9 unit and 3,573 kwh 28 and 0.62 kw for the ASHP SEER 17 unit This total is the sum of 527 kwh for the cooling savings and 1,278 kwh for the heating savings. This total is the sum of 1,086 kwh for the cooling savings and 2,487 kwh for the heating savings. 41

73 Table 39. Air Source Heat Pump Configurations Measure SEER Unit Size HSPF ASHP SEER 15 to ASHP SEER Net-to-Gross Table 40 provides the gross and net savings per measure. The Evaluation Team assigned a NTG value of 64%, derived from the 2013 evaluation of SWEPCO s RSOP, which provided incentives for heat pumps and central air conditioners (along with other items). The SWEPCO evaluation calculated NTG by surveying single-family homeowners for freeridership and spillover effects. Measure NTG Table 40. 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 ASHP SEER 15 to % 1,805 1, ASHP SEER 17 64% 3,573 2, Evaluation Findings and Conclusions The High Efficiency Air Conditioning Program findings and conclusions apply to the portfolio overall and were therefore included in the portfolio-level Evaluation Findings and Conclusions section. Those findings and conclusions outline program performance challenges, marketing and outreach, budget expenditures, administrative limitations, and trade-ally restrictions. Recommendations The Evaluation Team did not identify any program-specific recommendations for the High Efficiency Air Conditioning Program in

74 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 mail-in rebate application and corresponding documentation to Empire. After reviewing the application to verify the customer s eligibility and measure qualification, Empire mails a rebate back to the customer. Program Status Overview As in 2013, the ENERGY STAR Appliances Program did not meet its participation, energy savings, or demand-reduction goals. In 2014, the program achieved 6% of its participation goal (slightly down from 7% in 2013 and up from 0% in 2012), 0.4% of its energy savings goal (slightly down from 1% in 2013, but up from 0% in 2012), and 3.4% of its demand-reduction goal (slightly down from 1% in 2013, but up from 0% in 2012). Similar to the High Efficiency Air Conditioning Program, participants installed only two of the four measures offered. Table 41, Table 42, and Table 43 summarize the participation, program-level ex post verified and net energy and peak demand savings compared with goals. Measure Table ENERGY STAR Appliances Program Participation Versus Goals* 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

75 Program Year Table ENERGY STAR Appliances Program Net kwh Savings Energy Type Program Net Savings Goal* Evaluated Net Savings Percent of Goals Achieved 2012 kwh 29, % 2013 kwh 54, % 2014 kwh 54, % * The Evaluation Team derived these savings goals from the 2011 Empire Arkansas Energy Efficiency Portfolio Filing. Program Year Table ENERGY STAR Appliances Program Net kw Savings Energy Type Program Net Savings Goal* Evaluated Net Savings Percent of Goals Achieved 2012 kw % 2013 kw % 2014 kw % * The Evaluation Team derived these savings goals from the 2011 Empire Arkansas Energy Efficiency Portfolio Filing. Program Impact Review The Evaluation Team s analyzed ENERGY STAR Appliances Program impacts by 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 The Evaluation Team reviewed Empire s tracking database against the summary of measures and savings provided by Empire to verify the number of appliance measures incented in 2014 and found that it was accurate (Table 44). Reported Quantity of Measures Table 44. 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, the Evaluation Team reviewed deemed savings for each reported measure in the Arkansas TRM. Table 45 and Table 46 compare the results of the gross ex post savings per measure to ex ante savings. 44

76 Table 45. 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 74 5 Refrigerator * The Evaluation Team derived these ex ante savings per measure from the 2011 Empire Arkansas Energy Efficiency Portfolio Filing Table 46. Gross Ex Ante and Ex Post Peak Demand Savings per Measure Measure Gross Ex Ante Reported kw Savings Per Measure* Gross Ex Post Evaluated kw Savings Per Measure Dishwasher Refrigerator * The Evaluation Team derived these ex ante savings per measure from the 2011 Empire Arkansas Energy Efficiency Portfolio Filing Dishwashers The deemed savings values for dishwashers in TRM 3.0 are dependent on water fuel type. Since all participants who purchased ENERGY STAR dishwashers through the program had gas water heaters, the Evaluation Team only applied the TRM deemed values for gas water heaters to produce gross ex post savings of 5 kwh and kw for each dishwasher sold through the ENERGY STAR Appliances Program (Table 47). Table 47. Arkansas TRM Version 4.0 Deemed Dishwasher Savings Water Heater Fuel Type kwh Savings per Unit kw Savings per Unit Gas Electric The evaluated per unit dishwasher savings decreased from 2013 for two reasons. First, in 2013, some participants had electric water heaters, which produce more electric savings, whereas in 2014, all participants reported having gas water heaters. Second, dishwasher savings were adjusted downward in TRM 4.0 regardless of water-heater fuel type. Refrigerators The TRM 4.0 method for calculating unit energy savings for refrigerators requires inputting the volume of the refrigerator that was replaced. As this data was unavailable, the Evaluation Team deferred to TRM 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 48 shows the deemed savings by replacement type. 45

77 Table 48. Arkansas TRM Version 1.0 Deemed Refrigerator Savings Replacement Type kwh Savings per Unit kw Savings per Unit On Failure Early As data on replacement type was unavailable, the Evaluation Team assumed that all participants replaced their refrigerators on failure of the existing unit and assigned the more conservative estimate of 123 kwh and kw to each refrigerator. This assumption is partially based on economic conditions in Empire s territory, which do not favor early replacement, and is consistent with the approach we used to evaluate the Entergy Arkansas and SWEPCO efficiency portfolios. Net-to-Gross Table 49 provides the gross and net savings per ENERGY STAR appliance measure. The Evaluation Team assigned the APSC-stipulated NTG value of 80% 29 as no comparative program evaluation in Arkansas for NTG research was available for appliances. 30 Measure NTG Table 49. 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 ENERGY STAR Appliances Program findings and conclusions apply to the portfolio overall and were therefore included in the portfolio-level Evaluation Findings and Conclusions section. Those findings and conclusions outline program performance challenges, marketing and outreach, budget expenditures, administrative limitations, trade-ally restrictions, and data tracking. Recommendations The Evaluation Team did not identify any program-specific recommendations for the ENERGY STAR Appliances Program in Per APSC Docket No R Order No. 15, dated March 7, Although the 2014 SWEPCO and EAI evaluations will include secondary research to support NTG values for appliances, that information was not available at the time of this report. 46

78 Program Description Residential Weatherization Program Through the Residential Weatherization Program, Empire provides free low-cost home weatherization improvements to customers within its service territory. The program was active only during the fourth quarter of the year to maximize the efficiency of the contractors schedules. Empire sends out introduction letters to targeted customers, and the contractors conduct follow-up phone calls to schedule the initial energy audit appointment and answer questions. Program Status Overview In comparison to 2013, the program achieved greater energy savings and demand reductions, exceeding its energy goal by 6% but falling short of the demand-savings goal by 12%. In addition, the program nearly met its measure-level participation targets with 106 of 108 projected. Table 50, Table 51, and Table 52 summarize participation by measure, as well as the program-level ex post verified and net energy and peak demand savings compared with the program goals. Table Residential Weatherization Program Internal Participation Target Measure 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) % 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** % * Participation goals reported in the amendment to the 2011 Empire Arkansas Energy Efficiency Portfolio Filing. ** The reported goal is based on household participation; however the program encourages the installation of multiple measures per home. 47

79 Program Year Table Residential Weatherization Program Net kwh Savings Energy Type Internal Program Net Savings Target* Evaluated Net Savings Percent of Internal Goals Achieved 2013 kwh 46,256 23,817 51% 2014 kwh 46,256 48, % * The Evaluation Team derived these savings goals from the amendment to the 2011 Empire Arkansas Energy Efficiency Portfolio Filing. Program Year Table Residential Weatherization Program Net kw Savings Energy Type Internal Program Net Savings Target* Evaluated Net Savings Percent of Internal Goals Achieved 2013 kw % 2014 kw % * The Evaluation Team derived these savings goals from the amendment to the 2011 Empire Arkansas Energy Efficiency Portfolio Filing. Program Impact Review The Evaluation Team s impact analysis of the Residential Weatherization Program 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 The Evaluation Team reviewed Empire s tracking database against the summary of measures and savings provided by Empire to verify the number of appliance measures incented in 2014 and found that it was accurate (Table 53). Reported Quantity of Measures Table 53. 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, the Evaluation Team reviewed most measures in the database against Arkansas TRM 4.0. Table 54 and Table 55 compare the results of the gross ex post savings per measure to ex ante savings. 48

80 Measure Table 54. 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 and electric) 29, Attic Insulation (electric) 10, Air Infiltration (gas and electric) 14, Air Infiltration (electric) 2, Pipe Insulation (gas) Pipe Insulation (electric) w-17w CFL * One unit defined as one square foot for insulation, CFM reduction for air infiltration, and number of units for all other measures. ** The Evaluation Team derived these ex ante savings per measure from the tracking database, except for pipe insulation, in which case the ex ante savings were derived from the amendment to 2011 Empire Arkansas Energy Efficiency Portfolio Filing. Measure Table 55. 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) 29, Attic Insulation (electric) 10, Air Infiltration (gas & electric) 14, Air Infiltration (electric) 2, Pipe Insulation (gas) Pipe Insulation (electric) w-17w CFL * One unit defined as one square foot for insulation, CFM reduction for air infiltration, and number of units for all other measures. ** The Evaluation Team derived these ex ante savings per measure from the tracking database, except for pipe insulation, in which case the ex ante savings were derived from the amendment to the 2011 Empire Arkansas Energy Efficiency Portfolio Filing. Attic Insulation The Evaluation Team evaluated attic insulation using the updated deemed savings values cited in TRM Version 4.0. The TRM provides deemed savings values based on weather zone (Empire is in weather zone 9) and heating type. Empire provided attic insulation pre R-values and the Evaluation Team made the assumption that all attic insulation was brought up to a post-retrofit value of R-38. (This information was not recorded; however, Empire confirmed that all houses were brought to this level.) We updated ex ante reported savings for electrically heated and cooled homes from 3.32 kwh/sqft and kw/sqft homes to 3.05 kwh/sqft and kw/sqft. We also updated ex ante reported 49

81 savings for gas heated and electrically cooled homes 0.74 kwh/sqft and kw/sqft homes to 0.65 kwh/sqft and kw/sqft. Decreases in savings per square foot of insulation are likely due to adjustments in the deemed savings value in version 4.0 of the TRM compared to other versions; however, the Evaluation Team did not receive the planning inputs and assumptions for attic insulation. Air Infiltration The Evaluation Team evaluated air infiltration using the updated deemed savings values cited in the TRM 4.0. The TRM provides deemed savings values based on weather zone (Empire is in weather zone 9) and heating type. We updated ex ante reported savings for electrically heated and cooled homes from 2.47 kwh/cfm reduction and kw/cfm to kwh/cfm and kw/cfm. We also updated ex ante reported savings for gas and electrically heated/cooled homes from 0.19 kwh/cfm and kw/cfm for gas to 0.17 kwh/cfm and kw/cfm. The deemed values for electricity and demand savings per reduction in CFM50 did not change from version 3.0 to 4.0 and therefore remain unchanged from the evaluated 2013 savings. Pipe Insulation The Evaluation Team cited deemed savings per installation from TRM 1.0 to evaluate pipe insulation because the more recent versions of the TRM require inputs such as the R-value of the installed pipe wrap and the length and diameter of the pipe that received the installation. Program contractors did not collect this information onsite during installation. The Evaluation Team updated the ex ante reported savings for pipe insulation from kwh to 44.0 kwh per installation and kw to kw. CFLs The Evaluation Team calculated the energy savings (kwh) per CFL as: (( ) (( ) We calculated the peak demand savings per CFL as: (( ) (( ) Table 56 outlines the variable definitions, inputs, and sources the Evaluation Team used to calculate the ex post savings per bulb. 50

82 Table 56. CFL Algorithm Inputs and Sources Variable Definition Inputs Source 13w-17w W base Rated wattage of removed incandescent lamp 43* Arkansas TRM 4.0 Volume II 13w-17w W post Rated wattage of installed CFL 13 Program bulb wattage of 13W reported by program staff 1,000 Conversion factor of watts to kilowatts 1,000 Assumed Hours Annual operating hours Arkansas TRM 4.0 Volume II ISR In-service rate 0.86 Arkansas TRM 4.0 Volume II IEF E Interactive effects factor for energy savings 0.97 Arkansas TRM 4.0 Volume II CF Peak coincidence factor 0.09 Arkansas TRM 4.0 Volume II IEF D Interactive effects factor for demand savings 1.25 Arkansas TRM 4.0 Volume II * As all CFL installations occurred after June 2014, the EISA baseline changes apply to all 100-, 75-, and 60-watt equivalent bulbs. Net-to-Gross Table 57 provides the gross and net savings per weatherization unit. The Evaluation Team assigned a NTG value of 64% for the weatherization measures from SWEPCO s 2013 RSOP evaluation, which provided incentives for insulation and air infiltration. Cadmus assigned a NTG of 64% for the program CFLs (from SWEPCO s 2013 CFL Program evaluation). Measure Table 57. 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) 64% Attic Insulation (electric) 64% Air Infiltration (gas & electric) 64% Air Infiltration (electric) 64% Pipe Insulation (gas) 64% Pipe Insulation (electric) 64% w-17w CFL 64% * One unit defined as one square foot for insulation, CFM for air infiltration, and number of bulb for CFLs. Evaluation Findings and Conclusions The Residential Weatherization Program findings and conclusions apply to the portfolio overall and were therefore included in the portfolio-level Evaluation Findings and Conclusions section. Those findings and conclusions outline portfolio marketing and outreach challenges, administrative limitations, and data tracking. 51

83 Recommendations The Evaluation Team did not identify any program-specific recommendations for the Residential Weatherization Program in However, the addition of a statewide weatherization program, currently under development, may affect how the Residential Weatherization Program currently runs. 52

84 Program Description AC Tune-Up Program Through the AC Tune-Up Program, Empire provides low-cost HVAC inspections, tune-ups, and duct repair opportunities to customers who own single-family homes within its service territory. Customers may contract for air conditioning tune-up and inspection services with Empire-approved, certified, and licensed HVAC contractors. Empire offers a $75 rebate for the HVAC tune-up alone. However, when duct repairs are included, Empire will provide up to $300. Empire pays both rebates directly to the contractor, who deducts the total rebate value from the customer invoice. The AC Tune-Up Program is offered in conjunction with the Residential Weatherization Program. Program Status Overview Although 2014 was the program s first full year, it had very little participation, achieving only 1.6% of Empire s energy-savings goal and 1.9% of its demand-reduction target. Table 58 and Table 59 summarize participation by measure, as well as the program-level ex post verified and net energy and peak demand savings compared with program goals. Measure Table AC Tune-Up Program Internal Participation Target Participation Goals* (Households) Reported Participation Percent of Participation Achieved AC Tune-Up % Duct Sealing (gas) % Duct Sealing (electric) 2 0 0% Total % * The Evaluation Team derived participation goals from the amendment to the 2011 Empire Arkansas Energy Efficiency Portfolio Filing. Table AC Tune-Up Program Net kwh and kw Savings Energy Type Program Net Savings Goal* Evaluated Net Savings Percent of Goals Achieved kwh 18, % kw % * The Evaluation Team derived these savings goals from the amendment to the 2011 Empire Arkansas Energy Efficiency Portfolio Filing. Program Impact Review For the impact analysis of the AC Tune-Up Program, the Evaluation Team verified that the number of measures distributed and projects completed were consistent with those listed in the tracking database, reviewed the ex ante savings per measure, and applied a NTG value. 53

85 Tracking Database Verification The Evaluation Team reviewed Empire s tracking database against the summary of measures and savings provided by Empire to verify the number of appliance measures incented in 2014 and found that it was accurate (Table 60). Reported Quantity of Measures Table 60. 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 AC Tune-Up Program, the Evaluation Team reviewed the measures in the database against the deemed values in Arkansas TRM 4.0. Table 61 and Table 62 compare the results of the gross ex post savings per measure to ex ante savings. Measure Table 61. 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 AC Tune-Up * The Evaluation Team derived these ex ante savings per measure from the 2011 Empire Arkansas Energy Efficiency Portfolio Filing. Measure Table 62. 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 AC Tune-Up * The Evaluation Team derived these ex ante savings per measure from the 2011 Empire Arkansas Energy Efficiency Portfolio Filing. 54

86 AC Tune-Up The Evaluation Team calculated the energy savings (kwh) for a single AC tune-up as: ( ) ( ) The Evaluation Team calculated the peak demand savings (kw) for a single AC tune-up as: ( ) ( ) Table 63 outlines the variable definitions, inputs, and sources the Evaluation Team used to calculate the ex post savings. Table 63. AC Tune-Up Algorithm Inputs and Sources Variable Definition Inputs Source Capacity Rated equipment cooling capacity (Btu/hr) 48,000 Program data (4 ton system) EFLH C Equivalent full-load cooling hours 1,233 Arkansas TRM 4.0 Volume II for weather zone 9 EL Efficiency Loss Percentage 8.1% 2013 Entergy Report EER pre EER post Adjusted efficiency of the cooling equipment before tune-up: (1-EL)* EER post Nameplate efficiency of the existing cooling equipment Arkansas TRM 4.0 Volume II 11.2 Program data CF Peak coincidence factor 0.87 Arkansas TRM 4.0 Volume II Net-to-Gross Table 64 provides the gross and net savings per AC tune-up. Cadmus assigned the NTG value of 64% from SWEPCO s 2013 RSOP evaluation, which provided incentives for AC tune-ups. 55

87 Measure Table 64. 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 AC Tune-Up 64% Evaluation Findings and Conclusions The AC Tune-Up Program findings and conclusions apply to the portfolio overall and were therefore included in the portfolio-level Evaluation Findings and Conclusions section. Those findings and conclusions outline portfolio performance challenges, marketing and outreach, budget expenditures, administrative limitations, trade-ally restrictions, and data tracking. Recommendations The Evaluation Team did not identify any program-specific recommendations for the AC Tune-Up Program in

88 Program Description C&I Custom Program Through the C&I Custom Program, Empire provides incentives to C&I customers that install, replace, or retrofit electric savings measures. Eligible measures include, but are not limited to: Lighting and/or lighting controls; Unitary HVAC equipment (packaged HVAC units, split systems, heat pumps, etc.); Air- or water-cooled central chillers; Commercial refrigeration equipment; Commercial or industrial energy recovery equipment and economizers; High-efficiency air compressors; and Energy management and control systems. The program includes a $20,000 cap per project during 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 C&I Custom Program had one participant in 2014 and did not meet its participation, energy-savings, or demand-reduction goals in Table 65 and Table 66 summarize participation at a measure level and show the program-level ex post verified and net energy and peak demand savings compared with goals. Participation Goal Table C&I Custom Program Participation Goals* Reported Participation Percent of Participation Achieved % *Participation is defined as the number of customers installing measures through the Program. Table C&I Custom Program Net kwh and kw Savings Energy Type Program Net Savings Goal* Evaluated Net Savings Percent of Goals Achieved kwh 229,797 55,453 24% kw % * The Evaluation Team derived these savings goals from the amendment to the 2011 Empire Arkansas Energy Efficiency Portfolio Filing. 31 In the 2013 report, this one participant was documented under the C&I Prescriptive Program. However, as Empire calculates the project savings on a custom basis, the projects are now tracked under C&I Custom. 57

89 Program Impact Review The Evaluation Team s impact analysis of the C&I Custom 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 The Evaluation Team 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 67). Reported Quantity of Measures Table 67. 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 Custom Program, the Evaluation Team reviewed each measure contained in the database against values in the Arkansas TRM 4.0. Table 68 and Table 69 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 total savings by measure. Measure Table 68. Gross Ex Ante and Ex Post Energy Savings Gross Ex Ante Reported Quantity kwh Savings* Gross Ex Post Evaluated kwh Savings Lighting Retrofit ,043 62,087 Lighting Sensors 7 7,410 Total ,087 55,453 * The Evaluation Team derived the ex ante savings per measure using data the tracking database for lighting retrofits and sensors combined. Lighting Measure Table 69. Gross Ex Ante and Ex Post Peak Demand Savings Quantity Gross Ex Ante Reported kw Savings* Gross Ex Post Evaluated kw Savings Lighting Retrofit Lighting Sensors Total * The Evaluation Team derived the ex ante savings per measure using data the tracking database for lighting retrofits and sensors combined. 58

90 Overall, the C&I Custom Program realized 89% of gross electricity (kwh) savings and 125% of gross demand savings. The gross ex post electricity savings were lower than the ex ante savings due to a different methodology used to determine lighting sensor savings, and also a decrease in the interactive energy factor in the ex post calculations. The claimed savings applied a 50% savings factor to all lighting that received either occupancy sensors or daylighting control, whereas the Evaluation Team calculated lighting sensor savings separately using Arkansas TRM 4.0, which derives lighting sensor savings using a power adjustment factor based on control type. Lighting Retrofit The Evaluation Team calculated the energy savings (kwh) per set of lighting fixtures as: ([ ( ( ] [ ( ( ] ) We calculated the peak demand savings per set of light fixtures as: ([ ( ( ] [ ( ( ] ) Table 70 outlines the variable definitions, inputs, and sources the Evaluation Team used to calculate the ex post savings per fixture group. Table 70. Light Retrofit Algorithm Inputs and Sources Variable Definition Inputs Source N fixt(i), pre Pre-retrofit number of fixtures type (i) Actual Program Data N fixt(i), post Pre-retrofit number of fixtures type (i) Actual Program Data W fixt(i), pre Rated wattage of pre-retrofit fixtures of type (i) Actual Program Data W fixt(i), post Rated wattage of post-retrofit fixtures of type (i) Actual Program Data 1,000 Conversion factor for watts to kilowatts 1,000 Assumed AOH annual operating hours Actual Arkansas TRM 4.0 Volume II IEF E Interactive effects factor for energy savings 0.98 Arkansas TRM 4.0 Volume II CF Peak demand coincidence factor 0.90 Arkansas TRM 4.0 Volume II IEF D Interactive effects factor for demand savings 1.20 Arkansas TRM 4.0 Volume II 59

91 Lighting Controls The Evaluation Team calculated the energy savings (kwh) per set and type of lighting controls as: ( We calculated the peak demand savings per set and type of light controls as: ( Table 71 outlines the variable definitions, inputs, and sources the Evaluation Team used to calculate the ex post savings per lighting control installation. Table 71. Lighting Control Algorithm Inputs and Sources Variable Definition Inputs Source N fixt Number of fixtures Actual Program Data W fixt Rated wattage of post-retrofit fixtures Actual Program Data 1,000 Conversion factor for watts to kilowatts 1,000 Assumed PAF occupancy PAF daylighting Stipulated power adjustment factor for occupancy sensors Stipulated power adjustment factor based for daylighting controls Arkansas TRM 4.0 Volume II Arkansas TRM 4.0 Volume II AOH Annual operating hours Actual Arkansas TRM 4.0 Volume II IEF E Interactive effects factor for energy savings 0.98 Arkansas TRM 4.0 Volume II CF Peak demand coincidence factor 0.90 Arkansas TRM 4.0 Volume II IEF D Interactive effects factor for demand savings 1.20 Arkansas TRM 4.0 Volume II Net-to-Gross Table 72 provides gross and net savings by measure. The Evaluation Team assigned the NTG value of 100%, derived from the 2013 evaluation of SWEPCO s Commercial and Industrial Energy Efficiency Program (CIEEP). The SWEPCO NTG value was calculated using participant surveys to determine freeridership and spillover. Measure NTG Table 72. Net Energy Savings per Measure Gross Ex Post Energy Savings Net Energy Savings Gross Ex Post Demand Reduction Net Demand Reduction Lighting Retrofit 100% 48,043 48, Lighting Controls 100% 7,410 7,

92 Evaluation Findings and Conclusions The C&I Custom Program findings and conclusions apply to the portfolio overall and were therefore included in the portfolio-level Evaluation Findings and Conclusions section. Those findings and conclusions outline portfolio performance, marketing and outreach, budget expenditures, administrative limitations, and trade-ally restrictions. Recommendations The Evaluation Team did not identify any program-specific recommendations for the C&I Custom Program in

93 Appendix A: Cost-Effectiveness Results by Program The Evaluation Team analyzed program benefits and costs of Empire s energy efficiency programs and for the entire portfolio to determine cost-effectiveness. The Team used Cadmus DSM Portfolio Pro 32 model for the cost-effectiveness evaluation. The Team calculated the benefit/cost ratios for these perspectives based on methods described in the California Standard Practice Manual for assessing DSM programs cost-effectiveness. We estimated cost-effectiveness from four perspectives. 1. Total Resource Cost (TRC) Test: From this perspective, the Team examined program benefits and costs from Empire and Empire customers perspectives, combined. On the benefit side, it included avoided electric and gas (where applicable) energy costs for generation, transmission, distribution capacity, and line losses. On the cost side, it included costs incurred by both the utility (program administrative costs and incentives) and participants (measure costs). 2. Program Administrator Cost Test (PAC): From this perspective, the Team examined program benefits and costs from Empire s perspective only. On the benefit side, it included avoided electric energy costs for generation, transmission, distribution capacity, and line losses. On the cost side, it included program administration, implementation, and incentive costs associated with program funding. 3. Ratepayer Impact Measure (RIM) Test: All ratepayers (participants and nonparticipants) may experience rate increases designed to recover lost revenues. For this test, the Team included all Empire program costs, incentives, and lost revenues. The RIM benefits included the same components as the PAC benefits. 4. Participant Cost Test (PCT): From this perspective, program benefits included participant bill reductions due to the energy saved and incentives received from the program. PCT costs included a measure s incremental cost (compared to the baseline measure) plus installation costs incurred by the customer. Table 73 summarizes the four tests components. 32 DSM Portfolio Pro has been independently reviewed by various utilities, their consultants, and a number of regulatory bodies, including the Iowa Utility Board, the Public Service Commission of New York, the Colorado Public Utilities Commission, and the Nevada Public Utilities Commission. 62

94 Table 73. Benefits and Costs Included in Various Cost-Effectiveness Tests Benefit/Cost TRC PAC RIM PCT Benefits Costs Present value of electric avoided energy and capacity costs* Present value of and gas avoided costs* Present value of bill savings and incentives received Program administrative and marketing costs Incremental measure costs incurred by participants Incentive costs Present value of utility lost revenues Installation costs * The present value of electric avoided energy and capacity costs includes avoided line losses occurring from reductions in customer electric use. Present value also includes avoided transmission and distribution benefits. Tasks involved in this activity are described below. Data Collection The Evaluation Team populated DSM Portfolio Pro with avoided energy and capacity costs, discount rates, measure information, administrative costs, and other relevant data. Working with Empire staff, the Team gathered and imported the following data into the cost-effectiveness model: Utility level inputs Electric and gas avoided energy costs (estimated by Cadmus) Electric avoided generation, transmission, and distribution capacity costs (estimated by Cadmus) Customer retail rates by customer sector (provided by Empire) Load shapes by customer sector and end use (heating, cooling, lighting, and other) (provided by Cadmus) Discount rates (provided by Empire) Line losses by customer sector (provided by Empire) Program and measure data Program costs (provided by Empire) Deemed gas savings for air infiltration, ceiling insulation, and pipe insulation in the Residential Weatherization program Measure lives (from the TRM 4.0 Volume 2) Measure costs (reviewed by the Team and sourced from several secondary sources) NTG ratios (from the 2014 portfolio evaluation report) Program participation (from the 2014 portfolio evaluation report) 63

95 Table 74 displays selected cost-analysis inputs for the discount rate the Team used for each test to determine the present value of future benefits and lost revenues. The table includes line losses by customer sector used to convert participant savings to savings at the generator. Empire provided all of these values, except for the participant discount rate, which the Evaluation Team derived from secondary sources on personal loan interest rates in Arkansas. Table 74. Selected Cost Analysis Inputs Input Description 2014 Discount Rate TRC, PAC, and RIM 5.71% Discount Rate PCT 10.00% Energy Line Loss All Sectors 4.19% Demand Line Loss All Sectors 4.22% Table 75 displays Empire s 2014 incentive and non-incentive costs by program. Below is a list of programs that were included in the comparison. Air Conditioning Tune-up Program Commercial and Industrial Custom Program Energy Star Appliance Program High Efficiency Air Conditioning Program Online Home Audit Tool Residential High Efficiency Lighting Program Residential Weatherization Program School Based Energy Education Program Regulatory/EM&V Costs: Regulatory and EM&V costs applied at portfolio level 64

96 Table 75. Empire 2014 Program Costs* Program Name Non-Incentive Costs Incentives Total Program Costs AC Tune-Up $0 $300 $300 C&I Custom $2,011 $17,499 $19,510 Energy Star Appliances $1,296 $350 $1,646 High Efficiency Air Conditioning $1,296 $900 $2,196 Online Home Audit Tool $729 $0 $729 Residential High Efficiency Lighting $669 $7,341 $8,009 Residential Weatherization $889 $56,887 $57,776 School Based Energy Education $345 $6,040 $6,385 Regulatory/EM&V Costs $17,440 $0 $17,440 Portfolio $24,675 $89,317 $113,991 * Totals may not sum due to rounding. The Team analyzed the cost-effectiveness of each 2014 program, as well as for the entire portfolio, from each of the four test perspectives mentioned above. The only exception was for Regulatory/EM&V Costs, which are only costs applied to the portfolio. Results Table 76 displays the 2014 portfolio cost-effectiveness results, including the levelized costs of conserved energy, the present value of costs, benefits, net benefits, and benefit/cost ratios. Empire s 2014 portfolio was only cost-effective from the PCT perspective (a 1.0 or greater benefit/cost ratio is considered cost-effective). The RIM test measures the impact of programs and portfolios on customer rates. Many programs do not pass the RIM test because a utility s avoided energy savings are usually less than the lost revenues and operating costs of the program. When this happens, program nonparticipants are paying for benefits accrued by the participants through higher rates. The RIM test only passes if rates will go down as a result of the program or portfolio, and this usually only happens in instances in which the program targets the highest marginal cost hours (when marginal costs are greater than rates). Cost-Effectiveness Test Table 76. Empire 2014 Portfolio Cost-Effectiveness Levelized $/kwh Costs Benefits Net Benefits Benefit/ Cost Ratio Total Resource Cost (TRC) $0.080 $105,321 $98,529 ($6,791) 0.94 Program Administrator Cost (PAC) $0.086 $113,991 $60,967 ($53,025) 0.53 Ratepayer Impact (RIM) N/A $345,491 $60,967 ($284,524) 0.18 Participant Cost (PCT) N/A $34,800 $272,776 $192, Table 77 provides a summary of the 2014 benefit/cost ratios of each program by test perspective. In the table, N/A indicates that the present value of costs from that perspective was less than or equal to 65

97 zero. A benefit/cost ratio of 0.00 indicates that the present value of costs was greater than zero and the present value of benefits was zero. Table 77. Empire 2014 Benefit/Cost Ratios by Program and Test Perspective Program Name Benefit/Cost Ratio TRC PAC RIM PCT B/C Ratio AC Tune-Up C&I Custom Energy Star Appliances High Efficiency Air Conditioning Online Home Audit Tool N/A Residential High Efficiency Lighting N/A Residential Weatherization N/A School Based Energy Education N/A Portfolio The following contains details of the Evaluation Team s cost-effectiveness analysis results for all programs listed above. Table 78 shows the cost-effectiveness results for the Air Conditioning Tune-up Program, which is costeffective from the TRC and PCT perspectives. Cost-Effectiveness Test Table 78. Empire 2014 Air Conditioning Tune-up Program Cost-Effectiveness Levelized $/kwh Costs Benefits Net Benefits Benefit/ Cost Ratio Total Resource Cost (TRC) $0.041 $99 $113 $ Program Administrator Cost (PAC) $0.122 $300 $113 ($187) 0.38 Ratepayer Impact (RIM) N/A $612 $113 ($499) 0.19 Participant Cost (PCT) N/A $99 $566 $ Table 79 shows the cost-effectiveness results for the Commercial and Industrial Custom Program, which is only cost-effective from the PCT perspective. Table 79. Empire 2014 Commercial and Industrial Custom Program Cost-Effectiveness Cost-Effectiveness Test Levelized $/kwh Costs Benefits Net Benefits Benefit/ Cost Ratio Total Resource Cost (TRC) $0.082 $34,208 $22,415 ($11,793) 0.66 Program Administrator Cost (PAC) $0.047 $19,510 $17,146 ($2,364) 0.88 Ratepayer Impact (RIM) N/A $66,543 $17,146 ($49,397) 0.26 Participant Cost (PCT) N/A $32,197 $58,265 $26, Table 80 shows the cost-effectiveness results for the Energy Star Appliance Program, which is only costeffective from the PCT perspective. 66

98 Cost-Effectiveness Test Table 80. Empire 2014 Energy Star Appliance Program Cost-Effectiveness Levelized $/kwh Costs Benefits Net Benefits Benefit/ Cost Ratio Total Resource Cost (TRC) $0.595 $1,509 $119 ($1,390) 0.08 Program Administrator Cost (PAC) $0.649 $1,646 $119 ($1,527) 0.07 Ratepayer Impact (RIM) N/A $1,990 $119 ($1,871) 0.06 Participant Cost (PCT) N/A $213 $613 $ Table 81 shows the cost-effectiveness results for the High Efficiency Air Conditioning Program, which is cost-effective from the PAC and PCT perspectives. Table 81. Empire 2014 High Efficiency Air Conditioning Program Cost-Effectiveness Cost-Effectiveness Test Levelized $/kwh Costs Benefits Net Benefits Benefit/ Cost Ratio Total Resource Cost (TRC) $0.083 $3,587 $2,345 ($1,242) 0.65 Program Administrator Cost (PAC) $0.051 $2,196 $2,345 $ Ratepayer Impact (RIM) N/A $8,167 $2,345 ($5,822) 0.29 Participant Cost (PCT) N/A $2,291 $5,341 $3, Table 82 shows the cost-effectiveness results for the Online Home Audit Tool, which does not produce energy or demand savings and has only costs and no benefits. Cost-Effectiveness Test Table 82. Empire 2014 Online Home Audit Tool Cost-Effectiveness Levelized $/kwh Costs Benefits Net Benefits Benefit/ Cost Ratio Total Resource Cost (TRC) N/A $729 $0 ($729) 0.00 Program Administrator Cost (PAC) N/A $729 $0 ($729) 0.00 Ratepayer Impact (RIM) N/A $729 $0 ($729) 0.00 Participant Cost (PCT) N/A $0 $0 $0 N/A Table 83 shows the cost-effectiveness results for the Residential Lighting Program, which is costeffective from the TRC perspective. The PCT benefit/cost ratio shown is not valid because participants do not incur direct costs in this program. Cost-Effectiveness Test Table 83. Empire 2014 Residential Lighting Program Cost-Effectiveness Levelized $/kwh Costs Benefits Net Benefits Benefit / Cost Ratio Total Resource Cost (TRC) $0.031 $5,367 $6,837 $1, Program Administrator Cost (PAC) $0.046 $8,009 $6,837 ($1,172) 0.85 Ratepayer Impact (RIM) N/A $30,148 $6,837 ($23,311) 0.23 Participant Cost (PCT) N/A $0 $26,489 $21,791 N/A 67

99 Table 84 shows the cost-effectiveness results for the Residential Weatherization Program, which is costeffective from the TRC perspective. The PCT benefit/cost ratio shown is not valid because participants do not incur direct costs in this program. Cost-Effectiveness Test Table 84. Empire 2014 Residential Weatherization Program Cost-Effectiveness Levelized $/kwh Costs Benefits Net Benefits Benefit/ Cost Ratio Total Resource Cost (TRC) $0.067 $37,297 $61,406 $24, Program Administrator Cost (PAC) $0.104 $57,776 $29,113 ($28,664) 0.50 Ratepayer Impact (RIM) N/A $197,231 $29,113 ($168,119) 0.15 Participant Cost (PCT) N/A $0 $161,598 $125,190 N/A Table 85 shows the cost-effectiveness results for the School Based Energy Education Program, which is cost-effective from the TRC perspective. The PCT benefit/cost ratio shown is not valid because participants do not incur direct costs in this program. Table 85. Empire 2014 School Based Energy Education Program Cost-Effectiveness Cost-Effectiveness Test Levelized $/kwh Costs Benefits Net Benefits Benefit/ Cost Ratio Total Resource Cost (TRC) $0.040 $5,085 $5,294 $ Program Administrator Cost (PAC) $0.050 $6,385 $5,294 ($1,091) 0.83 Ratepayer Impact (RIM) N/A $22,631 $5,294 ($17,337) 0.23 Participant Cost (PCT) N/A $0 $19,904 $19,903 N/A 68

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101 Appendix X-1