CA Nonresidential Standard Performance Contract Program PG&E, SCE, SDG&E
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1 Program Synopsis The California Non-residential Standard Performance Contract (NSPC) Program is targeted at customer efficiency projects and is managed on a statewide basis by Pacific Gas & Electric Company, Southern California Edison Company, and San Diego Gas & Electric Company. Program administrators offered fixed-price incentives (by end use) to project sponsors for measured kwh energy savings achieved by the installation of energy-efficiency measures. The fixed price per kwh, performance measurement protocols, payment terms, and other operating rules of the program were specified in a standard contract. Program Type Incentive PrescriptiveRebates CustomIncentivesSPC BillCreditsRateDiscounts Services DirectInstallation FinancingLoansLeasing FreeMeasures InHousePlusSubs IncentiveOther Information and Training GeneralEducation MailAudit TelephoneAudit OnSiteAudit OnLineAudit DesignAssistance FeasibilityStudies EndUserTraining TradeAllyTraining Program Focus Primary Market Events Targeted AllMarketEventsTargeted NewConstructionRenovation ExistingConstructionAll ExistingConstructionRetrofit ExistingConstructionNaturalReplac ExistingConstructionEarlyRetire Primary Program Focus EndUser SupplySide EndUserAndSupplySide Residential End User Target Markets ResidentialALL SingleFamily MultiFamily MobileHome LowIncome NR54-1
2 ResOther Commercial/Industrial End User Markets Commercial All Offices Retail Restaurant Public (govt.) Facilities Grocery Store Health Care Education Lodging (Hotels/Motels) Warehouses Industrial All Other Market Barriers End User Supply Side Information or Search Costs Performance Uncertainties Asymmetric Information and Opportunism Hassle or Transaction Costs Hidden Costs Misplaced or Split Incentives Product or Service Unavailability Externalities Non-Externality Pricing Inseparability of Product Features Access to Financing Bounded Rationality NR54-2
3 Organizational Practices or Customs Irreversibility Other End User Other Supply Side Customer Sizes Targeted (C/I only) VerySmall Small Medium Large Supply Side Actors Targeted SupplySideActorNotProgFocus AorEFirms Manufacturers Realtors Developers Builders Contractors TradeAssociations WholesalersDistributors Retailers EnergyServiceCompanies NonProfitNotForProfitGroups Govt Other Types of measure/end use technologies ALL MEASURES HVAC High Efficiency DX/HP High Efficiency Chillers High Efficiency Room/Terminal Economizers Control Systems Variable Speed Drives Occupancy Sensors Duct Sealing and Balancing Lighting Compact Fluorescents Electronic Ballasts Reflector Systems Efficient Fluorescent Lamps (T-8, T-5, etc.) Lighting Controls Occupancy Sensors High Intensity Discharge NR54-3
4 Equipment Testing/Tune-up Commissioning Retro-commissioning Space Heating Heat Pump Water Heating Load Control (Cycling) High Efficiency Insulation Blankets Low-Flow Showerheads Low-Flow Aerators Solar Assisted Motors High Efficiency Variable Speed Drives Industrial Process Compressed Air Motors Pumps Day lighting Applicances Refrigerators Dish Washers Clothes Washers Clothes Dryers Office Equipment Plug Load Building Envelope Insulation Infiltration Control Glazing and Glazing Control Windows Refrigeration High Efficiency Controls Variable Speed Compressors Multi-Stage Compressors Commissioning NR54-4
5 Other (specify) Program Context BPProgID: NR54 The CA Nonresidential SPC program has been in existence since The 1998 and 1999 program years were focused on market transformation goals. The early program years required extensive measurement of savings for all projects and based final incentive payments on measured results. Since the CA energy crisis of , the program has focused primarily on resource acquisition. In addition, over time the program has moved to using calculated savings and requires measured savings for only small percentage of projects. The program was fully subscribed almost immediately in 2002 as market demand appeared to greatly exceed available incentives. Program Components Program Management Utilities have full responsibility for implementation process. PG&E and SCE make significant use of subcontractors for technical support.the primary areas of sub-contractor technical support include: application assistance and review, review of savings estimates, on-site verifications, review of M&V (where applicable). Implementing Organization Utility Nonprofit Govt Private IOOther Implementation Structure InHouse TurnkeyContractor InHouseAndSubcontractors Other Reporting and Tracking Each utility maintains a detailed tracking database that tracks program applications, project sites, and measures by site. The databases also track all key milestones including application receipt, application approval, installation status, on-site verification, final approved savings and associated payments, etc. Information on energy efficiency service provider participation is also tracked. Accomplishments are also summarized quarterly in reports to the CPUC. In addition, the annual program evaluation includes integration of the individual CA IOU tracking data into a statewide summary. Verification and Quality Control On-site verification of measure installation is required for all projects. Pre-installation to verify baseline equipment and conditions is also required of all projects. Detailed engineering review is also required on all applications. The program managers and their technical support consultants have final responsibility for calculations of savings estimates upon which incentive payments are based. Measurement is required for a small percentage of projects. NR54-5
6 Participation Process BPProgID: NR54 Customers or energy efficiency service providers may submit applications. Project Sponsors conduct their own initial energy analysis. Project Sponsors submit their SPC application to the Utility Administrator. Pre-installation site inspection and application review is then conducted. The Utility Administrator then approves qualifying applications. After project installation, the Sponsor submits a Project Installation Report. The Utility Administrator conducts the postinstallation verification and approves the Installation Report, which includes any necessary adjustments to calculated savings. Upon approval of the Installation Report, the Project Sponsor receives the incentive payment. For Calculated Savings projects, 100% of the approved incentive is paid, for Measured Savings projects, 60% of the approved incentive is paid. If the project uses the Measured Savings approach, the equipment is operated for one year with the Project Sponsor performing the agreed upon M&V activities. At the end of one year, the Project Sponsor submits the Operating Report and receives the remainder of the incentive based on the measured savings, when the Utility Administrator approves the Operating Report. Outreach, Marketing and Advertising Extensive pro-active outreach was conducted in the early years of the program (1998 and 1999) to ESCOs, contractors and other energy efficiency service providers. Since then, there has been more limited pro-active marketing as market demand has exceeded available incentives very early in each program year. Significant referrals are generated from utility and third-party Education and Training Program efforts (e.g., audits, training seminars, energy centers, etc.). Each utility maintains comprehensive program websites to explain the program and provide detailed guidance on program participation. Installation and Delivery See discussion above under Participation Process for program features associated with project installation. Program incentives strategies used to stimulate project adoption include the following features. Incentive levels set by end use for electric savings ($0.05/kWh saved for Lighting, $0.14/kWh saved for AC & Refrigeration, $0.08/kWh saved for Other qualifying measures). Therm savings were paid at $0.45/therm saved. Comprehensive projects are required (i.e., lighting replacements are only allowed if they represent a maximum of 20 percent of the savings of a comprehensive application). The maximum share of each utility s incentive budget for all types of lighting (including controls) is 30 percent. There is a10 percent incentive adder for the Measured Savings path. Program Evaluation The CA SPC program has undergone extensive evaluation for every year of its program history dating back to The 1998 and 1999 evaluations focused on evaluating hypothesized market effects associated with the market transformation goals of those program years. A comprehensive, theory-based evaluation approach was used. Detailed market baseline surveys were conducted. The 2000 and 2001 evaluations focused more on process evaluation issues and updating program tracking and performance data. In 2002, a site-specific impact evaluation component was added and the market baseline survey was updated. All program years included estimation of free riders and net-to-gross ratios. A multi-year analysis was conducted that looked at the potential bias in the early years net-to-gross ratios associated with the self-report, free-ridership method and the addition of participant spillover effects. Quantitative Data NR54-6
7 Program Year: 1/1/2002 to 12/31/2002 Participation rate is available Cost Breakdown is available Net Savings Breakdown is available Net-to-Gross is available Total Resource Cost Data is available Quantative Data Summary: Detailed quantitative data is available for all aspects of the program, including measure level impacts, program budgets, net-to-gross ratios, and benefit cost ratios. List Of Key Sources Quantum Statewide Nonresidential Standard Performance Contract Program Measurement and Evaluation Study: Process Evaluation and Market Assessment Report, prepared by Quantum Consulting, Inc. for Southern California Edison Company on behalf of PG&E, SDG&E, CPUC. March. XENERGY. 2001a and 2001 Nonresidential Large SPC Evaluation Study, prepared by XENERGY, Inc. for Southern California Edison Company on behalf of PG&E and SDG&E, December. XENERGY Nonresidential SPC M&V Case Study, prepared by XENERGY, Inc. for Southern California Edison Company on behalf of PG&E and SDG&E. April. XENERGY. 2001b Nonresidential Large SPC Evaluation Study, Volume I Final Report, prepared by XENERGY, Inc. for Southern California Edison Company on behalf of PG&E and SDG&E., January. XENERGY Evaluation of the 1998 Nonresidential Standard Performance Contract Program, Volume I Final Report, prepared by XENERGY, Inc. for Southern California Edison Company on behalf of PG&E and SDG&E. June. SPC SPC Procedures Manual, Pacific Gas & Electric Company, Southern California Electric Company, and San Diego Gas & Electric Company. NR54-7
8 Contact Information Name Title Company Phone Grant Hjelsand SPC Program Manager Southern California Edison Company (626) Ext. NR54-8
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