Welland Hydro Whole Home Pilot Program

Transcription

1 Pilot Program Proposal Welland Hydro Whole Home Pilot Program April 29, 2016 Submitted to: Evelyn Lundhild Independent Electricity System Operator Adelaide Street West Toronto, ON M5H 1T1 Submitted by: Welland Hydro Electric System Corp. 950 E Main St Welland, ON L3B 5P6 ICF International 277 Wellington St. West, Suite 808 Toronto, Ontario M5V 3E4 Tel: canada@icfi.com pg. i

2 Table of Contents Executive Summary Program Proposal Current State of the Residential Sector in Ontario Current and Past CDM Initiatives Program Description Program Participation Process Market Approach Barriers Addressed by the Proposed Program Analysis of Program Energy Savings Program Pilot Pilot Partner: Enbridge Gas Distribution Pilot Operations Objectives of the Pilot Project Pilot Participant Criteria Participant Identification and Engagement Strategy Pilot Incentives Customer Experience Pilot Risk Analysis and Risk Mitigation Plan Pilot Implementation Plan Pilot Budget Pilot Financial Impact and Cost-Effectiveness Program Operations Plan EM&V Strategy Appendix A Demonstration of Program Collaboration... A-1 Appendix B M&V Approach... B-2 Appendix C Cost-Effectiveness Testing... C-2 Appendix D Customer Engagement Platform Details... D-1 Customer Portal... D-1 Administrator Portal... D icfi.ca

3 Executive Summary Welland Hydro Electric System Corp. (Welland Hydro), with the assistance of ICF International (ICF) and PlanetEcosystems proposes to pilot an 18-month holistic residential CDM program. Funding from the Independent Electricity System Operator (IESO) LDC Program Innovation Stream will allow Welland Hydro s residential customers to achieve significant energy and cost savings, by becoming much more engaged in their energy use and opportunities for savings. The proposed pilot program will provide a comprehensive CDM program focused on electricity, natural gas, and water savings for the residential sector in Welland Hydro s service territory. The program will make use of prescriptive measures as well as natural gas and water measures available to the sector. 1 To ensure that more holistic retrofits are available to residential customers, the program will be enhanced by additional custom measures with significant electricity savings not currently available through any existing energy efficiency programs such as envelope measures. The Welland Whole Home pilot program will engage customers in a continuous improvement journey with ongoing communication and engagement through a web-based Customer Engagement Platform that will provide information about household energy performance and opportunities for improvement. The Customer Engagement Platform will provide customers with a seamless one-stop-shop focused on helping reduce their homes overall resource needs (i.e. electricity, natural gas, and water). The main focus of the Whole Home pilot program is to test a more holistic approach to energy efficiency in the residential sector that will keep utility costs per project to a minimum and increase cost effectiveness through the following: Home energy assessment to educate customers on household usage and opportunities for efficiency improvements; One-stop-shop approach with a broad selection of prescriptive and custom measures provided on a convenient online platform; Opportunity for deeper and more persistent savings with continual customer engagement through the online platform; Broader range of measures and incentives not available through any other program offerings (e.g. appliances, thermal envelope, etc.); and Highly flexible delivery model allowing for the addition of new measures and further integration with gas and water utilities. As a result of the abovementioned benefits, as well as the strong cost effectiveness outlined in the table below, it is recommended that the Welland Whole Home Pilot proceed. The table below delineates the forecasted savings and cost effectiveness for both the pilot term, and as a program through to Incentives for existing measures will only be provided by the program in cases where incentives have not already been obtained under the Coupons program. Invoices will be used to verify that measures are not incentivized twice icfi.ca

4 2016 Pilot Year (18 Month Term) Total ( ) Program Budget $293,094 $913,258 Persistent Savings Peak Demand 0.1 MW 0.48 Energy 648 MWh 3,416 MWh Cost Effectiveness Total Resources Cost (TRC) Program Administrator Cost (PAC) Levelized Unit Energy Cost (LUEC) $0.04 $0.03 Program Participants 934 households (1.5% market penetration) 2,803 estimated households by the end of 2020 (4.6% market penetration) 1 Program Proposal Our homes are the often one of our largest investments. However, homeowners are inundated with competing priorities, and improving the energy efficiency of their homes is usually low on their to-do lists. The current incentives that are available to residential customers are based on coupons for lighting and other equipment with marginal savings compared to a home s overall energy consumption. As such, there is a general consensus that the savings potential in the residential sector is quite significant. Also, as customers are becoming more knowledgeable about energy conservation opportunities and are more accustomed to personalized mobile engagement from their service providers, they are beginning to expect their engagement with their LDC and gas utility to evolve. To address these issues, Welland Hydro wishes to pilot an innovative residential program that focuses on the implementation of more holistic retrofits to homes and acts as a one-stop shop for conservation. The program concept is inspired by the former federal and Ontario ecoenergy for Homes program. In this whole house program concept, Welland Hydro customers will have the opportunity to obtain incentives for measures that result in savings from electricity, water and natural gas. Under a simple-to-use prescriptive approach, customers will be able to access incentives for individual projects as they re completed (i.e. they can apply an unlimited number of times). However, to ensure project and program cost effectiveness, participants with electrically heated homes qualifying for weatherization upgrades will be required to cover the cost of energy audits upfront, and incentives covering these costs will only be provided to participants that implement at least two envelope-related measures icfi.ca

5 The Welland Hydro Whole Home pilot provides a testing ground for the residential program of the future: holistic measure offerings for both electricity and natural gas savings with a sophisticated Customer Engagement Platform. A province-wide roll-out of this program would drive significant and measureable savings for LDCs across the province. The following targeted services will be offered through this pilot program to residential customers in Welland Hydro s service area: The proposed pilot program will provide a comprehensive CDM solution focused on electricity, natural gas, and water savings for the residential sector in Welland Hydro s service territory. The program will provide incentives for both prescriptive and custom electricity measures 2, and connect customers with available gas and water saving measures. It is important to note that, from the customer s perspective, the program will be a seamless offering rather than separate programs from their gas, water, and electric utilities. The online Customer Engagement Platform is intended to provide customers with information and access to all household savings opportunities and programs regardless of the funding source. The following benefits will accrue to participating residential customers: Customer Engagement Platform: An online Customer Engagement Platform will be used to scope potential opportunities and connect with program participants on an on-going basis. When coupled with appropriate marketing, this platform will enable one-on-one customized customer marketing of residential programs and all available residential customer incentives with low administration costs. The platform will also boost customer satisfaction and program participation. Energy audits: Energy audits will be required for program participants who are considering implementing insulation measures and other envelope upgrades. Energy audits will also be an important component of the M&V approach for the pilot. Customers will be required to cover the cost of energy audits up front. However, they will be reimbursed for these costs if they choose to implement at least two envelope-related measures. This approach is similar to the one currently being used by Enbridge for their Home Energy Conservation Program. The pilot program will also leverage the pool of pre-qualified auditors being used for Enbridge s program and look for opportunities to share costs with Enbridge where possible. Incentives for a broad list of measures: In addition to the incentives currently being offered through the saveonenergy coupon program, the pilot program will offer incentives for a broad list of measures. This includes measures with electricity savings, water savings, gas savings, and electricity and gas savings (e.g. envelope measures for gas heated homes with central AC). Technical and Administrative Support: This will provide access to technical expertise to assist residential customers with questions related to the program and the energy efficiency measures that they should consider implementing in their homes. The benefits to LDCs and the IESO include: Increased and persistent electricity and natural gas savings from the residential sector Integration of electricity and natural gas programming into a seamless fit for residential customers An expansion of IESO s prescriptive measure offerings for residential customers 2 Incentives for existing measures will only be provided by the program in cases where incentives have not already been obtained under the Coupons program. Invoices will be used to verify that measures are not incentivized twice icfi.ca

6 Integrating a Customer Engagement Platform, creating an easier and more dynamic way to engage with customers on an ongoing basis and encourage continual improvement in energy efficiency in the home The following section describes the current state of the residential sector in Ontario, and why there is a need for the proposed program. 1.1 Current State of the Residential Sector in Ontario There are almost 4.9 million private households in Ontario. 3 Single detached dwellings make up a large portion (56%) of Ontario s households, followed by semi-detached/row houses/low rise apartments (28%), and apartments with five or more stories (16%). This section describes the electricity consumption of different types of dwellings in Ontario, provides a comparison by IESO geographic zone, as well as the total residential electricity consumption by end use. This data is from the Achievable Potential: Estimated Range of Electricity Savings from Energy Efficiency and Energy Management report prepared by ICF (2014) Market Size and Segmentation The residential sector, including multi-family dwellings, consumed 47.3 TWh/yr in 2012, which was 34% of the electricity consumed in Ontario. Single family dwellings account for over 60% of the residential total. Low- and high-rise multi-family dwellings account for 22% of the total, and are most prevalent in Toronto, Niagara, and Ottawa. Row houses account for 17% of the total. This is illustrated in Exhibit 1. Exhibit 1 Total Residential Electricity Use, by Dwelling Type, 2012 Total Sub Sector Consumption, 2012 (TWh/yr.) SINGLE_FAMILY 28.9 ROW_HOUSE 8.1 MULTI_RES_HIGH_RISE 6.8 MULTI_RES_LOW_RISE 3.4 OTHER_RESIDENTIAL_BUILDINGS 0.1 Grand Total Statistics Canada, 2011 Census of Population and Statistics Canada catalogue no XCB icfi.ca

7 The Independent Electricity System Operator (IESO) divides the province of Ontario into ten zones, as follows: Bruce, East, Essa, Niagara, Northeast, Northwest, Ottawa, Southwest, Toronto, and West. Welland Hydro is considered part of the Niagara zone. Electricity consumption analysis was conducted on each dwelling type in each of the IESO zones and is presented in Exhibit 2. The Toronto zone has the highest residential electricity consumption in Ontario, followed by the Southwest zone. In Toronto and Niagara, the multi-family consumption is mostly in high rises. In Ottawa it is approximately evenly split between consumption in highrise multi-family and consumption in low-rise multi-family. Northeast and Northwest are the IESO zones where consumption in row houses accounts for the largest percentage of the total residential consumption. Exhibit 2 Total Residential Electricity Use, by IESO Zone and Dwelling Type, 2012 The end uses that consume the most residential electricity in Ontario are lighting, non-ducted space heating (primarily baseboard electric), and ventilation and circulation. This is illustrated in Exhibit icfi.ca

8 Exhibit 3 Total Residential Electricity Use, by End Use, Target Customer Characteristics As described in the previous section, the residential sector is extremely diverse in Ontario, with a wide range of income levels, types of households, equipment, age, etc. Given the expansiveness and diversity of the residential sector and gaps in the existing programs available, there is a critical need to provide additional offerings. Welland Hydro s Whole Home pilot will both test out a holistic program design, as well as provide residential customers with another offering to help manage household energy use. This pilot program will be open to all residential customers, although it is streamlined for customers who are computer literate, and are comfortable with self-serve web portals. It is also helpful if the customer has a basic understanding of their utility bills and energy saving opportunities. However, assistance and technical support will be provided to all customers who request it. As a whole, residential electricity consumers in Ontario are becoming more knowledgeable about energy conservation and energy efficiency opportunities. LDCs, along with the saveonenergy programs, have been providing education and incentives for a number of years, codes and standards are continually improving, and labeling such as Energuide and ENERGY STAR are becoming well recognized and understood. In addition, with the installation of smart meters, more than 4.4 million electricity consumers in Ontario are billed on a time-of-use basis, are able to view and analyze their daily and hourly consumption, and are more able to make informed decisions about their energy use. Most individuals now use the internet as part of many personal and work-related activities. Many electrical customers in Ontario have already switched to paperless billing and manage their utility accounts using online portals. According to Statistics Canada s Canadian Internet Use Survey, in 2012, Ontario s household internet access was over 84%. Ontarians use the internet icfi.ca

9 in a variety of locations, and they are increasingly using internet on their mobile devices. As shown in Exhibit 4, 51.4% of Ontarians over the age of 16 used their wireless handheld devices to access the internet in 2012, which is up from 27.3% in The trend has likely continued over recent years as smart phones have become more popular. As a result of these findings, Welland Hydro determined that the most effective program delivery method would be to use an online Customer Engagement Platform. Welland Hydro s particular Customer Engagement Platform, P-ECOSYS, is ideal for this type of whole home initiative for several reasons. It has been proven to be effective at motivating consumers to take action with similar types of whole home initiatives in other jurisdictions (Energy Upgrade California see page 25). In addition, it is a modular and expandable platform which allows it to adapt as the initiative evolves. Please refer to Appendix D for specifics related to the P-ECOSYS Customer Engagement Platform. Exhibit 4 Ontario Internet Use, by Location of Use 4 % Ontarions (over age 16) Access Internet From Each Location Home Work School Public library Wireless handheld device Other location While the aforementioned statistics show that with each year an increasing number of Ontarians are using the internet and mobile devices for managing personal activities, Welland Hydro will offer alternative methods to accommodate all residential consumers and encourage participation should the online method not be their preferred method for engagement. These alternative methods will include face-to-face assisted sessions with one of our trained CDM Specialists, as well as offering a paper based submission option Market Opportunity According to the IESO s lower achievable estimates contained in the Achievable Potential: Estimated Range of Electricity Savings from Energy Efficiency and Energy Management report prepared by ICF (2014), the residential sector represents an estimated 2,728 GWh of potential savings in 2017 (not including savings from codes and standards). 5 This lower achievable estimate amounts to almost 39% of the Provincial target of 7 TWh, emphasizing the tremendous savings potential available in the residential sector and the need for the type of 4 Statistics Canada. Table Canadian Internet Use Survey, Internet use, by location of use, household income and age group for Canada and regions, occasional (percent) 5 Achievable Potential: Estimated Range of Electricity Savings from Energy Efficiency and Energy Management (2014), ICF. C&S savings have been excluded icfi.ca

10 whole home initiative proposed by Welland Hydro to capture this potential. Further emphasizing the need, and marketplace appetite, for a whole home initiative were the results from a recent IESO Customer Focus Group. Completed on February 3, 2016 and February 4, 2016 by Northstar Research Partners, a series of four (4) focus groups were conducted introducing the concept of a whole home conservation initiatives to gauge customer response. The key findings of this research indicated the following: A whole home program concept was well received by owners of both gas and electrically heated homes, Homeowners want a one-stop shop for accessing program information and applicable incentives, Customized information specific to their home is extremely important and likely to make them take action, Application process needs to be simple, and Customers wanted choice and flexibility regarding several decisions throughout the process; choosing their own contractor (not ones prescribed by a program), purchasing eligible products through their retailer/vendor of choice, ability to prioritize and complete upgrades based on various factors (i.e. ROI) and not have to package several measures together in order to qualify for incentives. IESO provincial achievable potential by end use for residential dwellings is shown in Exhibit 5 and Exhibit 6, respectively. Exhibit 5 Upper Achievable Potential by Dwelling Type, icfi.ca

11 Exhibit 6 Upper Achievable Potential by End Use, icfi.ca

12 1.2 Current State of Welland Hydro s Residential Sector Market Size and Segmentation According to the LDC Service Territory Residential Profile for Welland Hydro, which is based on survey data collected in 2009 (the report was issued in January 2011), there were 25,216 households in Welland Hydro s service territory and the total population of about 61,000. The residential sector makes up approximately 41% of Welland Hydro s total customer base. Welland Hydro s market size represents approximately 0.5% of the rest of the province. This section provides segmentation of Welland Hydro s residential market, based on this survey data. Exhibit 7 illustrates the breakdown of the types of residential dwellings in Welland Hydro s service territory. Single family detached houses make up over two thirds of residences in the area, followed by low rise apartments (11.7%). The prevalence of single detached or semidetached homes is significantly higher in Welland Hydro s service territory compared to the provincial average (74.4% versus 61.7%). This is largely due to the low prevalence of mid- or high-rise apartment in Welland (5.6%) as compared with the province as a whole (15.9%). Low rise apartments are those with fewer than five storeys, whereas mid to high rise apartments are all apartment buildings with five or more storeys. Exhibit 7 Type of Dwellings in Welland Hydro s Service Territory, 2009 Exhibit 8 presents the breakdown of dwelling ages, based on the date of construction. More than half of the dwellings in Welland Hydro s service territory were built before 1970 (and are over 45 years old). A comparison with provincial statistics suggests that the average home in Welland is substantially older than the provincial average icfi.ca

13 Exhibit 8 Age of Dwellings in Welland Hydro s Service Territory, 2009 The following exhibit illustrates that the heating characteristics of dwellings in Welland Hydro s service territory closely resemble the heating characteristics of dwellings across the province. A majority of dwellings use natural gas for water heating and to heat their homes. This reinforces the value of a residential pilot program that involves a collaboration of both the LDC and the local natural gas provider. Exhibit 9 Heating Characteristics of Dwellings in Welland Hydro s Service Territory vs. Ontario, icfi.ca

14 Exhibit 10 illustrates that dwellings in Welland Hydro s service territory have a similar profile of energy-using appliances compared to the rest of the province. More than 50% of homes have central air conditioners, but less than 40% of dwellings have automatic thermostats. This signals an opportunity for improved penetration of energy efficient thermostat technology in Welland. Exhibit 10 Energy-Using Appliances in Welland Hydro s Service Territory vs. Ontario, Target Customer Characteristics As was mentioned in section 1.1.2, this program is open to all residential customers, although it is streamlined for customers who are computer literate, and are comfortable with self-serve web portals. It is also helpful if the customer has a basic understanding of their utility bills and energy saving opportunities. However, assistance and technical support will be provided to all customers who request it. Welland Hydro customers have provided feedback through daily interactions with Welland Hydro staff (i.e. walk-ins, telephone calls, and s) and have indicated a need for a more comprehensive program for residential upgrades. Customers have also indicated that the current suite of initiatives are limited in terms of the measures covered. According to the LDC Service Territory Residential Profile for Welland Hydro, which is based on survey data collected in 2009, over 80% of respondents in Welland Hydro s service territory use the internet. This closely resembles the online usage across the rest of the province. In Welland Hydro s service territory, approximately 29% are heaving online users (more than 4 hours per week), 26% are medium users (2-4 hours per week), and 27% are light online users (less than 2 hours per week). This suggests that an online Customer Engagement Platform is well-suited to Welland Hydro s customers icfi.ca

15 Exhibit 11 Internet Use in Welland Hydro s Service Territory vs. Ontario, 2009 Home ownership in Welland Hydro s service territory (75%) is slightly higher than the rest of the province (72%), as shown in Exhibit 12. It is well known that homeowners are more willing to invest in energy saving retrofit projects in their homes, compared to renters. As such, a residential pilot program is well suited to Welland Hydro s service territory. Exhibit 12 Home Ownership in Welland Hydro s Service Territory vs. Ontario, icfi.ca

16 1.3 Current and Past CDM Initiatives Welland Hydro s proposed Whole Home program is different and complementary to numerous past and current residential CDM initiatives, which are described below: NRCan s ecoenergy for Homes The Whole Home program concept is inspired by the former federal and Ontario ecoenergy for Homes program, which provided grants up to $5,000 to help homeowners make their homes more energy efficient. Participants were required to obtain pre- and post-retrofit evaluations by a certified energy advisor. The program ran from April 2007 to March The Green Button Initiative Green Button is a North America-wide initiative, supported by the Government of Ontario. It provides Ontario electricity consumers with secure access to their energy usage information, and allows utilities to create value-added apps for their consumers (see greenbuttondata.ca). Hydro One and London Hydro are currently conducting a pilot that gives homes the opportunity to share their electricity data with selected solution providers. Mortgage Insurance Premium Rebate Programs CMHC (Canadian Mortgage and Housing Corporation) and other mortgage insurance companies in Canada are offering a 10% refund on the mortgage insurance premium for applicants using insured financing to buy an energy efficient home, purchase a house and make energy saving renovations, or renovate their existing home to make it more energy efficient. The City of Toronto's Home Energy Loan Program (HELP) HELP provides low-interest loans for home energy efficiency improvements to homeowners across Toronto. Qualifying homeowners can apply for funding from the City and the loan is then repaid via monthly installments on the homeowner's property tax bill. Toronto Hydro s PowerShift - For customers who are already enrolled in peaksaverplus, PowerShift takes one step further by cycling eligible appliances into conservation mode when the temperature reaches 27 C and/or the humidex rises to 30 C on weekday afternoons. This could be included in the Whole Home program if the program was expanded to Toronto Hydro s customers. Enersource Pilot The details of this program are unknown to Welland Hydro at this time but, from what we understand, this is similar to the existing home assistance program, but for nonlow income customers. This pilot is different from the Welland Whole Home pilot, because it does not provide one-stop-shop access to electricity, gas, and water program incentives icfi.ca

17 Incentive programs are offered by utilities, largely in isolation, with LDCs, gas utilities, and municipalities each trying to target the same customers. The program offerings from each service provider are described below: Exhibit 13 Residential Programs - Ontario Utility Program(s) Overview of Measures IESO, through LDCs Heating and Cooling Incentive $250 incentive for ENERGY STAR central AC; $400 incentive for stand-alone CEE Tier 2 central AC; $250 for HE furnace with ECM Enbridge saveonenergy Coupons peaksaverplus Home Assistance Program Home Energy Conservation Program Home Winterproofing Program Home Rating program Coupons for certain lighting products, programmable thermostats, closelines, powerbars, timers, weatherstripping, hot water pipe wrap, and electric water heater blankets Free in home energy display and device that makes slight adjustments to reduce appliances electricity demand Free EE upgrades for low-income customers (No longer accepting applicants for the remainder of 2015) Free EE upgrades for low-income customers Home sellers displaying their energy score on the MLS listing may receive a Lowe s gift card and an Energy Savings Kit Union Gas Home Reno Rebate Up to $2500 rebate for EE upgrades Programmable Thermostat Home Weatherization Program $25 rebate Up to 30% cost savings for low-income customers Water conservation incentive programs vary, depending on the municipality s water supply, and their building standards. Most programs provide incentives for low flow fixtures. For example, the Welland Conservation Program provides several water conservation initiatives including toilet and washing machine replacement programs and subsidized rain barrels. In addition to the programs listed in Exhibit 7, utilities also offer energy and water saving tips and videos on their websites. There are a few programs in other jurisdictions that resemble this proposed program and also use the PlanetEcosystem Customer Engagement Platform: icfi.ca

18 MCE Clean Energy This program provides outreach services to 220,000 customers including Home Utility Reports, web portal, audit tools, energy tips, marketplaces for appliances / contractors / financing, schools and other engagement programs. Energy Upgrade California Energy Upgrade California (EUC) is a state initiative to help Californians take action to save energy and conserve natural resources, help reduce demand on the electricity grid, and make informed energy management choices at home and at work. EUC provides outreach services web portal, audit tools, energy tips, marketplaces for appliances / contractors / financing, social / Cool California competition, and other engagement tools. Covers 29 electric, 8 gas, and 65 water providers for 12,500,000 customers. It is supported by an alliance of the California Public Utilities Commission, the California Energy Commission, all California IOUs and other utilities (note there is usage data integration with these entities), regional energy networks, local governments, businesses, and non-profits to help communities meet state and local energy and climate action goals. Funding comes from investor-owned utility customers under the auspices of the California Public Utilities Commission. The website and other facilities reflect, and largely simulate, a customer s experience as if operating directly with their utility. All California utility customers are served by this PlanetEcosystems P-ECOSYS website (again, branded Energy Upgrade California ). 1.4 Program Description The current incentives that are available to residential customers are based on coupons for lighting and other equipment with marginal savings compared to a home s overall energy consumption. Incentives and education related to a broader scope of energy efficiency measures are important in motivating homeowners to invest in energy efficiency upgrades that can add value to their homes, reduce their overall energy costs, and improve their level of comfort. The Whole Home Pilot will focus on the implementation of more holistic retrofits to homes and acts as a one-stop shop for conservation. The program concept is inspired by the former federal and Ontario ecoenergy for Homes program. In this whole house program concept, Welland Hydro customers will have the opportunity to obtain incentives for measures that result in savings from electricity, water and natural gas. Under a simple-to-use prescriptive approach, customers will be able to access incentives for individual projects as they re completed (i.e. they can apply an unlimited number of times). However, it should be noted that participants will be required to cover the cost of energy audits up front and that incentives covering these costs will only be provided to participants that implement at least two envelope-related measures. The Welland Whole Home program will engage customers in a continuous improvement journey, through ongoing communication through the web portal and opportunities to leverage incentives as the journey progresses to increasing energy savings and customer satisfaction. Since the potential savings on a per-household basis are much smaller than those from commercial facilities, it is important to minimize the effort and support that an LDC needs to provide to each customer. The main focus of the Whole Home pilot program is to test a more holistic approach to energy efficiency in the residential sector, along with an approach that will keep utility costs per project to a minimum. A province-wide roll-out of this program would drive significant and measureable savings for LDCs across the province. The following targeted services will be offered through this pilot program to residential customers in Welland Hydro s service area: Customer Engagement Platform: An online Customer Engagement Platform will be used to scope potential opportunities and connect with program participants on an on-going basis icfi.ca

19 When coupled with appropriate marketing, this platform will enable mass-marketing of residential programs with low administration costs. The platform will also boost customer satisfaction and energy efficiency (EE) program participation. Energy audits: Energy audits will be required for program participants who are considering implementing insulation measures and other envelope upgrades. Energy audits will also be an important component of the M&V approach for the pilot. As noted above, customers will be required to cover the cost of energy audits up front. However, they will be reimbursed for these costs if they choose to implement at least two envelope-related measures. This approach is similar to the one currently being used by Enbridge for their Home Energy Conservation Program. The pilot program will also leverage the pool of pre-qualified auditors being used for Enbridge s program and look for opportunities to share costs with Enbridge. Incentives for a broad list of measures: In addition to the incentives currently being offered through the residential coupon program, the pilot program will offer incentives for a broad list of measures. This includes measures with electricity savings, gas savings, and electricity and gas savings (e.g. envelope measures for gas heated homes with central AC). Technical and Administrative Support: This will provide access to technical expertise to assist residential customers with questions related to the program and the energy efficiency measures that they should consider implementing in their homes. It is important to note that, from the customer s perspective, the program will be a seamless offering rather than separate programs from their gas, water, and electric utilities Custom Whole Home Program Measures The only incentives that are currently available to residential customers in Ontario are the incentives being offered through the saveonenergy coupon programs. The aim of the pilot is to substantially expand the list of measures that are available to residential customers, offering them incentives for energy efficiency upgrades with more significant savings but also more significant costs. This includes envelope measures, such as insulation and window upgrades, where cost is often the primary barrier to implementation. However, to ensure that the incentives being offered to residential customers are more significant and not limited to electrically heated homes, Welland Hydro plans to partner with Enbridge to offer incentives for measures with both gas and electricity savings, with administrative costs to be shared or matched. The custom measures are summarized in Exhibit 8, including the energy savings estimates for each measure, and a description of the assumptions made to arrive at the savings estimates icfi.ca

20 Category Measure Description Refrigerators, ENERGY STAR MOST EFFICIENT Medium Refrigerators, ENERGY STAR MOST EFFICIENT Large Refrigerators, ENERGY STAR MOST EFFICIENT - Extra-Large Exhibit 14 List of Custom Whole Home Program Measures Heating Fuel First Year Energy Savings kwh kwh kwh Sources Based on averages of rated consumption and applicable federal standard for qualified refrigerators in size range available in Canada, as of Nov. 19, 2014 Based on averages of rated consumption and applicable federal standard for qualified refrigerators in size range available in Canada, as of Nov. 19, 2014 Based on averages of rated consumption and applicable federal standard for qualified refrigerators in size range available in Canada, as of Nov. 19, 2014 Used ENERGY STAR Savings Calculator with the following assumptions: Appliances --> Capacity: Capacity of 4.23 ft3 (120 L) based on average capacity of qualified units in Canada --> Loads: Assuming 6 loads/wk (312/yr), as per default input in tool (i.e. less than 7.5 typically assumed) Clothes Washers, ENERGY STAR MOST EFFICIENT Large Elec. 305 kwh --> Base case: MEF= 1.84 ft3/kwh/cycle ( L/kWh/cycle) and WF=4.70 gallons water/ft3 capacity/cycle (0.628 L water/l capacity/cycle) based on pending updates to US Federal minimum performance standards for front-loading standard (>=1.6 ft3) clothes washers (i.e. effective March 7, 2015). Assuming that Canada will follow suit shortly and that available washers will be shaped by US regulations. Rated annual energy consumption of 903 kwh based on assumed capacity and MEF (i.e. kwh = Capacity (L) x 392 cycles / MEF). Based on default calculations, assuming non-dryer energy use represents about 40% of total. --> Efficient case: MEF=3.20 ft3/kwh/cycle (90.61 L/kWh/cycle) and WF=3.00 gallons water/ft3 capacity/cycle (0.401 L water/l capacity/cycle) based on ENERGY STAR Most Efficient 2014 criteria for > 2.5 ft icfi.ca

21 Category Measure Description Clothes Washers, ENERGY STAR MOST EFFICIENT Large Heating Fuel Gas First Year Energy Savings 0.78 MMBtu Furnace/AC Filter - 34 kwh IESO Assumptions Furnace with ECM Elec. 762 kwh IESO Assumptions Sources washers. Rated annual energy consumption of 519 kwh based on assumed capacity and MEF (i.e. kwh = Capacity (L) x 392 cycles / MEF). Based on default calculations, assuming non-dryer energy use represents about 25% of total. HVAC Envelope Smart Thermostats (Gas Central Heating and CAC) Gas 206 kwh Air Sealing Elec kwh Air Sealing Gas 9.8 MMBtu Attic Insulation Elec kwh Attic Insulation Gas 3.8 MMBtu Basement Insulation Elec kwh Based on ICF report and analysis completed for CEATI (Inventory and Energy Savings Estimates for Residential Self-Programmable Thermostats, July 31, 2014). --> Weighted average heating, ventilation, and space cooling savings for Southern Ontario. --> Cost of Nest learning thermostat and comparable models (e.g. Honeywell Lyric and Ecobee3). Also assuming that thermostats are installed by homeowners 2/3 of the time (i.e. $100 installation cost) Based on weighted average results of ICF HOT2000 modeling for OPA Achievable Potential Applied space heat conversion factor to electric version of measure (minus electric savings included here) Based on end use-specific hours-use factors employed by ICF for OPA Achievable Potential study Based on New and Updated DSM Measures, joint submission from Enbridge and Union Gas, April 30, 2014 Based on weighted average results of ICF HOT2000 modeling for OPA Achievable Potential icfi.ca

22 Category DHW Pools and Spas Measure Description Heating Fuel First Year Energy Savings Basement Insulation Gas 9.3 MMBtu Sources Based on New and Updated DSM Measures, joint submission from Enbridge and union Gas, April 30, 2014 Wall Insulation Gas 9.1 MMBtu Applied space heat conversion factor to electric version of measure Window Solar Film Elec kwh Average savings of 4 OPA categories assumed Window Solar Film Gas 10.8 MMBtu Windows, ENERGY STAR double glazed Windows, ENERGY STAR double glazed Elec. Gas kwh 4.9 MMBtu Faucet Aerators Elec kwh Drain Water Heat Recovery (DWHR) Elec. 816 kwh Efficient Showerhead Elec kwh Dual Speed Pool Pumps kwh IESO Assumptions Variable Speed Pool Pumps kwh IESO Assumptions Solar Pool Heaters Elec kwh Applied space heat conversion factor to electric version of measure (minus electric savings included here) Average savings of 4 OPA categories assumed Applied space heating conversion of measure (minus electric savings included here) Measure included in OPA list under HAP. Average of kitchen and bathroom savings and costs assumed. Same values as water heater blanket measure assumed Based on New and Updated Measures, joint submission from Enbridge and Union Gas, April 30, Applied pool heater conversion factor to gas version of measure (i.e. assuming averages of 5.0 for COP of heat pump pool heaters and 75% for gas-fired pool heaters) icfi.ca

23 1.4.2 Customer Engagement Platform A unique feature of this program is the Customer Engagement Platform. The Platform is developed by PlanetEcosystems, and will involve collaboration from ICF and the participating LDCs and utilities. In addition to providing all the functionality that you would expect from a utility customer engagement platform, such as EE program support, reporting, and billing analysis, this platform stands apart from other similar platforms in the following ways: Understands and Supports Customer Motivations: the Platform provides customers with a range of tools that identify and support issues and solutions that each customer values. For example, reducing spending is widely recognized as a principal motivator of utility service customers. However, some customers are more motivated to reduce their carbon footprint or improve the comfort of their home. The Platform adapts to the unique desires of each customer based on their input of what matters most. Exhibit 15 Sample EE Opportunities for Utility s Residential Customers icfi.ca

24 Optimization of Results: As illustrated in Exhibit 9, the scope of energy efficiency improvement opportunities are so numerous, complex and interactive that even qualified professionals sometimes struggle to craft solutions that properly maximize customer outcomes. The Platform provides customers with a clear and simple path to optimizing and managing their utilities in an easy and automated experience. Consistent, Personalized and Effective, 360 Customer Messaging: Reducing customers energy and water use is a journey, one with many opportunities for action to stall. Improved rates of customer action are only achieved by better engaging with customers and providing support at all stages. As a result, the Platform incorporates functionality to support all aspects of the customer journey. This includes messaging that serves the full cycle of inspiring customer engagement, as detailed in Exhibit 10. Exhibit 16 Customer Engagement Lifecycle & Platform Functionality Enables Integrated Campaign: We recognize the next era of conservation and customer satisfaction must step beyond loosely-related initiatives, such as rebate programs, and must instead be based on an integrated campaign. To accommodate this evolution, the Platform provides all needed functionality in one integrated process, whether it is ensuring the consumer is presented with the same information and analysis in an , or from a selfserve web portal, or an advisor in the field. With this approach all consumer touch points are coordinated and consistent icfi.ca

25 1.4.3 Details Regarding Future Expansion A number of future enhancements to the pilot program have been considered including the inclusion of low income consumers, the inclusion of a rewards component, and an expansion of the features included in the Customer Engagement Platform. Using similar eligibility criteria currently required under the Home Assistance Program, Welland Hydro could simply attach incentive adders to measures where consumers are eligible. This enhancement would allow the whole home program concept to combine incentives offered to low income individuals through IESO programs, as well as through partner gas and water programs, under one initiative. A rewards component, if cost effective, could be added as part of the incentive mechanism for energy efficient projects undertaken at one s home. Being able to build up rewards over time, will likely keep people engaged and will result in continued participation further fostering the culture of conservation in Ontario. Any rewards that participants earn could be redeemable for a gift card at participating retailer locations. These retailers would be contracted to provide the rewards component, and would also be expected to offset some of these costs in return for the additional exposure/marketing benefits as a result of being part of this initiative. This approach would also have a positive impact on the overall cost-effectiveness of an expanded program. Furthermore, there are a number of additional features that PlanetEcosystems Customer Energy Platform offers, that could be included in any future expansion of the pilot. One of these features is a Service Provider Portal, which provides an integrated set of tools to support service providers, including program application and approvals, profile maintenance, reporting, scheduling, information sharing, and consumer and program administrator interaction (e.g. online reviews). The Customer Engagement Platform also has the capability to provide remote thermostat management, which could be incorporated into future pilot expansions. In addition, the opportunity to claim savings for the Home Energy Reports should be investigated in the future, as they are likely to yield behavioural savings. The ultimate vision of future expansions of this pilot would include supplanting existing residential programs (i.e. the coupon program). 1.5 Program Participation Process Key elements of the program participation process are illustrated in Exhibit 11. Participant enrollment will be driven by marketing efforts. The items in green are any activities conducted outside of the Customer Engagement Platform, and items in blue are any activities conducted inside of the Customer Engagement Platform. The program is designed to encourage continual improvement by following the personalized action plans recommended through Customer Engagement Platform s Utility System Optimizer. Exhibit 11 demonstrates two different recommended actions that might be part of the participant s customized and prioritized action plan. With some basic inputs from the customer, the platform s Utility System Optimizer will prepopulate with available data and will provide a prioritized action plan to the customer. The customer can also use the Home Assessment Wizard to input additional details about their home and energy usage, and improve the accuracy of the Optimizer s recommendations. Information from EUC indicated that 75% of all registered P-ECOSYS accounts used the Utility System Optimizer combined with the Home Assessment Wizard to provide them with a customized action plan for efficiency upgrades specific to their home. Using this customized plan, customers were more likely to follow through with the recommendations since the opportunities presented were geared towards their home based on the information they provided (rather than generic recommendations which may or may not be relevant to them) icfi.ca

26 Another key feature which makes the Customer Engagement System so effective in moving customers to take action is its messaging system. This feature is an extremely valuable tool which helps keep energy efficiency and energy saving opportunities top of mind for consumers who have created a profile through constant messaging. Welland Hydro can create fully customizable messages that can be sent out at set intervals reminding customers to take certain actions depending on what stage they are currently at in the process (i.e. following up on implementing energy saving opportunities as identified by the Home Assessment Wizard). When coupled with appropriate marketing, this platform will enable mass-marketing of residential programs with low administration costs. The platform will also boost customer satisfaction and energy efficiency (EE) program participation. In addition to the measures currently included in the residential coupon program, the pilot program will offer incentives for a broad list of measures. 6 This includes measures with electricity savings, gas savings, and electricity and gas savings (e.g. envelope measures for gas heated homes with central AC). Two of the new measures are shown in Exhibit 11 to illustrate the different rebate application processes. Within the online platform, the customer can look at the Marketplace for ideas related to eligible ENERGY STAR Most Efficient refrigerators and then purchase a suitable fridge through the retailer of their choice, either online or in-store. 7 In either scenario, the customer will be prompted to apply for the rebate through the Portal. Envelope measures, such as installing additional wall insulation, are a little bit more complicated and may require HOT2000 modeling for pre- and post-installation. Again, customers are free to select the contractor of their choice, and will be prompted to apply for the rebate through the Portal. 6 Incentives for existing measures will only be provided by the program in cases where incentives have not already been obtained under the Coupons program. Invoices will be used to verify that measures are not incentivized twice. 7 Customers will not be able to purchase equipment through the Customer Engagement Platform as part of the pilot program. However, the online platform does have this functionality built in and it will be considered for future expansions of the program icfi.ca

27 Exhibit 17 Program Participation Process Program Marketing Residential Customers Customer Engagement Platform Dashboard based on history of engagement Bill and Usage Home Assessment Wizard Utility System Optimizer Recommended Actions Replace your fridge with an energy efficient model Install new wall insula t ion Marketplaces Purchase Online Rebate Applications Purchase In Store Select Contractor Hot2000 pre-model Installation by Contractor Hot2000 post-model Rebate Applications Application Approved? Yes No Application Approved? Welland Hydro Sends Cheque To Customer Welland Hydro Sends Explanation To Customer Yes No Welland Hydro Sends Cheque To Customer Welland Hydro Sends Explanation To Customer icfi.ca

28 1.6 Market Approach Welland Hydro will spearhead the development and implementation of the marketing and communication plan, which will be tested during the pilot. The plan will be revisited before the province-wide scale up, taking into account the valuable lessons learned from the pilot. The plan will be designed to identify and recruit program participants. Marketing activities may include but not be limited to: Newspaper advertisements Bill inserts Social media announcements (Twitter, Facebook, etc.) Commercials at local movie theatres (shown before the movie starts) Youtube video to show how to use the Customer Engagement Portal or answer FAQs Booth at popular local events Community Challenge: A prize to the neighborhood that has the most households registered in the Customer Engagement Portal Street teams : Students representing the program go door-to-door to explain the benefits of the program and of investing in energy efficiency improvements around the home Collaborate with CMHC: Collaborating with the Canadian Mortgage and Housing Corporation (CMHC) to provide information on the program to potential participants Collaboration with Gas Utilities and IESO To increase both awareness of and participation in DSM programs, a collaborative approach with Enbridge is being proposed for the pilot. It is also being proposed that the program will involve collaboration with municipalities to offer incentives for measures with water savings, as many electricity and gas measures result in water savings as well. Such a collaboration may involve joint identification of opportunities, particularly through the Customer Engagement Platform, marketing campaigns and promotional materials and technical support services such as auditors and energy managers. Welland Hydro has reached out to Enbridge for collaboration on the delivery of the proposed pilot program in Welland Hydro s service territory (see Appendix A). Although the program wants to present a one-stop-shop approach to residential energy efficiency for its participants, unfortunately at this time Enbridge has, after many conversations and meetings, declined our attempts to develop a collaborative approach for offering this pilot in our service territory. That being said, Welland Hydro would welcome Enbridge s participation in our whole home pilot at any time in the future. If at some point Enbridge does decide to collaborate with us on this offering, there are several details that would be discussed and finalized with Enbridge at that time. These include but are not limited to the following: General collaboration guidelines Enbridge access to Customer Engagement Platform Data transfer process Approach regarding technical support Broadening the scope of energy audits to include electricity measures Allocation of costs to cover energy audit expenses Process to review applications with gas and electricity measures Process to issue incentives icfi.ca

29 Welland Hydro is open to collaboration on program delivery beyond the pilot with other LDCs who want to try a more dynamic way of engaging their residential customers. Depending on the success of the proposed pilot program, such partnerships will be explored Program Duplication and Integration with Existing Programs To facilitate access to all applicable incentives, the program will aim to create a seamless experience for the customer. This will involve facilitating customer access to the existing suite of measures in the IESO province-wide programs, Enbridge DSM programs, as well as water utility rebates, where applicable. The customer will access these programs through the Customer Engagement Platform. From the customer s point of view, the list of eligible measures will be presented together. Since existing measures and CDM/DSM programs will be leveraged, there will be no duplication. Receipts will be reviewed to ensure that program participants haven t already received incentives for measures from retailers as a result of the Coupon program. The program is also intended to provide incentives for additional measure such as building envelope measures and DHW measures, without duplicating current IESO rebate offerings. Many of the intended prescriptive offerings of this program are not currently offered by other province-wide, regional or local distributors. Through promotion of existing programs, uptake is also expected to increase for rebate programs already in place. However, it is important to note that incentives for prescriptive measures will only be provided in cases where incentives have not already been obtained under the Coupons program. Invoices will be used to verify that measures are not incentivized twice. The program will include appropriate M&V to verify savings for select measures where the savings is more uncertain. The M&V process will be tested during the pilot. This will contribute to future EM&V requirements of the IESO, OEB, or both regarding savings attribution. For details on the proposed M&V, please see Appendix D icfi.ca

30 1.7 Barriers Addressed by the Proposed Program Several barriers to CDM program participation have been identified after delivering saveonenergy program offerings in Welland Hydro s service territory over the last few years. A number of these barriers are likely to persist across Ontario. A summary is presented in Exhibit 12. Barrier Exhibit 18 Barriers Addressed by Proposed Program Program Initiative Lack of awareness of potentially substantial energy cost savings saveonenergy Coupons require customers to purchase from a limited list of participating retailers Heating and Cooling Incentive program requires customers to purchase from a limited list of participating contractors Many customers are not aware that saveonenergy coupons are available online outside of coupon events Existing residential program offerings provide marginal savings compared to a home s overall energy consumption Customers are confused by the various program offerings from multiple sources The Customer Engagement Portal clearly indicates personalized savings opportunities The Whole Home program allows customers to purchase approved/recommended equipment from a retailer of their choice The Whole Home program allows customers to purchase approved/recommended equipment from a contractor of their choice Online customer engagement platform will allow customers to see which incentives are available to them at any given time A more exhaustive list of measures is included in the Whole Home program Gas, water, and electricity program offerings will be included in the Portal (including relevant rebate application forms), and customers will receive customized recommendations icfi.ca

31 1.8 Analysis of Program Energy Savings Ontario Data from Achievable Potential: Estimated Range of Electricity Savings from Energy Efficiency and Energy Management report prepared by ICF (2014) is provided in Exhibit 13. Based on the 2017 upper achievable potential, an average of 590 kwh per household could be expected. This would represent roughly 6% of each household s electricity consumption on average. Exhibit 19 Program Energy Savings Summary (OPA 2014 Data) 2012 Consumption, residential sector (kwh) Number of Private Households Consumption per Household (kwh) 2017 Upper Achievable Potential (kwh) 2017 Upper Achievable Potential (kwh) Per Household Upper Achievable Potential, Per Household, as % Values 47,345,224, million 9,662 2,895,261, % Pilot Program The data presented in Section 1.2 was used to guide the uptake estimates for each of the pilot program measures. This includes the overall number of residential customers in Welland Hydro s service territory, the proportion of homes with central AC and pools, and the fuel share for space heating and cooling. It was estimated that 20% of Welland Hydro s residential customers would participate in the program from This translates to about 5% of customers participating in the pilot program over its 18-month timeframe. It was also necessary to estimate the saturation and penetration of technologies in order to derive the uptake estimates. For example, it was estimated that an average home can employ dimmers on four (4) of its light switches and that the initial penetration of this measure is about 30%. The participation of eligible program participants on an annual basis was also estimated in order to derive uptake estimates on an annual basis. Using the dimmer example, annual participation of 3% was estimated for this measure. In addition, for incremental cost (i.e. end of life) measures, the typical lifetime of the base case equipment was used to scale down the number of participants on an annual basis. In this way, only the equipment being replaced on an annual basis was considered as a retrofit option. Exhibit 14 provides a breakdown of the forecasted energy savings for the 18 month pilot program by end use. The end use with the most significant savings is space cooling and heating controls. Savings in lighting, thermal envelope, and water heating consumption are also quite significant. Exhibit 15 provides a breakdown of the forecasted energy savings for the 18 month pilot program by measure for the top 20 measures, which represent over 90% of the first year energy savings. The measures with the most significant first year energy savings include smart thermostats, LED bulbs, and drain water heat recovery. It should be noted that six of the top ten measures are not currently included in the Coupons program icfi.ca

32 Exhibit 20 Breakdown of First Year Energy Savings by End Use Water Heating 15% Thermal Envelope 15% Lighting 19% Miscellaneous 12% Space Cooling and Heating Controls 27% Appliances 5% Lighting Controls 4% Pools 1% Space Cooling and Heating 2% Exhibit 21 Breakdown of First Year Energy Savings (kwh) for Top 20 Measures 250,000 First Year Savings (kwh) 200, , ,000 50, icfi.ca

33 2 Program Pilot Although the proposed province-wide program has been developed at a conceptual level, additional research and analysis is required in order to demonstrate the case for a provincial roll-out. The program proposes to introduce new prescriptive measures and activities that can drive savings across the sector; it is necessary to demonstrate through a pilot the actual, measured savings to be used in the future as prescriptive inputs. In order to gauge the success of a province-wide program, Welland Hydro proposes to pilot a holistic market transformation program targeted at the residential sector in the Welland Hydro service territory. This pilot will allow Welland Hydro to verify consumption and demand savings from a number of measures and activities, while evaluating the impact of a sophisticated Customer Engagement Portal and tuning it for success. This section outlines the proposed pilot delivery plan. 2.1 Pilot Partner: Enbridge Gas Distribution As the pilot is intended to offer the participant a one-stop shop for both electricity and natural gas savings, collaboration with Enbridge Gas Distribution is essential. Unfortunately, Enbridge has declined our offer to collaborate at the outset of the pilot to help to ensure a seamless experience for the customer. At any point in the future, Welland Hydro would welcome Enbridge into the pilot to allow the customer to be able to draw from the electricity measures unique to the pilot, as well as all other saveonenergy measures and any relevant gas measures available from Enbridge s DSM programming. When that time comes, Welland Hydro will work with Enbridge to establish a memorandum of understanding to clearly describe the nature of the collaboration and the roles and responsibilities of each partner. 2.2 Pilot Operations 8 The pilot participation process and activities are presented in Exhibit 15, they are the same as the program participation process described in Section The items in green are any activities conducted outside of the Customer Engagement Portal, and items in blue are any activities conducted inside of the Customer Engagement Portal. The key services offered to pilot participants are described below: Customer Engagement Platform: An online Customer Engagement Platform will be used to scope potential opportunities and connect with program participants on an on-going basis. One of the numerous valuable tools provided within the Portal is the Utility System Optimizer, which determines what actions the customer can undertake to achieve the greatest net gain towards their primary motivator (financial savings, environmental impact, or comfort). With some basic inputs from the customer, the platform s Utility System Optimizer will pre-populate with available data and will provide a prioritized action plan to the customer. The customer can also use the Home Assessment Wizard to input additional details about their home and energy usage, and improve the accuracy of the Optimizer s recommendations. When coupled with appropriate marketing, this platform will enable massmarketing of residential programs with low administration costs. The platform will also boost customer satisfaction and energy efficiency (EE) program participation. Energy audits: Energy audits will be required for program participants who are considering implementing insulation measures and other envelope upgrades. Energy audits will also be an important component of the M&V approach for the pilot. As noted above, customers will be required to cover the cost of energy audits up front. However, they will be reimbursed for 8 For the convenience of the reader, this section includes duplicated information icfi.ca

34 these costs if they choose to implement at least two envelope-related measures. This approach is similar to the one currently being used by Enbridge for their Home Energy Conservation Program. The pilot program will also leverage the pool of pre-qualified auditors being used for Enbridge s program and look for opportunities to share costs with Enbridge. Incentives for a broad list of measures: In addition to the incentives currently being offered through the residential coupon program, the pilot program will offer incentives for a broad list of measures. This includes measures with electricity savings, gas savings, and electricity and gas savings (e.g. envelope measures for gas heated homes with central AC). Two of the new measures are shown in Exhibit 14 to illustrate the different rebate application processes. The customer can look at the Marketplace for ideas related to eligible ENERGY STAR Most Efficient refrigerators and then purchase a suitable fridge through the retailer of their choice, either online or in-store. In either scenario, the customer will be prompted to apply for the rebate through the Portal. Envelope measures, such as installing additional wall insulation, are a little bit more complicated and may require HOT000 modeling for pre- and post-installation. Again, customers are free to select the contractor of their choice, and will be prompted to apply for the rebate through the Portal. Technical and Administrative Support: This will provide access to technical expertise to assist residential customers with questions related to the program and the energy efficiency measures that they should consider implementing in their homes icfi.ca

35 Exhibit 22 Pilot Participation Process Program Marketing Residential Customers Customer Engagement Platform Dashboard based on history of engagement Bill and Usage Home Assessment Wizard Utility System Optimizer Recommended Actions Replace your fridge with an energy efficient model Install new wall insula t ion Marketplaces Purchase Online Rebate Applications Purchase In Store Select Contractor Hot2000 pre-model Installation by Contractor Hot2000 post-model Rebate Applications Application Approved? Yes No Application Approved? Welland Hydro Sends Cheque To Customer Welland Hydro Sends Explanation To Customer Yes No Welland Hydro Sends Cheque To Customer Welland Hydro Sends Explanation To Customer The comprehensive list of Welland Whole Home pilot measures with electricity savings, including some measures with both electricity and gas savings, is shown below. Measures with no electricity savings are not included in the list since they are specific to gas and water CDM and would not benefit Welland Hydro s electricity CDM efforts icfi.ca

36 Exhibit 23 Comprehensive List of Measures included in Welland Whole Home Pilot End Use Measure Measure Description Base Measure Controls for Lighting Controls for Lighting Controls for Lighting Controls for Lighting Controls for Lighting Controls for Space Cooling and Heating Controls for Space Cooling and Heating Dimmer Switch (Hard-Wired) Heavy Duty Plug-In Timers (Holiday Lighting) Heavy Duty Plug-In Timers (Outdoor Lighting) Lighting Timers (Hard-Wired, Indoor) Motion Sensors (Hard-Wired, Indoor) Smart Thermostats (Gas Heating and CAC) Programmable Thermostat (Baseboard) Hard-Wired Dimmer Holiday Lighting Timers Outdoor Lighting Timers Hard-Wired Indoor Timers Hard-Wired Indoor Motion Sensor Smart Learning Thermostats (Gas Central Heating and CAC) Programmable Thermostat for Baseboard Heaters Electric Auxiliary Dual Speed Pool Pump Motors Dual Speed Pool Pump Motors Res - Electric Auxiliary Variable Speed Pool Pump Motors Variable Speed Pool Pump Motors Res - Household Appliances Household Appliances Household Appliances Clothes Washers - Large (Elec DHW) Clothes Washers - Large (Gas DHW) Refrigerators - Extra-Large ENERGY STAR Most Efficient Clothes Washer (Larger than 2.5 cu ft) - Elec DHW ENERGY STAR Most Efficient Clothes Washer (Larger than 2.5 cu ft) - Gas DHW ENERGY STAR Most Efficient Refrigerators (Larger than 22.5 cu ft) 2 x 60W Incandescent bulbs with a conventional On/Off switch for a ceiling fixture No holiday lighting timer No outdoor lighting timer Conventional light fixtures with no control devices Conventional light fixtures with no control devices Mixed (Manual and Std Prog Tstats) Non-programmable thermostats installed on baseboard heaters Std Washers (> 2.5 cu ft) - Elec DHW Std Washers (> 2.5 cu ft) - Gas DHW Standard Refrigerators (>22.5 cu ft) icfi.ca

37 End Use Measure Measure Description Base Measure Household Appliances Household Appliances Refrigerators - Large Refrigerators - Medium ENERGY STAR Most Efficient Refrigerators ( cu ft) ENERGY STAR Most Efficient Refrigerators (Up to 18 cu ft) Lighting ENERGY STAR Qualified LED Bulbs General Pupose LEDs Lighting Lighting Lighting ENERGY STAR Qualified LED Bulbs ENERGY STAR Qualified LED Bulbs ENERGY STAR Qualified LED Bulbs Specialty LEDs (Candle) Specialty LEDs (Flood/Reflector) Specialty LEDs (Globe) Standard Refrigerators ( cu ft) Standard Refrigerators (Up to 18 cu ft) Baseline mix (incandescent/halogen, CFL, LED) Baseline mix (incandescent/halogen, CFL, LED) Baseline mix (incandescent/halogen, CFL, LED) Baseline mix (incandescent/halogen, CFL, LED) Lighting ENERGY STAR Ceiling Fan - Existing Ceiling Fan Lighting ENERGY STAR Ceiling Fan - Existing Light Fixture Lighting Lighting Miscellaneous ENERGY STAR Qualified Specialty Compact Fluorescent Lamps (CFLs) ENERGY STAR Qualified Specialty Compact Fluorescent Lamps (CFLs) Efficient Aerators 26W, Outdoor Baseline mix (incandescent, CFL, LED) Chandelier CFLs Kitchen: Flow Rate < 5.7 L/min; Bathroom: Flow Rate < 3.8 L/min (Electric DHW) Miscellaneous Efficient Showerhead Flow Rate < 4.8 L/min Baseline mix (incandescent, CFL, LED) Aerator with Flow Rate = 8.3 L/min Showerhead with Flow Rate = 7.57 L/min Miscellaneous Solar Pool Heaters Solar Pool Heating Systems Heat Pump Pool Heaters Miscellaneous Clotheslines Outdoor clothesline umbrella stands or clothesline kits Clothes Dryer (141 loads/yr) Miscellaneous Heavy Duty Plug-In Timers Car Block Heater Timer No timer on the car block heater Miscellaneous Heavy Duty Plug-In Timers Pool Pump Timer No timer on the pool pumps Miscellaneous Heavy Duty Plug-In Timers Spa Pump Timer No timer on the spa pump icfi.ca

38 End Use Measure Measure Description Base Measure Miscellaneous Power Bar With Integrated Timer - No Power Bar Miscellaneous Space Cooling and Heating Space Cooling and Heating Space Cooling and Heating Space Cooling and Heating Thermal Envelope Thermal Envelope Thermal Envelope Thermal Envelope Thermal Envelope Thermal Envelope Thermal Envelope Thermal Envelope Thermal Envelope Power Bar, Smart (With Auto Shut- Off) ENERGY STAR Central Air Conditioner ENERGY STAR Central Air Conditioner Furnace with ECM - No Power Bar SEER 14.5 SEER 15 Space heating and cooling, average home SEER 13 Central Air Conditioner SEER 13 Central Air Conditioner Furnace w/ PSC mtr, heat/cool, avg home Furnace/Air Conditioner Filter - Replace filters twice a year ENERGY STAR Windows ENERGY STAR Windows ENERGY STAR windows double glazed (e= and U=0.37) ENERGY STAR windows double glazed (e= and U=0.37) Electric-Fired, ECMs, Avg Homes Gas-Fired, ECMs, Avg Homes Residential Air Sealing Electric heating Std ACH for vintage and type of home Residential Air Sealing Gas heating Std ACH for vintage and type of home Residential Attic Insulation Electric heating Residential Attic Insulation (R-10) Residential Attic Insulation Gas heating Residential Attic Insulation (R-10) Residential Basement Insulation Residential Basement Insulation Residential Wall Insulation Electric heating (Addition of R-12 insulation) Gas heating (Addition of R-12 insulation) Electric heating (Addition of R-10 insulation to 50% of wall space) Std insulation for home vintage and type Std insulation for home vintage and type Std insulation for home vintage and type icfi.ca

39 End Use Measure Measure Description Base Measure Thermal Envelope Thermal Envelope Thermal Envelope Thermal Envelope Thermal Envelope Water Heating - Residential Water Heating - Residential Residential Wall Insulation Weatherstripping (Door Frame) Weatherstripping (Foam Or V- Strip) Gas heating (Addition of R-10 insulation to 50% of wall space) Replaced Existing Weatherstripping (Electric Heat) Replaced Existing Weatherstripping (Electric Heat) Std insulation for home vintage and type With Existing Weatherstripping (Electric Heat) With Existing Weatherstripping (Electric Heat) Window Solar Film Electric-Fired, ECMs, New Homes Standard windows with no solar film Window Solar Film Gas-Fired, ECMs, Existing Homes Standard windows with no solar film Drain Water Heat Recovery - No drain water heat recovery Hot Water Pipe Wrap Per 3' Pipe Wrap (3/4" Pipe) No pipe insulation Water Heating - Water Heater Blanket New Electric Water Heater Blanket No Water Heater Blanket Residential * For more information, please see Section icfi.ca

40 2.3 Objectives of the Pilot Project Holistic measure offerings, including new easy-to-access measure incentives, and a dynamic Customer Engagement Platform and will all be tested as part of a collaborative program focused on the whole home. The main objectives of the pilot project are listed in Exhibit 16. Pilot Strategy Integrated Measure Offerings Across Multiple Utility Service (e.g. electricity and gas) Exhibit 24 Pilot Desired Outcomes Desired Outcome Design and test one-stop shop for residential customers Incentives for a Broad List of Measures Confirm incremental costs of new measures Confirm prescriptive incentive level for new measures Achieve high levels of participation, with the increased likelihood that customers will find measures best suited to their needs Determine applicability for province-wide inclusion of new measures Opportunity Identification through Utility System Optimizer tool in the Customer Engagement Platform Goal Setting and Project Management through the Plans and Actions tool in the Customer Engagement Platform Rebate and Incentive Database and Submissions through the Customer Engagement Platform Residential customers receive customized action plan, with minimal time and effort Clear and straightforward recommendations empower customers to move forward with recommended actions Customers are shepherded through a continuous improvement journey, with minimal effort from the utilities The tool will help reduce errors and administration costs related to incentive applications Customers will find the application process clear and straightforward and will be encouraged to pursue multiple projects Technical and Administrative Support Test customer satisfaction of technical services based on customer survey Collaboration with Gas Utility Develop and pilot a detailed collaboration process that will result in the appearance of a one-stop-shop for energy efficiency from the customer s perspective Leverage gas energy efficiency programs currently in the market, including their network of energy auditors icfi.ca

41 2.4 Pilot Participant Criteria The pilot is open to all residential customers in Welland Hydro s service territory. There are no limits placed on the total number of customers that may participate in the pilot. The more customers participate, the more data we can collect to provide recommendations for a provincial scale up of the program. The only limitation that the program will encounter will be with the incentive budget allocated to it. The relative status of the remaining budget will be monitored on a monthly basis to ensure that there are no issues. The process used to derive the preliminary estimates of measure uptake is described in Section 1.8. As was discussed in section 1.1.2, this program is streamlined for customers that are computer literate, and are comfortable with self-serve web portals. It is also helpful if the customer has a basic understanding of their utility bills and energy saving opportunities. However, assistance and technical support will be provided to all customers who request it. Measure Lighting and Lighting Controls Household Appliances Space Cooling and Heating Water Heating Thermal Envelope Electric Auxiliary Miscellaneous Eligibility Requirements Residential account holder Residential account holder Residential account holder; Space Cooling - electric Space Heating electric or gas Residential account holder; electric water heating Residential account holder Residential account holder Residential account holder; Space Cooling - electric Space Heating electric or gas 2.5 Participant Identification and Engagement Strategy Once the pilot has received approval, Welland Hydro will begin working on the development and implementation of the customer engagement strategy. The strategy will be designed to identify and recruit program participants and it may involve but not be limited to some of the following marketing activities: Newspaper advertisements Bill inserts Social media announcements (Twitter, Facebook, etc.) Commercial at local movie theatre (shown before the movie starts) Youtube video to show how to use the Customer Engagement Portal or answer FAQs Booth at local events, such as the Summer Concert Series and the Fall Food Festival Community Challenge: A prize to the neighborhood that has the most households registered in the Customer Engagement Portal Street teams : Students representing the program go door-to-door to explain the benefits of the program and of investing in energy efficiency improvements around the home icfi.ca

42 Collaborate with CMHC: Collaborating with the Canadian Mortgage and Housing Corporation (CMHC) to provide information on the program to potential participants 2.6 Pilot Incentives ICF, PlanetEcosystems, and Welland Hydro will work together to ensure that the Customer Engagement Portal is set up to guide customers through the incentive application process, and to receive applications online. Although the incentive for which a pilot participant will be eligible will be dependent on the actual measures installed, we expect that will deliver approximately $124,844 in incentives during the 18-month pilot timeframe, in addition to free access to the Customer Engagement Portal. In addition to facilitating access to all existing, relevant IESO incentives, the pilot will provide incremental incentives for a suite of additional measures in the first year of the program. Preliminary estimates of the per unit incentive values for each of the new measures included in the pilot are listed in Exhibit 17. Exhibit 25 Exclusive Welland Whole Home Pilot Incentives Category Appliances HVAC Envelope Measure Description Refrigerators, ENERGY STAR MOST EFFICIENT Medium Heating Fuel Per Unit Incentive - $40 Refrigerators, ENERGY STAR MOST EFFICIENT Large - $40 Refrigerators, ENERGY STAR MOST EFFICIENT - Extra- Large Clothes Washers, ENERGY STAR MOST EFFICIENT Large Clothes Washers, ENERGY STAR MOST EFFICIENT Large - $40 Elec. $40 Gas $40 Furnace/AC Filter - $4 Furnace with ECM Elec. $250 Smart Thermostats (Gas Central Heating and CAC) Gas $10 Air Sealing Elec. $300 Air Sealing Gas $10 Attic Insulation Elec. $200 Attic Insulation Gas $10 Basement Insulation Elec. $250 Basement Insulation Gas $10 Wall Insulation Gas $5 Window Solar Film Elec. $150 Window Solar Film Gas $ icfi.ca

43 DHW Category Pools and Spas Measure Description Heating Fuel Per Unit Incentive Windows, ENERGY STAR double glazed Elec. $75 Windows, ENERGY STAR double glazed Gas $5 Faucet Aerators Elec. $3 Drain Water Heat Recovery (DWHR) Elec. $200 Efficient Showerhead Elec. $5 Dual Speed Pool Pumps - $50 Variable Speed Pool Pumps - $75 Solar Pool Heaters Elec. $ Customer Experience One key purpose of the pilot is to engage the customer regarding energy efficiency and to support them in a continuous improvement journey beyond the pilot. The engagement will begin with the marketing and outreach to recruit pilot participants and will continue beyond the pilot through consistent, personalized, and effective customer messaging mostly through the Customer Engagement Portal. The overall goal is continual improvement in energy efficiency for each pilot participant over the Conservation First Framework. Exhibit 18 illustrates all of the key touchpoints with pilot participants, which are described in more detail below. Exhibit 26 Customer Engagement Overview icfi.ca

44 Customers will first hear about the pilot program through strategic marketing and communication. This may include direct phone call, , or house call to inform the customer about the pilot. However, to minimize marketing costs, the primary method of direct marketing is likely to be bill inserts. Customers may also hear about the program from newspaper or TV advertisements or by speaking with Welland Hydro representatives at a community event. Once the customer begins to use the Customer Engagement Portal, they will have the freedom to use the tools in a way that best meets their needs. Some customers may be most interested in tracking and comparing their monthly bills, but most customers will follow the participation process illustrated in Exhibit Pilot Risk Analysis and Risk Mitigation Plan A Risk Mitigation Plan will be developed as a component of the Detailed Pilot Implementation Plan. Exhibit 22 presents a summary of the key pilot program risks and a risk mitigation strategy that will be followed in the delivery of the pilot, as necessary. Risk Exhibit 14 Risk Analysis and Mitigation Mitigation Strategy/Approach Low program participation Carry out a root-cause analysis to determine how program participation can be improved. Potential solutions to be considered will include but not be limited to: o Making targeted changes to the available incentive amounts o Carrying out additional marketing activities High program participation Available incentive budgets will be monitored on an on-going basis. In the case that incentive budgets are constrained prior to the planned duration of the pilot: o o Additional funding will be requested from the IESO If the funding request is denied, the duration of the pilot will be scaled back Poor customer satisfaction Fully utilize the Customer Engagement Platform to engage customers on a regular basis Targeted communications to address any customer complaints Insufficient administrative budget Welland Hydro is willing to contribute additional in-kind contributions of staffing resources towards the program to cover any unforeseen administrative funding gaps icfi.ca

45 Risk Customer Engagement Platform Protection of Personal Information Gaming of existing saveonenergy initiatives Heating and Cooling Initiative and Coupon Initiative Exhibit 14 Risk Analysis and Mitigation Mitigation Strategy/Approach As part of the Customer Engagement Platform registration process, participants will be required to provide their consent (via an online checkbox / selection beside a statement) confirming their intention to be part of the whole home initiative. It will be made clear that certain types of personal information will be collected only to provide the services contained within the Customer Engagement Platform as well as for any procedures / processes related to the administration of the whole home initiative. Information will be protected in accordance with Provincial and Federal privacy legislation and that at any time, the participant may opt out. To protect against gaming (aka double-dipping ) with regards to incentives from existing saveonenergy initiatives, Welland Hydro will conduct application reviews looking at the following information prior to issuing any incentives for qualifying projects. Post Project Receipts all projects will require that product receipts be submitted as part of the post project submission. Welland Hydro will review all receipts to ensure that no pointof-sale incentives have been issued via participating Retailers in the Coupon Initiative. Review of installing contractor all projects related to the replacement of a qualifying central AC unit and/or furnace with ECM will require product receipts and information related to the installing contractor to be submitted as part of the post project submission. Welland Hydro will review all documentation and if the installing contractor is also a Participating Contractor in the saveonenergy Heating and Cooling Initiative, the customer will be directed to process any applicable incentives through the saveonenergy Heating and Cooling Initiative. 2.9 Pilot Implementation Plan 9 Pilot implementation will be led by Welland Hydro. The flowchart in Exhibit 14 is intended to provide a general idea of the pilot s sequence of operations. Before the pilot is effectively launched, Welland Hydro will work to finalize the pilot implementation plan. It will be consistent with this proposal, but will be refined as necessary. Any major deviations needed will be reviewed and approved by IESO, before moving forward with the pilot launch. The milestones and deliverables of the pilot are laid out in Section Although a high-level overall M&V strategy is presented in Appendix B, a detailed M&V plan will be prepared by Welland Hydro and will be submitted to the IESO for review and approval. The plan will identify any operational aspects of the pilot necessary to track/monitor to address the EM&V strategy the IESO intends to implement for the pilot. The pilot is expected to be implemented over the course of 18 months; therefore the effect on peak seasons both before and after the retrofit will be documented. 9 For the convenience of the reader, this section includes duplicated information icfi.ca

46 The pilot delivery plan will include, but may not be limited to, the following: Program launch strategy (leverage of various media, recognition of participants, etc.) Participant satisfaction plan and its implementation: a survey will be administered to pilot participants to gauge satisfaction, once the pilot is complete. The survey is intended to provide the basis for recommendations for a provincial launch of the program. The document will be developed by Welland Hydro with consultation with the IESO. Ongoing liaison with IESO via milestone memos (and monthly reports after the launch of the Customer Engagement Platform) Project Team biweekly telephone or face-to-face meetings Implementation of the pilot plan will include: Delivery of the program launch Ongoing support to participating residents Delivery of customer satisfaction plan and analysis of results Implementation of the M&V plan Set up, attendance and preparation of notes of internal meetings and with IESO Welland Hydro will provide both technical and application support for all pilot participants. Depending on the nature of the support, ICF and PlanetEcosystems may provide additional technical support. Pilot participants will have access to recommended equipment and services through the Customer Portal. Welland Hydro will take note of the success and challenges of this process for a future provincial roll-out Schedule and Milestones The pilot will run for 18 months (execution of funding contribution agreement to submission of final report to the IESO), to maximize the time that the pilot runs in order to test the program elements and their implementation. Welland Hydro will provide monthly progress s to the IESO program manager, identifying any emerging issues for discussion, and resolution. Where necessary, Welland Hydro will recommend meetings with the IESO project manager to address any emerging complex issues. The exhibit below presents a schedule for project deliverables. It assumes execution of the funding contribution agreement between Welland Hydro and IESO by the end of June 2016 and an 18 month pilot from this execution to the end of December More information on activities associated with each Task Area is presented in the budget in Exhibit 27 Pilot Milestone Schedule Tasks, Milestones, and Deliverables Due Date Budget Task Area 1: Refine Implementation Plan $20,000 - Preliminary measure refinement - Develop M&V plan - Partner engagement (service providers) - Set up collaboration process with Enbridge Milestone 1 Final Deliverable: - Milestone 1 Briefing Memo January 31, icfi.ca

47 Tasks, Milestones, and Deliverables Due Date Budget Task Area 2: Portal Configuration & Data Gathering $65,000 - Refinements of segments/audit form questionnaire - Import customer rate structure - Setup rebate and equipment marketplace - Update eligible measures and input assumptions - User interface reskinning - Updating content and Learn More - Refine marketing approach and required alerts - Definition of landing pages for campaigns - Define and setup admin reporting and campaign tracking - Setup data interfaces Milestone 2 Final Deliverable: - Milestone 2 Briefing Memo June 30, icfi.ca

48 Exhibit 28 Pilot Milestone Schedule Tasks, Milestones, and Deliverables Due Date Budget Task Area 3: Portal Testing and Launch $184,844 - Full-scale testing - User acceptance testing - Formal acceptance - Develop overall communications plan - Initial soft launch - Full-scale launch - Participant marketing and engagement Milestone 3 Final Deliverable: - Milestone 3 Briefing Memo December 31, 2017 Task Area 4: Post-Launch Activities $20,000 - Ongoing maintenance of Portals - Provide technical assistance (when questions/issues arise with the portals) - Assess measure uptake - Refine and update Portals - Monthly ed Home Utility Reports - Home energy audits (for envelope measures and M&V) Milestone 4 Final Deliverables: - Bi-monthly Briefing Memos - Mid-point report June 30, 2018 Task Area 4: Pilot Reporting $3,250 - Participant satisfaction surveys - Pilot program final report Milestone 6 Final Deliverables: - Final Report - Reconciliation Report (within 30 days of IESO approving final report ) November 30, icfi.ca

49 2.9.2 Surveys and Interviews The pilot will involve one survey with a sample of pilot participants, which is discussed in detail below. Participant Satisfaction Survey Following the results of the pilot, a Satisfaction Survey will be administered to participants to assess their overall experience. Among other things, the survey will ask participants to prioritize barriers to energy efficiency. The survey is intended to be a useful evaluation tool to inform the provincial program structure. As such, the issues that may be probed may include but not be limited to: Value of the Customer Engagement Platform Value of the comprehensive gas and electricity program offerings Incentive levels and free ridership Role that customer support and incentives played in customer decision to choose and implement a measure Methods of improvement to the process in a provincial context Whether or not the customer intends to continue using the Customer Engagement Platform Interviews In addition to the surveys, Welland Hydro will carry out an interview with Enbridge staff (if Enbridge becomes involved at some point), PlanetEcosystems and ICF to obtain feedback on what worked well, what could be improved and lessons learned regarding the Customer Engagement Platform, the included measures, the incentives and incentive levels, and other matters germane to pilot delivery icfi.ca

50 2.9.3 Project Team Welland Hydro will be the program administrator of the pilot. Welland Hydro has retained ICF in collaboration with PlanetEcosystems to manage the Customer Engagement Platform component of the program. Exhibit 29 Project Team IESO Innovation Fund Welland Hydro ICF (led by Judy Simon) Enbridge Gas Distribution Planet Ecosystems icfi.ca

51 2.10 Pilot Budget The proposed budget for the pilot project is $293,094. The breakdown is presented below. As noted in the detailed budget, this includes a significant in-kind contribution from Welland Hydro. The Expenses category reflects marketing costs over the 18-month pilot timeframe, while the ICF & PlanetEcosystems category reflects the cost for the setup and ongoing maintenance of the Customer Engagement Platform. This includes the cost to distribute ed reports to program participants on a monthly basis and is based on a proposal received by Welland Hydro on May 15, Furthermore, the estimated cost of energy audits is included in the Incentives category. Exhibit 30 Proposed Budget for the Pilot icfi.ca

52 Exhibit 23 Proposed Budget for the Pilot (cont d ) Tasks or cost items Labour Subtotal Expenses Program- Specific Customer Incentives ICF & Planet Ecosystems Expenses Subtotal Total Budget Task Area 4: Post-Launch Activities $64,000 $10,000 $10,740 Sub-total hours 640 h. Project Management 60 h. Ongoing maintenance of Portals 0 h. Provide technical assistance with the portals) 150 h. Application reviews and issuing cheques 300 h. Refine and update Portals 0 h. Monthly ed Home Utility Reports 0 h. Incentives (including energy audits) 0 h. $131,000 Bi-monthly briefing memos to the IESO 100 h. Preparation of draft Midpoint Report 30 h. Task Area 5: Pilot Reporting $10,000 Sub-total hours 100 h. Project Management 10 h. Participant satisfaction surveys (design and delivery) 30 h. Pilot program Final Report 60 h Pilot Financial Impact and Cost-Effectiveness The financial impact of the program was determined based on the PAC and TRC costeffectiveness tests applied in the IESO s Cost-effectiveness Tool. The results of the tests are contained in Appendix C. Original cost-effectiveness testing was completed by ICF in December However, the results that are submitted with this business case are based on updated cost-effectiveness modeling that was completed by Rouselle Gratela of the IESO and updated by ICF to reflect more recent data on Welland Hydro s residential customers, including number of households and fuel shares for space heating and water heating. The tests were done for a multi-year program not for the 18 month pilot. The tests were also performed for both natural gas and electricity costs and savings and just for the electricity portion of the program. As such, measures with only gas savings are not included in the cost-effectiveness testing and any costs that would be borne by Enbridge are not included as well. 10 The modelled incentives include the existing IESO rebates, as well as the new measures. Exhibit 22 summarizes the results of the cost-effectiveness modeling and shows that the results are fairly favorable from both the program administrator s perspective (i.e. PAC ratio) and from a societal perspective (i.e. TRC ratio). In addition, the levelized cost results compare well with the incentives that are offered for non-lighting projects under the Retrofit program (i.e. ($0.05/kWh and $400/kW). 10 In addition, the updated IESO modeling does not include gas savings for the smart thermostat measure icfi.ca

53 Program Year Exhibit 31 Summary of Cost-Effectiveness Modeling Results Total Resource Cost (TRC) Ratio Program Administrator Cost (PAC) Ratio Levelized Cost (LC) ($/kwh) Levelized Cost (LC) ($/kw) Pilot Year $0.04 $ All Program Years Uptake estimates were varied by +/- 30% to assess the potential impact on the program costeffectiveness if the uptake is higher or lower than is estimated. The results of this analysis indicated that a 30% lower participation would result in a TRC of 1.14 and a PAC of 2.48, while a 30% higher participation would result in a TRC of 1.23 and a PAC of This fairly minor impact on the TRC and PAC results reflects the fact that a relatively high proportion of the overall budget for the pilot program is dependent on the measure incentives. 3 Program Operations Plan The Programs Operation Plan will be developed based on the results of the pilot project. 3.1 EM&V Strategy Welland Hydro will provide the IESO at its request the following information for all participants: Name, account number, address, phone number, and consumption data Rate class Since the program makes use of existing measures that are available through the IESO s Coupon and Heating and Cooling Incentive programs, the savings for these measures have already been defined. The program also makes use of prescriptive input assumptions for several measures that the IESO has evaluated but never included in any of its energy efficiency programs. This includes the following measures: Furnace/Air Conditioner Filter Residential Attic Insulation Window Solar Film ENERGY STAR Windows Drain Water Heat Recovery Dual Speed Pool Pump Motors Variable Speed Pool Pump Motors EM&V will not be completed for any of these measures since prescriptive input assumptions related to savings are already available from the IESO. Input assumptions for the measure savings of the following measures were derived from other sources: ENERGY STAR Most Efficient Refrigerators (Up to 18 cu ft) ENERGY STAR Most Efficient Refrigerators ( cu ft) ENERGY STAR Most Efficient Refrigerators (Larger than 22.5 cu ft) ENERGY STAR Most Efficient Clothes Washer (Larger than 2.5 cu ft) - Elec DHW icfi.ca

54 Smart Learning Thermostats (Gas Central Heating and CAC) Residential Air Sealing, Electric heating Residential Basement Insulation, Electric heating Residential Wall Insulation, Electric heating (Addition of R-10 insulation to 50% of wall space) Solar Pool Heating Systems (Replacement of electric heating) The scope of the savings from envelope measures will be estimated based on pre- and postretrofit HOT2000 modeling of homes. Depending on participation, utility bill analysis will be used to verify that the magnitude of the savings being estimated is in line with the actual savings for either all homes that undertake envelope upgrades or a sample of these homes icfi.ca

55 Appendix A Demonstration of Program Collaboration Enbridge April 30, 2015 Mr. Jason Biesma Customer Service and CDM Manager Welland Hydro-Electric System Corp. Dear Mr. Biesma, As part of the new Demand Side Management framework, gas utilities like Enbridge Gas Distribution ( EGD ) are encouraged to pursue coordination and integration in designing, promoting and delivering DSM programs with Local Distribution Companies ( LDC s ) like Welland Hydro-Electric Systems Corp. ( WH ). I understand that the new Conservation and Demand Management framework, also known as Conservation First framework, encourages LDCs to collaborate with gas utilities where appropriate. The purpose of this mandate for collaboration is to increase overall efficiency, reduce delivery costs and maximize program impacts especially as it relates to the customer experience. EGD acknowledges the importance of this mandate and its benefit to our organizations and ultimately our mutual customers. EGD sees a high degree of value in a collaborative approach in markets such as the Residential Whole Home programming space. Through this letter, we continue to offer our support and willingness to partner with WH in ways that we agree make sense. Although we have not yet received regulatory approval of our DSM plan filed on April 1, we thank you for your patience and remain willingly engaged in any new or updated ideas that may come along until we are in a position to proceed. We look forward to closing the loop on this or other potential opportunities of mutual interest in the weeks and months ahead. Yours Truly, Fiona Oliver-Glasford MBA Senior Manager, Market Policy, Research and Demand Side Management ENBRIDGE GAS DISTRIBUTION INC. TEL: CELL: Atria 1, 4 th Fl., Suite 410, 2255 Sheppard Ave., E., North York, ON M2J 4Y A-1 icfi.ca

56 Appendix B M&V Approach Pilot Project M&V Approach Since the savings for a large proportion of the measures are defined by the IESO, M&V only needs to be contemplated for a fairly small list of measures. As noted in Section 3.1, this mostly includes envelope measures. The M&V approach for these measures will involve completing utility bill analysis for homes that have undertaken envelope improvements, coupled with preand post-retrofit HOT2000 models of the homes. Depending on the participation rate for these measures, it may be adequate to carry out this analysis for only a subset of the homes that have undertaken envelope improvements. The monitoring and verification (M&V) plan for the pilot program will be refined at the start of the pilot project. Appendix C Cost-Effectiveness Testing Please see Excel file 3. Welland Hydro Whole Home Retrofit CE v3 11Nov15 (all program years + gas savings) - rev admin only for cost-effectiveness testing of measures including a portion of the gas savings and none of the gas costs C-2 icfi.ca

57 Appendix D Customer Engagement Platform Details Customer Portal P-ECOSYS s Customer Portal will provide Welland Hydro with a fully functional, one-stop, selfserve access point that facilitates a superior engagement with customers. P-ECOSYS may be configured to present context-sensitive landing pages, including a dashboard that reinforces messaging and inspires customers to visit the site on an on-going basis. Context-sensitive landing pages reduce visitor bounce rates and produce more thoughtful customer interactions with the site, such as the experiences illustrated below by customers that have declared an interest in carbon footprint reduction. Exhibit E- 1 Example Dashboard Configuration 2014 D-1 icfi.ca

58 Exhibit E- 2 Example Dashboard Cut Outs for Carbon Messaging P-ECOSYS can be configured to allow customers to use the web Customer Portal in two ways: as an Anonymous Experience, and as a Signed-in Experience (i.e. as part of their Welland Hydro account). Anonymous Experience: If a user declines to setup or utilize an existing Welland Hydro account, they can proceed with the anonymous experience. They proceed directly to the home diagnostics, marketplaces, rebates applications or other tools. Signed-In Experience: If a customer decides to establish a profile or sign into one setup previously, P-ECOSYS can be configured for them to proceed to a dashboard based on their previous history of engagement. Once logged-in, the customer can use diagnostics and other tools, and all their information is automatically preloaded. The dashboard structure is readily configurable with a library of pre-configured widgets. Each of the tiles and prompts in the dashboard are clickable, such that the customer can click through to each of the functions described in the subsections below. E.1 Bill and Usage While Welland Hydro already uses Harris for bill presentment, P-ECOSYS can add additional bill related insights, including: Comparisons: P-ECOSYS offers four factors for similar home comparison; home size, distance away, occupancy profile, and behavior Bill Changes: Customers often notice changes in their bill, and are interested in understanding the reason for such changes; the platform is able to provide robust information and visualization that explains changes in bills from month-to-month and yearover-year, as illustrated in the exhibit below D-2 icfi.ca

59 Exhibit E- 3 Example Bill Changes Explanation Screen Usage/Bill Profile: For simplicity, disaggregated usage information is typically configured to be presented to customers in major end-use groupings. Usage profile information, illustrated in the exhibit below, allows usage characteristics to be explained, compared, benchmarked, and forecasted. Exhibit E- 4 Example Bill Profile Screen 2014 D-3 icfi.ca

60 Each time customers access this information, they are gently encouraged to improve its accuracy by completing the short survey (i.e. the My Home Assessment wizard) that takes a few minutes to review. This tool is described in more detail in Section E.3. E.2 Savings Opportunities P-ECOSYS provides customers with a Utility System Optimizer (USO), a unique diagnostics tool that uses a recommendations engine that is entirely oriented around helping customers get the most from their home utility system based on each consumer s primary motivator, such as: Financial savings: Maximizing net economic savings Environmental impact: Minimizing their utility systems carbon footprint for a given budget Comfort: Maximizing their home s comfort for a given budget The optimizer is pre-populated with available data and it quickly determines what actions each customer can undertake that will deliver them the greatest net gain towards their primary motivator. The USO optimizes the economics of all opportunities through many interacting factors, including: Integrating across multiple utility services (e.g. water, electricity, and gas) Integrating across multiple action types (e.g. behavior, efficiency, generation) Incorporating all applicable incentives, rebates, etc. Considering measure lifetimes The USO tool presents the prioritized action plan (i.e. usually less than ten items), with the impact of each clearly reported, and information and other click-throughs help increase consumer confidence in taking action. Consumer action is promoted as a result of quick access to next steps, which take users to subsequent functionality set out under My Actions, such as connecting customers with vendors. In short, the USO runs through millions of combinations of potential actions in a way that maximally exploits opportunities, usage characteristics, complex utility marginal pricing and other factors, to deliver the customer with the very best outcome. An example recommendations screen is depicted below for the Maximize Net Savings consumer experience D-4 icfi.ca

61 Exhibit E- 5 Example Recommendations Screen 2014 D-5 icfi.ca

62 Exhibit E- 6 Customized Action Plan Examples The exhibit above sets out customized recommendations addressing four different objectives. Optimization has proven very effective in increasing customers engagement, while delivering solutions with gains that are compelling and targeted to each customer s primary motivations. Each recommended action is available for detailed examination, together with easily accessible and prominent calls-to-action, as depicted in the exhibit below. P-ECOSYS residential USO tools are available for single-family and multi-family configurations, and supports owner, landlord and tenant needs. Exhibit E- 7 Example Specific Recommendation Screen 2014 D-6 icfi.ca

63 E.3 Home Assessment Wizard The collection and use of the right customer data is the cornerstone of providing a customized (and therefore relevant and compelling) action plan, optimized for the customer s circumstances and operating patterns. Using only the customer s name and address, the USO obtains needed default information from external sources. The information collected includes floor area (square footage), bedroom and bathroom counts, construction date, weather data, and occupancy. Using this information, the recommendations engine and all of the Customer Portal functionalities may be operated without any customer input at all. However, users have the opportunity to refine the data that is being used to derive the recommendations. This is accomplished through the Home Assessment Wizard. With its simple graphical interface, this tool, depicted in Exhibit E- 8Error! Reference source not found., allows homeowners to easily update the information being used to characterize their homes. Exhibit E- 8 Baseline My Home Assessment Input Screens 2014 D-7 icfi.ca

64 E.4 Plans and Actions P-ECOSYS recommendations functionality provides a very easy customer management of their opportunities, and has been thoroughly tested with users. The process comprises three stages, each available at a click on a non-linear basis, and similarly formatted for easy acquaintance. Specifically, customers have access to: Recommended Actions Committed but not yet completed actions (i.e. My Actions List ) Completed Actions The My Actions List provides customers with goal setting and project management functionality, where dollar, carbon and other goals may be set by selecting actions from the Recommended Actions list. Project reminders and alerts may be configured to prompt action and provide information such as foregone savings resulting from delays. As each action is completed, the results are tracked on the Completed Actions list for decision reinforcement and encouragement of future actions. Customers also have the opportunity to decline items from the Recommended Actions list, allowing P-ECOSYS to re-allocate higher marginal rates to other opportunities, as appropriate. E.5 Appliance and Equipment Marketplace This component of the Customer Portal promotes action by seamlessly enabling customers to carry out research on the equipment and appliances they need at the time where they are most likely to make decisions. The tool can refer any customer to any equipment or appliance provider and it can also be used to narrow down referrals to just those providers and items that are relevant to each customer s My Actions List. Use of the mobile application helps in-store shoppers prioritize their shopping to meet their My Action List. To help motivate users and decisions to purchase equipment with higher up-front costs, the platform provides the total cost of ownership for each appliance (i.e. including energy use throughout the life of the equipment). Multiple retailers can be incorporated into the appliance and equipment marketplace. This typically includes larger retailers such as Best Buy and Home Depot but additional local retailers may also be added as desired. Users can also be given the option to compare pricing between retailers on one screen, helping them to make confident purchase decisions D-8 icfi.ca

65 Exhibit E- 9 Example Web Appliance Marketplace & Comparison Screens E.6 Rebate and Incentive Database and Submissions With all the relevant information already at hand, this tool is able to make rebate submissions automatically on each consumer s behalf. This helps in reducing errors, increases the effectiveness of incentives, and reduces administration costs. The tool also serves as a database for incentives applicable to each consumer, with links to any relevant forms. A sample incentive search screen is shown in Exhibit E D-9 icfi.ca

66 Exhibit E- 10 Example Incentives Search Screens E.7 Alert Management Tools The Alert Management tools allow customers to configure and set alerts and notifications, prompting action and reporting events, opportunities and progress. P-ECOSYS supports alerts for such events as: Shift to next price tier Unusual usage (i.e. to avoid bill surprises) Deals and opportunities (including program cross-promotion) Power outage/restoration notice and timing estimates Bill due Additional messaging is readily configured, together with parameters in P-ECOSYS rules engines to manage issuance. Alerts are readily integrated with utility systems and are available for smartphones using . Customers are able to adjust preferences using the web Customer Portal or our smartphone app D-10 icfi.ca

67 Exhibit E- 11 Alerts Preferences Screen E.8 Social Features P-ECOSYS incorporates a range of social features designed for a deeper level of consumer engagement. These features unlock key and often emotionally-based motivators of consumer action. These include inspiring and entertaining social-oriented tools and features, often exploiting proven gamification techniques, such as rewards and progress, to promote action and bring customers to programs. Our social features also include more established normativecomparative techniques, and integrated media and ground-game campaigns. Group-Based Co-Opetition: P-ECOSYS includes group functionality that facilitates groups to form, and compete and compare results. This encourages collaboration, competition, and other interactions. Groups may be defined by users to facilitate interaction between employees, companies, departments, or other ad-hoc groups such as streets or clubs. An example screen is illustrated in Exhibit E- 12. Exhibit E- 12 Example Group Social Screen 2014 D-11 icfi.ca

68 Programmatic Support: P-ECOSYS group functionality has been configured to support commonly used program configurations, such as schools-based programs. In a schools program, for example, the platform may support an in-classroom curriculum, student pledges, tracking and reporting of equipment installations, and progress and rewards associated with prescribed actions. The screen figure illustrates a schools program pledge form. Exhibit E- 13 Example School Program Screen Progress and Awards: The recognition of progress and distribution of rewards are proven techniques for encouraging action. P-ECOSYS is readily configured to communicate progress, such as completed actions taken and reductions in usage. The platform also provides the basis for the distribution of rewards, including coupons and cash. Program Sign-Up: This feature allows customers to sign up for various types of utility programs. The P-ECOSYS platform includes functionality for the presentation of program parameters, and the application and acceptance by customers into programs. P-ECOSYS flexibility allows for programs to be readily configured. An example School Challenge program sign-up screen is depicted in Exhibit E D-12 icfi.ca

69 Exhibit E- 14 Example School Program Sign-Up Screen E.9 Channel Availability P-ECOSYS supports PCs, smart phones, and tablets but it can also be configured to deliver messaging by and other media (e.g. alerts, online ads, etc.). This allows messaging to be communicated in a convenient way on a timely, mass-customized basis. The mobile application supports usage and bill information, recommendations and other capabilities, such as the equipment market place. Moreover, P-ECOSYS may provide alerts by , text (i.e. SMS) and social media to customers based on user-selected preferences. This feature both improves customer control and understanding, while also avoiding bill surprises and associated inbound customer inquiries to call centers. Images of key mobile app s screens are depicted in Exhibit E D-13 icfi.ca

70 Exhibit E- 15 Key Mobile App Screens 2014 D-14 icfi.ca

71 Administrator Portal P-ECOSYS s Administrator Portal provides administrators with considerable functionality to configure and maintain the platform such that it provides the best possible support for consumer engagement services and activities. Such administrative work may be conducted by Welland Hydro following the initial configuration process. The Administrative Portal supports administrators in four areas: 1. P-ECOSYS Platform: Facilitates adjustments to platform configuration to meet and maintain support of consumer engagement needs 2. Campaign Tools: Enables the design and execution of programs, such as mailed outreach, field solicitation, and install and inspection initiatives by providing insightful information and analysis of customers 3. Performance and Reporting: Facilitates the assessment of program performance for program design, tracking, and regulatory reporting purposes 4. Customer Support: Provide access to P-ECOSYS information to facilitate effective and consistent customer support E.10 Home Utility Reports Programs with periodically mailed reports that include normative-comparative messaging are now well established and these reports have proven impacts. These Home Utility Reports (HURs) are a key component to initializing and developing an integrated, 360 dialog with customers, while also being a valuable resource themselves in delivering new sources of value to customers, and promoting behavior change through their normative-comparative messaging. P-ECOSYS supports both and mail HURs, however we have only budgeted for ing HURs on a monthly basis in this proposal. Using the P-ECOSYS platform, Welland Hydro will be able to deliver HUR messaging that motivates customer action using specific and tailored recommendations and insights that are consistent with those presented to customers in all other parts of the P-ECOSYS platform. The Home Utility Reports have two main roles: Behavioural responses: As a stand-alone instrument, the HURs use normativecomparative techniques to reduce utility demand through behavioral responses. Ongoing engagement: In providing tailored solutions and other messaging, the HURs entice customers to enter into an ongoing dialog with Welland Hydro using the web and other media. This can lead to additional and deeper energy savings. HURs are configurable, action-oriented, highly personalized, and include customized recommendations, targeted marketing and other fields. The content is also routinely updated to keep customers engaged. Components of a typical Home Utility Report include: Normative-Comparative Messaging: Gentle messaging showing comparison with peers or selves (also useful for call diversion) 2014 D-15 icfi.ca

72 Insights: Insights into annual electricity and gas usage, ranking versus neighbours or other program participants, trends, average daily electric usage, multi-fuel insights, etc. Savings Potential: Tailored to each individual; total dollar savings from plan, potential percentage savings, potential carbon reduction etc. Personalized Solutions: Measures that apply to the customers home, with information on each Marketing/Outreach Messages: Home upgrades, rebates/incentives, other cross promotional offers, etc. Other Configurable Fields: Such as seasonal tips A sample Home Utility Report is presented in Exhibit E- 16 (following page). Normativecomparative messaging is presented in the upper-most portion of the , together with a prominent estimate of the likely net economic benefit available to the customer if they were to take action. Below this is a presentment of the most rewarding two actions, tailored for that customer, along with the estimated net upside for each of those potential actions. The customer is invited to engage over the web to receive the remaining potential actions most likely to yield results, and review and adjust the information used in developing their customized action plan. Other messaging is also presented on the HUR, including seasonal tips, cross-promoted programs, advertising opportunities and applicable deals and programs. The basic elements of successful normative-comparative instruments are used in our Home Utility Reports. This includes the use of type and white space to train the eye on just a few messages, the careful construction of content to communicate normative-comparative messaging, and the need for repetition and continuity. We work with leading external authorities in behavioral science to ensure that our messaging takes advantage of the latest research to motivate customers to action. Our advisors for the HURs include: Christopher Malloy, Professor, Harvard Business School Matthew Harding, Professor, Duke University Daniel Kammen, Professor, University of California at Berkeley With these professionally recognized experts and highly experienced internal resources in, behavioral science, customer marketing, engineering, economics and software, we have developed a leading-edge understanding and set of approaches to achieving elevated levels of customer conversion to undertaking action. Despite the need to integrate certain principles in our HURs, there is considerable flexibility to allow for brand communication and to drive specific calls-to-action beyond generalized tips and advice. With this in mind, we will make a number of templates available to Welland Hydro and we will work together to ensure that the Home Utility Reports meet the utility s needs D-16 icfi.ca

73 Exhibit E- 16 Example Home Utility Report 2014 D-17 icfi.ca

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