Energy Star Homes Program Oncor Group

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1 Program Synopsis The goal of Oncor s ENERGY STAR New Homes Program is to support Oncor s overall efforts to meet the energy efficiency goal mandated by SB 7 (1999), the act which enabled retail electric competition in Texas. Part of SB 7 required distribution utilities to achieve a annual energy efficiency goal equal to 10% of the yearly growth in peak demand. Achievement of the goal is measured by reduction in summer peak demand. The programs that can be utilized to achieve the goal are standard-offer programs and market transformation programs. The ENERGY STAR New Home Program is one of several program templates that were pre-approved by the Public Utility Commission of Texas. Oncor selected this program for implementation because of the high level of residential construction activity in the service territory, the significant opportunities for increased efficiency levels in residential new construction, prior experience in implementing new construction programs, and the marketing potential of ENERGY STAR. The objective of the program is to transform residential construction practices in the Oncor service area, and to achieve significant reduction in summer peak demand and annual energy consumption. The program provides incentives for builders to produce ENERGY STAR - rated single-family homes. The program budget includes incentives to builders, marketing, advertising, training and support for HERS raters, and measurement and verification. (No direct incentives are provided to end-users.) Compared with conventional homes, ENERGY STAR homes typically have: more efficient HVAC systems; tighter duct systems and building envelopes; and more efficient windows. In 2002, 6500 homes were built, with an average impact of 3800 kwh and 1.14 kw per home. The 6500 homes built in 2002 represented a market share of approximately 17%. Program Type Incentive PrescriptiveRebates CustomIncentivesSPC BillCreditsRateDiscounts Services DirectInstallation FinancingLoansLeasing FreeMeasures InHousePlusSubs IncentiveOther Information and Training GeneralEducation MailAudit TelephoneAudit OnSiteAudit OnLineAudit DesignAssistance FeasibilityStudies EndUserTraining TradeAllyTraining Program Focus Primary Market Events Targeted AllMarketEventsTargeted NewConstructionRenovation ExistingConstructionAll ExistingConstructionRetrofit Primary Program Focus EndUser SupplySide EndUserAndSupplySide - 1

2 ExistingConstructionNaturalReplac ExistingConstructionEarlyRetire Residential End User Target Markets ResidentialALL SingleFamily MultiFamily MobileHome LowIncome ResOther Commercial/Industrial End User Markets Commercial All Offices Retail Restaurant Public (govt.) Facilities Grocery Store Health Care Education Lodging (Hotels/Motels) Warehouses Industrial All Other Market Barriers End User Supply Side Information or Search Costs Performance Uncertainties Asymmetric Information and Opportunism Hassle or Transaction Costs Hidden Costs - 2

3 Misplaced or Split Incentives Product or Service Unavailability Externalities Non-Externality Pricing Inseparability of Product Features Access to Financing Bounded Rationality Organizational Practices or Customs Irreversibility Other End User Other Supply Side Supply Side Actors Targeted SupplySideActorNotProgFocus AorEFirms Manufacturers Realtors Developers Builders Contractors TradeAssociations WholesalersDistributors Retailers EnergyServiceCompanies NonProfitNotForProfitGroups Govt Other Types of measure/end use technologies ALL MEASURES HVAC High Efficiency DX/HP High Efficiency Chillers High Efficiency Room/Terminal Economizers Lighting Compact Fluorescents Electronic Ballasts Reflector Systems Efficient Fluorescent Lamps (T-8, T-5, etc.) - 3

4 Control Systems Variable Speed Drives Occupancy Sensors Duct Sealing and Balancing Equipment Testing/Tune-up Commissioning Retro-commissioning Space Heating Heat Pump Water Heating Load Control (Cycling) High Efficiency Insulation Blankets Low-Flow Showerheads Low-Flow Aerators Solar Assisted Motors High Efficiency Variable Speed Drives Industrial Process Compressed Air Motors Lighting Controls Occupancy Sensors High Intensity Discharge Day lighting Applicances Refrigerators Dish Washers Clothes Washers Clothes Dryers Office Equipment Plug Load Building Envelope Insulation Infiltration Control Glazing and Glazing Control Windows Refrigeration High Efficiency Controls - 4

5 Pumps Variable Speed Compressors Multi-Stage Compressors Commissioning Other (specify) Program Context The program is past the initial implementation stages, but not yet a mature program. In its growth phase. Energy efficiency goal is mandated by SB 7 (1999), the act which enabled retail electric competition in Texas. Program Components Program Management The program had a very fast ramp-up, partly due to market conditions. Implementing Organization Utility Nonprofit Govt Private IOOther Implementation Structure InHouse TurnkeyContractor InHouseAndSubcontractors Other Reporting and Tracking In 2002, the database included actual homes built and completed. Key program metrics are number of homes, kw per home, kwh per home, total kw and kwh. For the program s public web site, traffic is monitored. EPA and the Texas Commission on Environmental Quality (TCEQ) use the number of ENERGY STAR homes built to evaluate air emission impacts, the Public Utility Commission of Texas uses the kw savings to evaluate progress toward achieving energy efficiency goals, and builders use information on the numbers of homes sold. Internetbased interactive databases are used for tracking. Verification and Quality Control HERS raters certify the rating of ENERGY STAR homes, and another contractor performs spot checks to independently validate the HERS raters ratings. Aside from the inspection and verification process, feedback is provided to the builders by the raters, and to the raters by the contractor providing the verification of the ratings. Participation Process - 5

6 Oncor or the implementation contractor identifies key builders and invites them to outreach events. Builders submit an application, and if accepted, execute an EPA Energy Star Partnership Agreement. Builders commit to producing homes to Home Energy Rating System (HERS) specifications or Builder Option Package (BOP) specifications, and they hire a home energy Rater to help incorporate the measures into the home design. When the homes have been fully constructed, their energy performance must be verified by the third party representative who helped determine the home's energy-efficiency features (i.e., the HERS Rater or BOP Verifier). Raters perform an on-site inspection of a sample of the home models to gather data and to verify energy-efficiency features, air leakage, and duct tightness. Builders must notify CNP before any of these site inspections are to occur, so CNP can choose whether or not to monitor any of these inspections. If the house achieves ENERGY STAR status, the ratings provider must submit the home's rating information to EPA in order for the home to be labeled as ENERGY STAR. Builders then obtain and ENERGY STAR certificates from Raters. Builders then submit requests for payment to CNP, along with required documentation. Outreach, Marketing and Advertising Oncor utilizes primarily radio and newspaper ads to reach its target audience. Key target demographic is female homeowners, age Program outreach strategies also include outdoor ads, weekly radio talk show. Program targets builders through direct outreach. Installation and Delivery In general, annual goals have been met. The incentive is $250 per home, and is based on perhome impacts and allowable avoided costs and customer-class incentive caps. The key elements to successful implementation are a well-designed database, and an effective advertising/marketing campaign. Program Evaluation Evaluation activities have included baseline studies, program energy savings, contractor performance, and marketing plan effectiveness. Outside contractors were primarily used to conduct these evaluations. Evaluation is a continual process, and has been used to modify the implementation plan. In particular, the advertising plan was modified extensively as a result of Oncor s evaluation. Quantitative Data Program Year: Jan 2002 to Dec 2002 Participation rate is available Cost Breakdown is available Net Savings Breakdown is available Net-to-Gross is available Total Resource Cost Data is available Quantative Data Summary: - 6

7 Participation is measured by the number of ENERGY STAR certified new homes built in the Oncor service territory. In 2002, 6500 Energy Star homes represented a market share of 17%. Data on participation rates, savings and budgets are readily obtainable. Cost-effectiveness tests, such as TRC are no longer used to evaluate programs. The primary method for obtaining energy efficiency is through standard offer programs, with incentive maximums determined by avoided energy and capacity costs, limited by incentive caps. Non-electric energy savings are not evaluated. Market transformation programs such as this cannot have program expenses which exceed program savings multiplied by the applicable avoided costs. List Of Key Sources Forbes, Ashley State Implementation Plans: Energy Efficiency Update. Austin, Texas: Texas Commission on Environmental Quality Texas Web site. Residential Energy Service Network RESNET Program Web site. U. S. Environmental Protection Agency Energy Star Program Web site Oncor Energy Efficiency Plan ENERGY STAR New Home Market Transformation Program Contact Information Name Title Company Phone Steve Ellison Program Manager (214) Ext. SELLISO1@oncorgroup.com - 7