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Texas Large Commercial and Industrial Standard
Offer Program
Brown Bag Teleconference
May 23, 2003
1
Overview of Today’s Topic
Over $20 million in incentive funds remain available for qualifying energy efficiency projects through Texas’ Large Commercial and Industrial Standard Offer Programs!
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Outline Brief overview
– Jay Zarnikau, Frontier Associates LLC Waltz Across Texas
– An Introduction to each of the service areas by program managers at each of the utilities
Project Sponsor Eligibility– Billy Berny, AEP
Eligible Measures– Doug Maxey, Xcel Energy
3
Outline cont. Application Process
– George Smith, CenterPoint Energy Measurement and Verification
– Mike Stockard, Oncor Example Incentive Calculations
– Karen Radosevich, Entergy
4
TEXASElectric Retail Service Area Map
Investor-Owned Utilities
Legend
AEP Texas Central Company (AEP - Central)El Paso Electric Company (EPE)Entergy Gulf States, Inc. (EGS)CenterPoint Energy (CenterPoint)Xcel Energy (Xcel)AEP Southwestern Electric Power Company (SWEPCO)Texas-New Mexico Power Company (TNMP)Oncor (Oncor)AEP Texas North Company (AEP - North)
EPE
Oncor
TNMP
Xcel
CenterPoint
SWEPCOOncor
TNMP
EGS
WTU
TNMP
Xcel
AEP-North
AEP-North
AEP-North
AEP-Central
April 20035
Entergy - Gulf States, Inc.
Karen RadosevichKaren Radosevich
6
Entergy - Gulf States, Inc.
Serves 350,000 customers in Southeast Texas
Industrial (Beaumont & Port Arthur)
Residential (The Woodlands & Conroe)
Goals and Budget
Goal 2003 Budget Remaining Funds
3.1 MW $ 1,305,940 $ 1,239,549
Contact Information: Terry Swan (409) 981-3245 [email protected]
7
Xcel Energy
Doug MaxeyDoug Maxey
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Xcel Energy Serve 269,000 customers on the high plains of Texas
– Amarillo - Lubbock
Goals and Budget
Goal 2003 Budget Remaining Funds
3.1 MW $ 1,305,940 $ 1,239,549
Contact Information: 806-378-2887 [email protected]
9
Texas-New Mexico Power
Tony ThompsonTony Thompson
10
Texas-New Mexico Power Goals and Budgets
Goal 2003 Budget Remaining Funds
0.64 MW $ 240,000 $ 192,000
Contact Information: 817-377-5579 [email protected]
AMERICAN ELECTRIC POWER
Billy BernyBilly Berny
AEP TEXAS CENTRAL
AEP TEXAS NORTH
AEP SWEPCO
AMERICAN ELECTRIC
POWER
12
American Electric Power Program Incentive Budgets
Go to www.aepefficiency.com for program details and application
procedures.
FOR MORE INFO...
Total Incentive Budget Available Funds as of April 28, 2003based on approved Contracts
AEP - Texas Central $ 2,587,279 $ 2,083,621 AEP – SWEPCO $ 589,500 $ 589,500 AEP - Texas North $ 596,841 $ 596,841
$ 3,773,620 $ 3,269,962
Contact Information: 325-674-7293 [email protected]
13
CenterPoint Energy
George SmithGeorge Smith
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CenterPoint Energy Statistics
Houston metropolitan area 1.8 million customers System peak demand of 15,000 MW Cities: Houston, Galveston, Baytown,
Richmond/Rosenberg Load is 40% residential, 30% commercial, 30%
industrial
15
CenterPoint Goals and Budgets
Goal 2003 Budget Remaining Funds
10.2 MW $ 6,252,000 $ 2,600,000
Contact Information: 713-207-3488 [email protected]
16
Oncor
Mike StockardMike Stockard
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Oncor Service Area Statistics
Provides distribution service to 2.64 million premises.
Provides distribution service to 370 cities in 92
counties.
Serves: Dallas, Fort Worth, Tyler, Waco, Midland,
Odessa, Lufkin, Temple, Round Rock
Peak system demand of 22,000 MW
2004 Incentive Budget - $ 17.3 million
Contact Information: 214-486-5626 [email protected]
AEP - www.aepefficiency.com
Entergy - www.ENTERGYefficiency.com
Oncor - www.oncorgroup.com/efficiency
CenterPoint - centerpointefficiency.com
Texas-New Mexico Power - www.tnpeefficiency.com
Xcel Energy - www.Xcelenergyefficiency.com
Websites for Specific Utilities
19
Quick Overview
Jay ZarnikauJay Zarnikau
Frontier Associates LLC
20
Background and Introduction
Texas Senate Bill 7 requires distribution utilities in Texas to meet 107 of their load growth by offering and administering energy efficiency programs.
Each of the States affected distribution utilities offer a Large Commercial and Industrial Standard Offer Program to help satisfy this goal.
The legislation requires incentive programs to be market neutral and non-discriminatory, so the C&I Standard Offer Program is available to all of the utilities distribution customers on a “first come, first served” basis.
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Standard Offer Program Program administrator (electric utility) offers set
incentive payment to participants for each kWh or kW saved through installation and operation of an energy efficiency measure.
Program administrator signs a standard contract with participants outlining their responsibilities under the program.
Applications considered on per-project basis; first-come, first-served.
Number of participants limited only by available incentive dollars.
Project Sponsor and customer determines efficiency measures to be installed—program measure/technology neutral.
Contact Information: 512-372-8778 [email protected]
Project Sponsor Eligibility
Billy BernyBilly Berny
AEP TEXAS CENTRAL
AEP TEXAS NORTH
AEP SWEPCO
AMERICAN ELECTRIC
POWER
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Program Administrator (Utility) Responsibilities
Perform outreach to energy services community.
Review project applications.
Sign contracts with Project Sponsors.
Perform pre- and post-installation inspections.
Make incentive payments to project sponsors.
Report results to Public Utility Commission.
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Who Can Be a Project Sponsor?
Equipment distributors or manufacturers
Energy service companies
Community based organizations
Mechanical or lighting contractors
Any other entity providing energy efficiency services
Large commercial or industrial energy consumers
Project sponsors must meet standard qualifications (work experience, financial capability, insurance, proper licensing, etc.)
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Market and sign contracts with individual Utility transmission and distribution customers
Apply for funding from program Sign Standard Agreement with Utility Design, procure, and install energy efficiency
measures Measure and verify energy savings
Sponsor Responsibilities
26
Participants must have the following: Evidence of good credit rating
(10K or Financial Statement) List of references Must hold all applicable licenses Evidence of all building permits Evidence of necessary insurance
Project Sponsor Qualifications
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Eligible Measures
Doug MaxeyDoug Maxey
28
Produces measurable demand and energy savings Retrofit measures, in most cases Useful life is greater than ten years Permanently installed Fuel switching from electric to non-electric only Exceeds minimum efficiency standards
Measure Eligibility
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Constant air volume to VAV conversion Chiller replacement Packaged cooling unit replacement Fan and pump VSD and efficiency projects Lighting efficiency and controls Air cooling and refrigeration compressor projects Industrial process measures
Eligible Measures
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Measures with life less than 10 years Removable measures (generally includes plug
loads) Exterior lighting Cogeneration or self generation (except
renewables) Fuel switching to electric New construction (some exceptions) Measures that require no capital investment Measures that receive incentives from other
Utility programs Thermal energy storage (unless part of a larger
project)
Ineligible Measures
31
Project requirements: Utility T&D customers Total demand at project site(s) is at least 100 kW
Minimum savings per project: 20 kW Similar customers/sites may be aggregated to
meet this requirement
Project Eligibility
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Any number of project sites may be submitted as a project if they are similar. Contingent on having the same:
Sponsor Measure Occupancy schedule Functional use Energy consumption patterns M&V Plan
Project Aggregation
33
Application Process
George SmithGeorge Smith
34
Sponsor submits one Initial Application (IA) per project First IA includes Sponsor qualifications Identifies customers and intended
measures (20 kW savings minimum) Estimated kW/kWh savings and incentive
payments Approximately 15 day review period
Utility reviews the IA for participant and measure eligibility
Upon IA approval, Utility reserves funds for the project for a limited time.
IA
FA
IR
SR
Contract
Initial Application
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Sponsor has up to 100 days from IA approval for submittal of FA (varies by utility)
Information required in the Final Application (FA)• Detailed project description• Savings calculations and incentive estimates• Equipment surveys (use standard forms)• Proposed M&V plan• Site plan and 1-line drawings where applicable• Agreement between Project Sponsor and Host
Customer
IA
FA
IR
SR
Contract
Submittal 2:Final Application
36
One FA submitted per project FA forms available on Web site Utility reviews each FA
• Fulfillment of submittal requirements• Technical review of measure savings and
M&V plan• Utility conducts a pre-installation inspection• Approximately 45 day review
FA approval
IA
FA
IR
SR
Contract
Final Application (cont.)
37
Includes project specific information• Estimated kW & kWh savings and
incentives• Approved M&V plan
Security deposit may be required Installation of approved measures may
proceed after FA approval, after both parties sign the C&I SOP Agreement, and pre-installation inspection is completed
IA
FA
IR
SR
Contract
Agreement(Contract)
38
Due within 30 days of completion for all projects
Submitted information similar to FA, except: Reports actual retrofit equipment installed Updates savings calculations, incentive
estimates and M&V Plan to reflect as-built condition
Includes Host Customer certification that measures were indeed installed
IA
FA
IR
SR
Contract
Submittal 3: Installation Report
39
Utility reviews each Installation Report (IR) Review of final savings estimates and M&V
plan Post-installation inspection to confirm
equipment installation Approximately 45 day review period
Upon IR approval, Utility pays Project Sponsor 40% of contracted incentive
IA
FA
IR
SR
Contract
Installation Report (cont.)
40
Submitted after M&V activities completed Provides actual project kW & kWh savings Submittal will include
Raw data collected in M&V activities Analysis used to calculate savings Actual savings achieved
Review period approximately 45 days Remaining incentive payment based on
actual savings achieved (up to 60% of contracted amount)
IA
FA
IR
SR
Contract
Submittal 4:Savings Report
41
Measurement and Verification
Mike StockardMike Stockard
42
Measure-specific M&V guidelines Stipulated values for data such as operating hours,
fixture wattages and equipment efficiencies Pre-derived savings calculations for some
measures Minimize project sponsor M&V costs and utility
administration, while producing justifiable energy savings
Streamlined M&V Procedures
43
Appropriate M&V Approach depends mainly on:– Type of retrofit and equipment– Operational predictability– Project complexity
Main categories of M&V for C&I program:– Deemed savings (in select applications)– Simplified M&V methods– Full M&V methods– Alternate M&V methods may be proposed by
Sponsor, but must adhere to IPMVP and be approved by Utility
C&I Program M&V
44
Connected Lighting Load (kW) Usage Group
Survey Lines Existing Proposed Difference
Stipulated Operating Hours
Annual kWh Savings
Hallways/Stairs 5 0.9 0.5 0.4 3,760 1,504
Common Offices 18 16.5 3.6 12.9 3,760 48,504
Conference Rooms 5 3.9 2.4 1.5 3,760 5,640
Misc. Facilities 6 1.5 1.2 0.3 3,760 1,128
Private Offices 11 14.8 10.3 4.5 3,760 16,920
Restrooms 5 1.0 0.7 0.3 3,760 1,128
TOTAL 50 38.6 18.7 19.9 74,824
Simplified Lighting Example Typical Small Office Building
Sponsor submits full lighting survey, detailing existing and proposed fixtures
3,760 stipulated operating hours for office buildings 80% coincidence factor for office buildings
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Savings Calculations
Lighting Demand Savings: 38.6 kW – 18.7 kW = 19.9 kW Interactive Demand Savings: 19.9 kW * 0.10 = 2.0 kW
Total Demand Savings: (19.9 kW + 2.0 kW) * 0.80 = 17.7 kW
Lighting Energy Savings: 19.9 kW * 3,760 hrs = 74,824 kWh
Interactive Energy Savings: 74,824 kWh * 0.05 = 3,741 kWh
Total Demand Savings: 74,824 kWh + 3,741 kWh = 78,565 kWh
Simplified Lighting Example (cont.)
46
Chiller Replacement in Office Building
Retrofit Description: 1-for-1 300 Ton Water-Cooled Centrifugal Chiller Replacement
Existing Chiller Efficiency: COP=5.0 (0.70 kW/ton)
New Chiller Efficiency: COP=6.6 (0.53 kW/ton)
Baseline Chiller Efficiency (ASHRAE 90.1-1989):
COP=5.2 (0.68 kW/ton)
Spot kW measurement of existing chiller at peak conditions:
135 kW
12-months post-retrofit measured chiller kWh:
334,200 kWh
Simplified Cooling Example
47
Savings Calculations
1
ratedbaseCOPnewCOP
metered-postkWh (kWh) SavingsEnergy *
kWh 89,977 1* kWh 334,200 (kWh) SavingsEnergy 5.26.6
1
ratedbaseCOPnewCOP
metered-prekW (kW) Savings Demand *
kW 36.0 1* kW 135 (kW) Savings Demand5.26.6
Simplified Cooling Example (cont.)
48
Baseline must account for minimum state and federal standards
Standard forms must be used M&V reports must be complete and properly
documented before any payments will be made “Service quality” must be maintained
For example - lighting levels Metering
Calibration required All collected data must be submitted with
reports Must be adequate to capture full range of
operating conditions
General M&V Rules
49
Example Incentive Calculations
Karen RadosevichKaren Radosevich
50
Pricing for programs is based on a cost effectiveness
standard Based on avoided cost of a new gas turbine:
– $400 per kW capacity– 2.5 cents per kWh off-peak energy
Incentives for large commercial and industrial projects can be up to 35% of avoided cost.
Incentives vary by utility:– $150 to $200 per kW reduction– 5.0 to 6.9 cents per annual kWh saved
Lighting Cap -- kW and kWh savings derived from lighting measures are capped at 65% of the total savings.
Load Factor Cap -- Utilities may place a limit on the ratio of kWh payment to kW payment.
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Example 1 - Simple Calculation
A commercial HVAC project saves 25 kW of summer peak demand and 50,000 annual kWh.
25 kW x $175/kW + 50,000 kWh x $0.06/kWh = $7,375
52
Example 2 -- Load Factor Cap
An industrial variable-speed motor retrofit saves 20 kW of summer peak demand and 150,000 annual kWh. The unadjusted incentive payment for this project would be:
(20 x$175) + (150,000 x $0.06) = $12,500
The utility is utilizing a load factor cap that limits combined kW and kWh payment to $600 per kW.
20 x $600 = $12,000
This project would be subject to the load factor cap. Incentive would not exceed $12,000.
53
Example 3 - Lighting Cap
A commercial office project saves 15 kW and 60,000 kWh from lighting measures and 4 kW and 8,000 from HVAC.
% of kW savings from lighting = 15/19 = 79%% of kWh savings from lighting = 60,000/68,000=88%
Adjusted kW = (19 x 0.65) + 4 = 16.35 kWAdjusted kWh = (68,000 x 0.65) + 8,000 = 52,200 kWh
(16.35 x $175) + (52,200 x $0.06) = $5,993
54
In conclusion… A new generation of energy efficiency programs
are up and running.
For energy services companies, equipment distributors and manufacturers, installers of energy-efficient equipment, and others, these programs provide new business opportunities.
The state’s utilities and the PUCT are counting on your ideas and efforts to help ensure that we meet our goal for energy efficiency!
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Questions?
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