MEEA Policy Webinar: Midwest Perspective of the ACEEE 2011 State Energy Efficiency Scorecard

The 2011 State Energy

Efficiency Scorecard

MEEA Webinar – November 17, 2011

Michael Sciortino

The American Council for an Energy-Efficient Economy (ACEEE)

• Nonprofit 501(c)(3) dedicated to advancing energy efficiency through research, communications, and conferences.

• ~40 staff in Washington DC, + field offices in DE, IL, MI, and WI.

• Focus on End-Use Efficiency in Industry, Buildings, Utilities, and Transportation; Economic Analysis & Human Behavior; and State & National Policy

• Funding:

• Foundations (34%)

• Federal & State Grants (7%)

• Specific Contract work (21%)

• Conferences and Publications (34%)

• Contributions and Other (4%)

Overview

• Methodology

• Results

• Major Developments in and outside the

Midwest

• Breaking down the Midwest Scores

Policy Maximum Score

1. Utility and Public Benefits Programs and Policies 20

Electricity Efficiency Program Budgets 5

Natural Gas Efficiency Program Budgets 3

Annual Savings from Electricity Efficiency Programs 5

Targets (Energy Efficiency Resource Standards) 4

Performance Incentives/Alternative Regulatory Business Models 3

2. Transportation Policies 9

Integration of Transportation and Land Use Planning; VMT

Targets; Complete Streets Legislation 5

GHG Tailpipe Emission Standards 2

Transit Funding 1

High-Efficiency Vehicle Consumer Incentives 1

Methodology, part 1

Methodology, Continued

Policy Maximum Score

3. Building Energy Codes 7

Level of Stringency 5

Enforcement/Compliance 2

4. Combined Heat and Power 5

Interconnection Standards

Standby Rates

Incentives for CHP

Output-based Emissions Regulations

CHP in EERS or RPS

Net Metering

5. State Government Initiatives 7

Financial and Information Incentives 3

Lead by Example in State Facilities and Fleets 2

Research, Development, and Demonstration 2

6. Appliance and Equipment Efficiency Standards

2

Maximum Total Score 50

The 2011 Scorecard Rankings

Most Improved States

Key Findings and Major Developments

• Massachusetts: #1

• General upward trend among all states

• ~30 states with stringent building codes

• EE remains a bi-partisan solution

• 24 states with an EERS

• States implementing EERS policies moving ahead

• Total utility budgets for EE at $5.5 billion

• Electricity savings of 13,147 GWh in 2009

• Major gap in states advancing efficient transportation

policies

Trends in Utility-Sector EE

Program Spending/Budgets

Electricity DSM Budgets

2009 vs. 2010

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

Bu

dge

ts a

s %

of

Re

ven

ue

s

2010 Budgets as % of Revenues

2009 Budgets as % of Revenues

Electricity Savings 2008 vs. 2009

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

Sa

vin

gs

as

% o

f R

eta

il S

ale

s

2009 Savings as % of Retail Sales

2008 Savings as % of Retail Sales

Rank State

Utility and

Public

Benefits

Programs

and

Policies

Transportation

Policies

Building

Energy

Codes

Combined

Heat &

Power

State

Government

Initiatives

Appliance

Efficiency

Standards

TOTAL

SCORE

Change in

rank from

2010

Change in

score From

2010

Maximum Score 20 9 7 5 7 2 50

8 Minnesota 18 2 4 3 6 0 33 0 5

11 Iowa 14 1 5 2 5 0 27 1 2.5

16 Wisconsin 11.5 1 5 4 3.5 0 25 -5 -1

17 Illinois 9 3 5 4 3.5 0 24.5 8 6

17 Michigan 10 2 4.5 3 5 0 24.5 10 7

24 Ohio 8.5 0 4 5 4.5 0 22 3 4.5

32 Indiana 6.5 0 4 3 3.5 0 17 -1 0.5

37 Kentucky 3.5 0 4.5 1 3 0 12 -1 1.5

40 Nebraska 1.5 0 5 1 2.5 0 10 7 6

42 South Dakota 4.5 0 0 3 2 0 9.5 -3 0

44 Missouri 2.5 0 2 1 3 0 8.5 -1 2.5

48 Kansas 1 0 1.5 1 2 0 5.5 -2 0.5

51 North Dakota 0 1 0 1 0.5 0 2.5 0 1

Midwest States in the Scorecard

Some other Best Practices -

Transportation

State

GHG Tailpipe

Emissions

Standards

Integration of

Transportation

and Land Use

Planning VMT Targets

Complete

Streets

Legislation

Transit

Funding

High-

Efficiency

Vehicle

Consumer

Incentives Score

Maximum

Score 2 2 2 1 1 1 9

Maryland 2 2 1 0 1 1 7

Looking ahead to 2012

• Continued improvement in EERS states

• Sour economy’s impact on customer

participation

• Political climate

Thank you for joining!

Michael Sciortino

202-507-4028

[email protected]

Pat Quinn

Governor

www.ilenergynow.org

Warren Ribley

Director

Illinois Energy Now, formerly known as the Energy Efficiency

Portfolio Standard, is the Department of Commerce &

Economic Opportunity’s program that provides public sector

customers with financial incentives to make energy

improvements.

Millions of dollars in funding is available to public sector

organizations through Illinois Energy Now.

Offers public sector organization financial incentives to

upgrade electric and natural gas systems, save energy and

help the environment.

What is Illinois Energy Now?

2007: Legislation amended the Illinois Public Utilities Act and

required the State’s largest utility providers and the

Department of Commerce & Economic Opportunity (DCEO)

to develop a portfolio of electric energy efficiency programs

to meet legislative goals that reduce energy demand.

2009: Legislation was passed to include natural gas energy

efficiency programs to meet legislative reduction goals.

How did Illinois Energy Now get started?

Private Sector

Businesses

Residential

Non-profits

ComEd

Ameren

Nicor

Integrys

Ameren DCEO

Electric Efficiency Electric Efficiency

Gas Efficiency Gas Efficiency

Private Sector

Businesses

Residential

Non-profits

Public Sector

Governments

K-12 schools

Community colleges

Public universities

Low-income

Residential Sector

Affordable housing

PHAs

Implementation

agencies

How is Illinois Energy Now structured?

Local governments

• Municipalities

• Townships & county facilities

Special units of local government

• Library & park districts

• Public safety

• Water reclamation districts

State and federal agencies

Public schools

• K-12 Public schools

• Public community colleges

• Public universities

Privately-owned businesses

Privately-owned industrial &

commercial facilities

Private schools

• Private K-12 schools

• Private colleges

• Private universities

Not-for-profit

• Museums

• Foundations

• Trade Organizations

Residential

PUBLIC SECTOR - DCEO ELECTRIC & GAS UTILITIES

How is Illinois Energy Now structured?

Funded by a System Benefits Charge on utility customers’

monthly utility bill. Not by tax dollars.

Direct Benefit:

• Each $1 spent on energy efficiency saves $2-4

Indirect Benefits:

• Downward pressure on energy prices

• Consumers have more money to spend in the economy

• Increased jobs to meet economic stimulation

How is Illinois Energy Now funded?

Year Electric Natural Gas

2011 $54 million $15 million

2012 $55 million $22 million

2013 $55 million $30 million

What is the IEN estimated budget?

Local Govt. 49%

K-12 Schools 23%

Community College

5%

University 16%

State 1%

Federal 6%

Who has received IEN incentives?

Custom HVAC 1% Custom

Other 18% Custom

Exterior Lighting

1%

Custom Lighting

11%

Standard Lighting

66%

Standard HVAC

3%

Where do electric savings come from?

Public Sector Load Reduction

0.20%

0.40%

0.60%

0.42%

0.80%

1.05%

0.23%

0.51%

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

2009 2010 2011

annual energy savings goal

public sector gross savings

public sector savings

• DCEO continues to exceed the legislative goals with its

public sector programs

• Additional savings from Market Transformation

Energy Efficient Building Act

Public Act 096-0778 was signed into law on August 28,

2009 amending the Energy Efficient Commercial

Building Act by including residential buildings which

became effective January 29, 2010.

Requires all new commercial and residential

construction to follow a comprehensive statewide

energy conservation code. Renovations, alterations,

additions, and repairs to most existing commercial and

residential buildings must follow the Illinois Energy

Conservation Code.

Programs to train students and the building

industry as well as to enhance the capacity of

efficiency service providers, in order to meet long-

term Program goals and includes:

Building Industry Training &

Education

1. Commercial & residential green building

practices

2. Building code and beyond code training

3. Building Operator Certification

(www.boccentral.org)

4. Illinois Home Performance with Energy Star

5. Trade Ally Network support and training

Contact

Agnes Mrozowski

Assistant Deputy Director

Illinois Energy Office

217.524.0933

[email protected]

Or Visit

www.ilenergynow.org

To Learn More about Illinois Energy Now

Michigan Public Service Commission

Robert G. Ozar, PE

Manager, Energy Efficiency

Electric Reliability Division

November 17, 2011

Midwest Energy Efficiency Alliance

ACEEE State EE Scorecard Webinar

Overview of PA 295

• Michigan’s Public Act 295 was signed into law on October 8, 2008.

• PA 295 is part of a comprehensive energy package promoting private investment in renewable energy and energy efficiency.

• “The overall goal of an energy optimization plan shall be to reduce the future costs of provider service to customers. In particular, an EO plan shall be designed to delay the need for constructing new electric generation facilities…”

• The Act sets very specific administrative procedures and standards.

Overview of PA 295 (cont.)

• 65 utilities in Michigan are required to file energy efficiency plans. The Act calls such plans “Energy Optimization” (EO) plans.

• Targets are based on percentage reductions in retail sales. The Act does not set standards for electric peak reductions nor is power factor recognized as contributing to electric generation demand.

• Electric utility targets ramp to 1% of retail sales in 2012, gas utility targets ramp to 0.5%.

EO Plan Design

• Most plans divide customers into two customer groups: residential, and commercial/industrial (C&I). In addition, about 10% of the total budget is directed toward residential low-income programs.

• C&I programs generally consist of two foundational programs: (1) prescriptive rebates; and (2) custom incentives, $/kWh.

• PA 295 limits education spending to 3% of budget and pilot programs to 5% of budget.

Spending: The statewide three-year cumulative funding level for Energy

Optimization programs in Michigan is $410,541,330. The three-year cumulative

funding level can be divided into three categories: $161,597,672 for residential

(excluding low-income) programs, $171,362,521 for commercial and industrial

programs, and $58,158,540 for low income programs.

Financial Incentive Mechanism Maximum at 115% of Target : 15% of Spending

Utility Incentive Amount % of Target Met

Consumers Energy (Electric) $5,076,731 141%

Consumers Energy (Gas)

$3,407,064 126%

Detroit Edison

$6,200,000 177%

Michigan Consolidated Gas

$2,400,000 196%

2009-2011 Low Income Funds

$58,158,540

Low Income EO Funds

CE Electric $5,918,889

DTE $10,761,250

Electric IOUs $1,056,804

Cooperatives $921,044

Municipals 1,017,871

CE Gas 24,335,558

MichCon $12,110,000

IOU Gas 2,037,124

Total $58,158,540

Energy Efficiency

Financing Program

Loans Approved 402

Loan Approval Rate 56%

Loans Closed 168

Average Loan Size Approved $7,398

Average Credit Score Approved 747

Authorized Contractors State-wide 210

Total Loan Value Issues $1,143,341

Average Electric Savings* 808kWh/year

Average Natural Gas Savings* 230 CCf/year

Average Utility Bill Savings* $389/year

Michigan C&I Success Story:

Consumers Energy

• $8.6 million in incentives so far this year to help nearly 1,700 Michigan businesses.

• Reducing energy costs by $9.1 million per year over projects lifecycles.

• Saving 81,629,805 kWh of electricity and 121,239 Mcf of natural gas annually.

• That’s enough electricity to serve about 9,070 residential customers, and enough natural gas to serve more than 1,080 residential customers.

Consumers Energy C & I Program 2009-2010

$9,960,000,

57%

$7,610,000,

43% Commercial

Industrial

C&I Split for Consumers Energy

General Motors Corporation

Incentive from Consumers Energy

• Awarded $97,000 to Flint’s GM Plant for

Lighting Upgrades.

MICHIGAN TURKEY PRODUCERS CO-OP INC.

Incentive from Consumers Energy

• 4.5 Million birds

processed per year

• $180,000 in rebates from

Consumers

• Installed and replaced

lighting in building.

• Improved efficiency and

improved working

conditions and made it

easier for workers to spot

defects while working.

Jerry S. Mendoza/Associated Press General Motors' Orion Assembly plant in Lake Orion, Mich.

General Motors

Incentive from Detroit Edison

The plant project involved replacing 2,610 high-intensity discharge 465

watt fixtures to a six lamp T8 fluorescent fixture using 235 watts. Following

installation of the lighting upgrades, DTE Energy presented the plant with

an incentive rebate of $150,000.

General Motors/Orion Assembly

Incentive from Detroit Edison

Industrial Sector EE

Shortcomings • Persistent energy cost control is heavily

dependant upon whole system design, not isolated components – EE programs tend to focus on isolated

components e.g. lighting

• Issue analogous to residential “whole house” approach vs. ala carte

• Program implementation adverse to ESCO performance contracting model

• Deep energy savings lost: lighting pays for everything else

• Difficult to go back

Industry Sector Perspectives

• Disconnect between industry lobbyists and plant managers. – Executive management insists that in order to be competitive

they aggressively pursue all economic EE measures, and therefore do not need mandatory programs (public benefits fund).

– Plant managers say they are not doing all economic EE measures - have projects in mind but can’t get funding

• Severe financial pressure on industrial sector – Unprecedented number of plant closings in Michigan

– Declining asset value

– Shrinking capital renewal allowances

– Expensive financial models to evaluate high-performing technology

– Short ROI desired

Regulatory Compromise

• PA 295 compromise: Formal self-directed energy efficiency program vis-à-vis pure opt out – Assumes that industry does in fact pursue energy

efficiency on their own

– Self-directed customers exempt from paying public benefits charge (except for low-income)

– Must file brief application and biennial report

– Limited enforcement, but PSC authority to order penalties for non-compliance.

– Customer targets are identical to utility targets. For example, the 2012, 2013, 2014, and 2015 utility targets are 1% each year.

Self-directed EO Program Results

Provider 2009

Customers

2010

Customers

2011

Customers

2009

reported

load

reduction

(MWh)

2010

reported

load

reduction

(MWh)

2011

expected

load

reduction

(MWh)

Detroit Edison 26 26 13 12,486 18,488 7,834

Consumers 30 30 16 8,515 12,343 5,648

State

Administrator 9 11 10 5,196 14,568 21,476

Cooperative 3 3 4 899 1,498 562

Municipal 9 9 4 2,006 3,343 606

Total 77 79 47 29,102 50,240 36,126

Midwestern Energy Efficiency

Update

Increasing EE investment through

codes and energy efficiency

policies

Residential Building Energy Code

Adoption in the Midwest As of September 2011

* *

No Mandatory

Statewide Code

Code Level / Equivalence

Pre-2000 Code

2000 IECC

2003 IECC

2006 IECC

2009 IECC

2009 Adopted by Major

Municipality

* In Process to 2009

Commercial Building Energy Code

Adoption in the Midwest

No Mandatory

Statewide Code

Code Level / Equivalence

Pre-1999 Code

90.1-1999

90.-2001

90.1-2004

90.1-2007

90.1-2007 Adopted by

Major Municipality

As of September 2011

Energy Efficiency Policies in the Midwest

2.0% by 2015

2.0% by 2019

1.4% current 1.0%

by 2012

1.5% current

2.0% by 2019

0.63% current

1.5% by 2017

1.0% current

0.75% by 2012

1.5% current

0.48% current

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

Illin

ois

India

na

Iow

a

Kansas

Kentu

cky

Mic

hig

an

Min

nesota

Mis

souri

Nebra

ska

No

rth D

akota

Ohio

Sou

th D

akota

Wis

consin

January 2011

Electricity Natural Gas

Future Midwest Efficiency Targets and Funding

2010 $1.06 billion

2015 $1.58 billion

2010 EE funding

2015 EE funding

(projected)

Sept 2011

Illinois 2% elec by 2015

1.5% gas by 2017

Iowa 1.4% elec currently

1% gas currently

Wisconsin 0.63% elec currently

0.48% gas currently Michigan 1% elec by 2012

0.75% gas by 2012

Ohio 2% elec by 2019

gas in discussion

Indiana 2% elec by 2019

gas none yet

Minnesota 1.5% elec current

1.5% gas current

Missouri IRP process

Kentucky Voluntary elec and gas

Discussion - Questions?

• What resources can MEEA or ACEEE provide

to assist other states?

• Are there programs that you want to learn

more about?

• We will be highlighting many programs – utility

and statewide – at the 2012 Midwest Energy

Solutions conference

– MEEAs Board has set aside travel funds for SEOs,

legislators & staff, Commissioner & staff and

nonprofit organizations to attend

Thank you!

Stacey Paradis, Deputy Director

312-784-7267

[email protected]

www.mwalliance.org