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EXECUTIVE SUMMARY

San Diego Gas & Electric’s Commercial Lighting Retrofit program is one of the most unique and successful programs of its kind in the country. Not only is an unusual sales commission arrangement used to stimulate participation in the program, but the program has exceeded its targets for savings for each of the three years that it has been implemented. Analysts at SDG&E believe this success has been a direct result of the sales commissions paid. Lighting representatives are provided a base salary and then are eligible for a two-tiered commission based on their success. Furthermore, dissatisfied customers cost these reps money, as they have to repay twice the value of their commission on the job as a penalty.

In terms of program expenditures, the Commercial Lighting Retrofit program is SDG&E’s largest program. In 1992 SDG&E spent approximately 1/3 of its total electric DSM budget on the program. As a result the program captured 44% of all electric DSM energy savings and 33% of all electric DSM capacity savings for the utility for the year.

The program also is unique in terms of the measures for which incentives are available. SDG&E offers commercial customers cash incentives for two, four, and eight foot fluorescent fixtures (which include lamps, ballasts, and optical reflectors) but the program has also convinced many customers to change out all of their interior lighting equipment for more efficient measures at the same time. SDG&E tries to sell the customer on retrofitting the entire lighting system by providing lighting recommendations and economic calculations for all lighting systems, regardless of type. Thus SDG&E tries to avoid having to perform a second retrofit. In a sense, the program incentives for select lighting efficiency measures leverage more comprehensive lighting energy savings, effectively foreclosing the lost opportunity of the retrofits’ potentials. SDG&E will pay incentives for other "custom" measures which are determined to be cost effective and which are based on proven customer savings.

SDG&E conducts a custom bidding process for each job using a pool of precertified contractors who actually perform the retrofits. Through this fixed-price bidding process, SDG&E estimates that lighting retrofit costs are reduced by about 30% for each job. If customers elect to use their own contractors, the job must be initially surveyed by a SDG&E lighting representative, and then the job must meet performance standards before a rebate check is written. Typically the rebate pays for 50% of the total retrofit cost. Because of the different building sizes participating in the program, incentive payments have ranged from $3,000 to $500,000. With the SDG&E incentive, customer payback averages about one year for program measures.

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EXECUTIVE SUMMARY

Florida Power Corporation (FPC) is one of the leading utilities in the United States in regard to load management. In fact, approximately 490,000 of the utility’s residential customers participate in FPC’s Residential Load Management program, making it the largest residential load management program in the United States. Given Florida’s reputation for hot weather, it is ironic that FPC is a winter peaking utility, a function of electric resistance space heating. FPC has achieved total winter peak demand savings of over 1,035 MW, with over 700 MW of demand savings resulting from the Residential Load Management program, thanks to the cooperation of its residential customers whose average winter peak demand reduction is calculated to be 1.87 kW per customer.

FPC’s Residential Load Management program began on a full-scale basis in 1982 and is currently offered to all of FPC’s 1,030,000 residential customers who have either an electric centrally-ducted HVAC system, a swimming pool pump, or an electric water heater. FPC pays for the installation of radio controllers on customer appliances and during peak periods FPC automatically turns off the customer’s appliance for specified periods. In return, customers receive a credit on their monthly bill with the amount determined by the appliances enrolled in the program and the interruption schedule chosen. (Between 1982 and 1991 FPC spent approximately $280 million on the program, with 73% going directly to pay for customer credit payments.)

FPC’s sophisticated marketing program is largely responsible for the program’s widespread popularity and success. FPC typifies its customers by variables such as where they live, their income levels, marital status, number of children, etc., and then uses proven marketing strategies particular to that customer type to promote the program. This has resulted in tremendous program participation. Many customers have been enrolled for the entire 11 years that the program has been operating and less than 2% of all participants have dropped out of the program.

In addition to direct mail and bill inserts, FPC uses billboards, advertisements in television, radio, and print media, and telemarketing to market their program. FPC customer service representatives also market the program to customers during day-to-day transactions, such as while signing up a new account, or processing a request for an extension on an overdue bill. One customer service center signed up 6,000 customers in a single year! FPC has also used customer feedback and focus groups to refine the program over time and to modify its marketing strategies and has found that most customers have been attracted to saving money and contributing to environmental health. Thus FPC’s marketing pieces emphasize these benefits with such slogans as "Get Credit for Being Naturally Resourceful," "I’m Happy Saving Money Today, and Energy for Tomorrow," and "Cash in on Energy Management and Save Some Green."

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EXECUTIVE SUMMARY

Portland General Electric (PGE) opened the Energy Resource Center (ERC) in November 1986 with the goal of "turning technology into competitive advantage" for its customers. Approximately 10,000 people have passed through the ERC doors since its opening. The ERC has blossomed into more of a regional center, helping interested commercial & industrial professionals from all over the Northwest. The increased "regionalization" of the ERC is a trend that PGE hopes to aggressively pursue. PGE believes that the ERC has helped the utility become much more directly involved with technology transfer and influencing energy choices. More specifically the ERC has helped PGE better reach its commercial and industrial customers.

The ERC is staffed by the Energy Resource Group (ERG), a collection of five full-time specialists in the fields of: lighting; electrical, mechanical and industrial applications; commercial food facilities; and a wide range of energy information. The capabilities of the ERG include seminars, workshops, classes, market development planning, and on-site technical support and training.

The ERC facility contains a lighting lab, demonstration kitchen, an exhibit area, a technical library, an auditorium, and an electric vehicle center.

In terms of promoting more or less electricity use, the ERC focuses on the needs of each individual customer. If energy efficiency is the top priority for a particular client, then the ERG presents that customer with energy efficiency options. If another customer is best served by a certain electrotechnology, (which might actually increase electricity use) the ERG will recommend that technology. In general, PGE seeks to achieve a balance between energy efficiency and beneficial usage of electricity.

The ERC has an annual operating budget of approximately $1,000,000 (nominal dollars), and PGE spent an estimated $983,083 on initial remodeling costs before opening the facility. In 1991 the ERC began charging for classes and seminars in order to help offset costs and meet the budget.

A major emphasis is placed on offering classes and seminars that are of interest and importance to commercial and industrial professionals. As a result the ERC is constantly examining which classes are popular, which are not, what areas the ERC might not be covering, and which classes or topics the ERC should drop.

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EXECUTIVE SUMMARY

United Power Association’s (UPA) off-peak load management program accounts for the large majority of the utility’s DSM expenditures and savings. The off-peak program formally began in 1980, following participation in a Department of Energy electric thermal storage demonstration project. In 1981, a system-wide load control system was put in place covering 95% of UPA’s service territory using a VHF (very high frequency) one-way radio system to control participating loads. By controlling customer loads UPA is able to shift demand to off-peak hours, reducing peak demand.

UPA controls this system by generating and transmitting signals to keep the related equipment off during the peak periods. The system is comprised of a master controller, transmitters, and receivers. Depending on the system load and the time of day, the master controller instructs the transmitters when to send the appropriate "off" commands to the receivers controlling participating customers’ loads.

Loads eligible to participate in the program include: electric thermal storage space heating, electric thermal storage water heating, dual fuel space heating, interruptible air conditioning, and controlled irrigation. The different eligible loads have different control times assigned to them by UPA. Approximately 98% of the program participants are residential customers.

The off-peak program has flattened out UPA’s load shape very effectively. In 1992, UPA’s load management programs controlled approximately 14% of winter peak demand and 7% of summer peak demand. Program participation is encouraged through lower electricity rates, equipment rebates, and equipment financing. Through 1992 UPA had achieved cumulative winter peak demand reductions of 92 MW and cumulative summer peak demand reductions of 46 MW. In 1992, 5,853 loads joined the off-peak program. UPA controls a grand total of 56,244 loads, with 17.4% of their customers participating in the program.

In 1992, total off-peak program expenditures were $4,843,100. Of this amount UPA contributed $1,533,740 and UPA’s member cooperatives provided $3,309,360. Incentive costs for the year totaled $399,500, advertising costs totaled $55,700, and the remaining expenditures ($4,387,900) went towards administration and implementation. In 1991, UPA spent $1,820,354 on the program and member cooperatives spent $3,426,646, for a program total of $5,247,000.

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