Colorado s Successful Low-income Demand Side Management Programs April 22, 2014
Overview History of Energy Outreach Colorado (EOC) EOC Programs and Funding EOC Efficiency Program Overview and Processes Low-income DSM Enrollment Success Xcel Energy DSM Program Results Case Study Garden Court Apartments Key Factors for Success Concluding Remarks
About Energy Outreach Colorado (EOC) Statewide nonprofit; founded in 1989; created through an Executive Order Mission To ensure all Coloradans have access to affordable home energy. Will raise close to $20 million in 2013-14; 20 staff Since 1989, distributed more than $200 Million to low-income families Programs: Bill Payment Assistance, Energy Efficiency Projects, Efficiency Education, and Advocacy Unique in that we act as an operating foundation of sorts raise funds from utilities and deliver programs for utilities.
Energy Outreach Colorado Programs and Funding Bill Payment Assistance Energy Efficiency Projects Efficiency Education & Advocacy Utility Bill Check off Programs Utility DSM Contracts Individual and Corporate donors Residential Late Fees Xcel Energy Severance Tax Operational Funds State funds State Weatherization Funds Multi-family buildings Crisis Intervention Program LIHEAP Funds Individual Donors City and County of Denver franchise fee negotiation Contracts with Affordable Housing Developers and Housing Authorities Active at legislature Corporations and Foundations Oil and gas producers Intervene at Public Utilities Commission in rate cases and rulemaking Individual and Corporate donors
Energy Outreach Colorado Efficiency Programs Multi-family Affordable Housing Nonprofit Energy Efficiency Program Single Family Centrally heated and individually heated buildings more than 5 units Statewide provider for State Weatherization Program Utility DSM - Xcel Energy, Atmos Energy, Source Gas, Colorado Natural Gas - Custom Rebate Also working with Rural Electric Cooperatives and Municipal Utilities Ability to decrease customer bills; also split incentives Commercial buildings shelters, food banks, transitional housing, administrative offices Split between EOC and State Weatherization Program City and County of Denver Crisis Intervention Program LIHEAP - Furnace replacement and repair Utility DSM - Xcel Energy, Atmos Energy, Source Gas, Colorado Natural Gas - Custom Rebate Large energy users that have not been targeted historically Used to band aiding systems Utility DSM - Atmos Energy, Source Gas, Colorado Natural Gas - Prescriptive Rebate Levels - Xcel Energy/Black Hills Energy uses State Weatherization program Propane conversion program - Atmos Energy, Source Gas, Colorado Natural Gas - Rural communities DSM funds Creates unique access points to customers
Challenges, Benefits and Solutions Challenges EOC had been focused on cash assistance and energy efficiency grants for new construction had grant program in place since 1999 State Energy Program had limited process for Multi-family Weatherization; no process for nonprofit commercial accounts Benefits Total commitment to serving the low-income population EOC had developed Nonprofit Program (NEEP) using a subcontractor model Strong funding relationships, processes and procedures in place Mandatory Natural Gas DSM programs legislated in Colorado Solutions Leverage existing private and public funding and partnership relationships to build external capacity more than internal capacity Approximately 20,000 affordable housing units completed since 2009; 7,000 with low-cost measures; 200 nonprofits completed
Implementing Low-Income Energy Efficiency Programs in CO Building owner applies via website funnel for all programs Eligibility determined based on tenant income key is working with the owner; central heating systems versus individual furnaces; different funding sources have different eligibility requirements Walk through, assessment and committee meeting before energy audit is conducted; use Engineering firm and on staff engineers List of cost effective energy measures is developed and modeled Only measures supported by the audit are completed; model is key Leveraging of funds is key to maximize measures installed Energy efficiency measures are installed by subcontractors Warranties stay with building owner triangular contract (EOC, owner and subcontractors) Post work inspection is conducted by EOC staff; EOC tracks all data for evaluation Facility manager training is also key and maintained post project completion to ensure savings goals are met; education conducted throughout process EOC drives this process otherwise building owners typically go with lowest cost replacements
Enrollment Success Multi-family Weatherization EOC s legislative/regulatory advocacy efforts carved out funding for low-income consumers in DSM program development; Total Resource Cost (TRC) test can be lower than 1.0 for specific projects as low as overall low-income portfolio is greater than 1.0; also a 25% non energy benefit adder in additional filing; no harm clause EOC competed in broad competitive RFP to administer programs Leveraging multiple funding sources, including owner contributions, to complete projects is key to the success; projects rarely completed without multiple funding sources Used Youth Corps to blast large buildings with low-cost measures and education Nonprofit Energy Efficiency Program Large energy users that did not have active utility account managers Needed to do a lot of education to encourage participation EOC had existing relationships with nonprofits statewide through cash assistance program
Enrollment Success Single-Family Weatherization Utility rebate funds applied during furnace replacement completed through Crisis Intervention Program new process developed Energy Saving Kits created cost effective program with large savings Leveraged strong single-family Weatherization Assistance Program (WX) production decreasing dramatically with funding cuts ARRA funding dramatically increased WX production so utility rebates could leverage existing work and increase efficiency levels of traditional WX measures currently challenged Propane conversion was a unique program serving rural natural gas utilities huge cost benefit to consumers to covert from propane to natural gas Public Utility Commission approved program
Modified TRCs for Xcel Energy DSM Program Budget $1.94M $3.6M $2.3M $4.3M $2.1M $4.2M $1.6M $2.9M Year 2012 2012 2011 2011 2010 2010 2009 2009 TRCs Electric Gas Electric Gas Electric Gas Electric Gas Kits 3.07 3.94 3.89 3.69 12.06 1.8 10.8 5.66 Multi- Family Nonprofit Program Single- Family 0.77 0.65 1.99 1.11 2.87 2.35 1.16 4.75 1.34 0.90 1.33 1.11 1.13 0.87 2.82 0.68 1.14 1.67 1.68 1.39 1.80 1.33 1.62 1.36 TRCs challenged with low natural gas prices and utilities use of calculated deemed savings from market rate buildings. Buildings we work with have, on average, older equipment that has been maintained at minimal levels to continue operations.
Example Garden Court Project, Denver 15 building affordable housing complex with 300 units and annual total utility costs of $263,765; usage - 189 kw, 1,588,301 kwh, and 14,808 Dth Measures include: Boiler replacements ($895K), pipe insulation, common area lighting, in unit lighting, low-cost measures, and refrigerators Total Project cost $1,050,000 $248,000 from state weatherization program LIHEAP funds $91,000 from City and County of Denver $79,000 from EOC private funders $418,000 from building owner nonprofit affordable housing developer $214,000 from Xcel Energy combined utility provider Predicted Savings Total Project Predicted Annual Savings $69,120 26% Annual Reduction 74 kw, 168,525 KWH, and 6,969 Dth! With leverage, 6-year simple payback for owner.
Key Factors for Growth and Success Subcontractor Model able to ramp up and down quickly Leveraging Funds public, utility and other private funds Understanding Funders Goals Utilities = Savings State and DOE = Production Cities/Corporations = Carbon Reduction Producing and Tracking Results and Good Reporting Database tracking units, kw, kwh, Dths, carbon working to add water savings Outcomes Measurement and Verification Continuous Process Improvement Keeping the Clients needs first Building Owners and Residents Advocacy on their behalf no one else considered their needs
New Model Modified Performance Contracting With grant funding declining and lower energy prices it is challenging to get projects completed especially with utility funds; therefore, more owner contribution needed Currently working with private funders and Community Development Financial Institutions to create process for installation of measures using loan tools Problem is not with available funding but selecting the right projects and organizations willing to take on debt EOC is working on a model to create working operating funding as part of the performance contract and redirecting those funds to the beneficiary organization
Concluding Remarks Important to maintain momentum gained in the last few years; requires education through regulatory efforts Lower energy prices challenge the programs We can fail a project as long as overall program is deemed cost effective creates a delicate balancing act We can pass a project but it requires more owner contribution Evaluation of programs critical to future funding opportunities Utilities need to recognize how these programs need different regulatory parameters than market rate programs Requires more hand-holding and selling than typical projects projects need special consideration
Contact Information: Jennifer Gremmert Deputy Director E-mail: jgremmert@energyoutreach.org Address: 225 E 16 th Ave., Suite 200 Denver, Colorado 80203 Phone: (303) 226-5052 Web: www.energyoutreach.org