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NEW YORK ENERGY $MARTSM PROGRAM

EVALUATION AND STATUS REPORT YEAR ENDING DECEMBER 31, 2007

REPORT TO THE SYSTEM BENEFITS CHARGE ADVISORY GROUP

FINAL REPORT

MARCH 2008

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Table of Contents ACRONYMS AND ABBREVIATIONS............................................................................................AA-1

EXECUTIVE SUMMARY ..................................................................................................................ES-1 Program Administration .................................................................................................................... ES-2 New York Energy $martSM Budget and Spending Status .................................................................. ES-2 Portfolio Level Findings .................................................................................................................... ES-5 Cost Effectiveness of Programs......................................................................................................... ES-8 Macroeconomic Impact Analysis ...................................................................................................... ES-9 Evaluation Projects .......................................................................................................................... ES-10 Commercial/Industrial Programs..................................................................................................... ES-11 Residential and Low-Income Programs........................................................................................... ES-12 Research and Development Programs ............................................................................................. ES-15 Follow Up on Evaluation Recommendations .................................................................................. ES-16

1 INTRODUCTION AND PUBLIC POLICY CONTEXT..................................................................1-1 1.1 Introduction...................................................................................................................................1-1 1.2 Public Policy Context ...................................................................................................................1-2 1.3 Design and Conduct of the New York Energy $martSM Program.................................................1-3 1.4 Organization of the Report............................................................................................................1-4

2 PORTFOLIO-LEVEL REPORTING.................................................................................................2-1 2.1 Budget and Spending Status .........................................................................................................2-1 2.2 Portfolio Level Findings .............................................................................................................2-14 2.3 Portfolio Process Evaluation.......................................................................................................2-31 2.4 New York City Process Study Approach....................................................................................2-33 2.5 New York Energy $martSM General Awareness .........................................................................2-34

3 COMMERCIAL/INDUSTRIAL PROGRAMS .................................................................................3-1 3.1 Overview of Commercial/Industrial Programs .............................................................................3-1 3.2 Commercial/Industrial Evaluation Activities................................................................................3-3 3.3 Key Commercial/Industrial Evaluation Findings .........................................................................3-3 3.4 Peak Load Management Program...............................................................................................3-12 3.5 Enhanced Commercial and Industrial Performance Program.....................................................3-14 3.6 New York Energy $martSM Business Partners ............................................................................3-19 3.7 New York Energy $martSM Loan Fund and Financing Program ................................................3-23 3.8 Energy Smart Focus Program .....................................................................................................3-26 3.9 High Performance New Buildings Program ...............................................................................3-29 3.10 FlexTech Technical Assistance Program....................................................................................3-41

4 RESIDENTIAL AND LOW-INCOME PROGRAMS ......................................................................4-1 4.1 Overview of the Residential and Low-Income Programs .............................................................4-1 4.2 Residential and Low-Income Evaluation Activities .....................................................................4-3 4.3 Residential and Low-Income Evaluation Findings.......................................................................4-4 4.4 Single Family Home Performance Program ...............................................................................4-10 4.5 Multifamily Performance Program .............................................................................................4-23 4.6 Market Support Program.............................................................................................................4-29

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4.7 Communities and Education Program ........................................................................................4-35 4.8 EmPower New YorkSM ...............................................................................................................4-40 4.9 Buying Strategies and Energy Awareness Program ...................................................................4-47

5 RESEARCH AND DEVELOPMENT PROGRAMS ........................................................................5-1 5.1 Overview of the Research and Development Programs ...............................................................5-1 5.2 R&D Program Evaluation Activities ............................................................................................5-3 5.3 R&D Program Evaluation Findings..............................................................................................5-4 5.4 Public Benefit Power Transmission and Distribution Research .................................................5-15 5.5 Clean Energy Infrastructure........................................................................................................5-18 5.6 Power Systems Product Development ........................................................................................5-30 5.7 DG-CHP Demonstration.............................................................................................................5-34 5.8 Demand Response and Innovative Rate Research ......................................................................5-39 5.9 Electric Transportation................................................................................................................5-41 5.10 Environmental Monitoring, Evaluation, and Protection .............................................................5-43 5.11 Industrial Process & Product Innovation Program .....................................................................5-47 5.12 Municipal Water and Wastewater Efficiency .............................................................................5-49 5.13 Next Generation and Emerging Technologies ............................................................................5-52

APPENDIX A: BENEFIT/COST ANALYSIS INPUTS ....................................................................A-1

Tables Table ES-1. New York Energy $martSM Program Budget ($ million)......................................................... 3 Table ES-2. Financial Status of New York Energy $martSM Program ($ million) through 2007 ................ 4 Table ES-3. New York Energy $martSM Program Goals and Progress through December 31, 2007 ......... 5 Table ES-4. Cumulative Program Benefits from Installed Measures .......................................................... 6 Table ES-5. Benefit/Cost Ratios for the New York Energy $martSM Portfolio through 2007..................... 9 Table ES-6. Summary of Macroeconomic Impacts of the New York Energy $martSM Program

(Constant 2007$)................................................................................................................... 9 Table ES-7. Commercial/Industrial Programs – Long-Term Goals and Achievements ............................ 12 Table ES-8. Residential and Low-Income Programs – Long-Term Goals and Achievements.................. 13 Table 2-1. New York Energy $martSM Program Budget ($ million).........................................................2-2 Table 2-2. Financial Status of New York Energy $martSM Program ($ million) through 2007................2-4 Table 2-3. Commercial/Industrial Programs – Financial Status ($ million) through 2007.......................2-6 Table 2-4. Residential and Low-Income Programs - Financial Status ($ million) through 2007 .............2-9 Table 2-5. Research & Development Programs – Financial Status ($ million) through 2007................2-12 Table 2-6. New York Energy $martSM Goals and Progress through December 31, 2007 ......................2-16 Table 2-7. Cumulative Benefits from Installed Measures ......................................................................2-18 Table 2-8. Adjusted Cumulative Annual Savings by Program through December 2007 .......................2-21 Table 2-9. Summary of Macroeconomic Impacts of the New York Energy $martSM Program

(Constant 2007$)...............................................................................................................2-23 Table 2-10. Cumulative Savings Through Year-End 20071 ...................................................................2-27 Table 2-11. Cumulative New York Energy $martSM Spending Through Year-end 2007.......................2-27 Table 2-12. Cumulative Benefits Summary............................................................................................2-28 Table 2-13. Cumulative Benefit/Cost Ratios ..........................................................................................2-28 Table 2-14. Incremental Electric, Natural Gas, and Water Savings by Year1 ........................................2-29 Table 2-15. Incremental New York Energy $martSM Spending..............................................................2-29 Table 2-16. Scenario 1 Benefit/Cost Ratios by Year ..............................................................................2-29

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Table 2-17. Cost per kWh by Year .........................................................................................................2-30 Table 2-18. Solicitations Released Through Year-End 20071 ................................................................2-31 Table 2-19. Incentive Solicitations Released Through Year-End 2007..................................................2-33 Table 3-1. C/I Program Evaluation Activities ..........................................................................................3-4 Table 3-2. C/I Program Electricity Savings through December 31, 2007 and Progress toward Five-Year

Goal.....................................................................................................................................3-5 Table 3-3. C/I Program Peak Demand Savings through December 31, 2007 and Progress toward Five-

Year Goal ............................................................................................................................3-6 Table 3-4. C/I Program Fuel Savings through December 31, 2007..........................................................3-7 Table 3-5. Peak Load Management Program – Long-Term Goals and Achievements ..........................3-13 Table 3-6. PLMP Cumulative Annual Energy and Peak Demand Savings (through December 2007)..3-14 Table 3-7. Enhanced Commercial and Industrial Performance Program – Long-Term Goals and

Achievements....................................................................................................................3-15 Table 3-8. Enhanced Commercial and Industrial Performance Program – Key Program Outputs.........3-15 Table 3-9. ECIPP Cumulative Annual Energy and Peak Demand Savings (Through December

2007) .................................................................................................................................3-17 Table 3-10. ECIPP NEI Results..............................................................................................................3-17 Table 3-11. New York Energy $martSM Business Partners Program – Long-Term Goals and

Achievements....................................................................................................................3-20 Table 3-12. New York Energy $martSM Business Partners Program – Key Program Outputs ..............3-21 Table 3-13. New York Energy $martSM Business Partners Cumulative Annual Energy and Peak

Demand Savings (through December 2007) .....................................................................3-22 Table 3-14. Business Partners NEI Results ............................................................................................3-23 Table 3-15. New York Energy $martSM Loan Fund and Financing Program – Long-Term Goals and

Achievements for Commercial/Industrial Projects ...........................................................3-24 Table 3-16. Loan Fund and Financing Program – Key Program Outputs for Commercial/Industrial

Projects..............................................................................................................................3-24 Table 3-17. Loan Fund and Financing Program Program – Key Market Indicators and Program

Cumulative Progress .........................................................................................................3-25 Table 3-18. Loan Fund Cumulative Annual Energy and Peak Demand Savings (Through December

2007) .................................................................................................................................3-26 Table 3-19. Energy Smart Focus Program – Long-Term Goals and Achievements...............................3-27 Table 3-20. High Performance New Buildings Program – Long-Term Goals and Achievements.........3-29 Table 3-21. High Performance New Buildings Program – Key Program Outputs .................................3-30 Table 3-22. High Performance New Buildings Program – Key Market Indicators and Program

Cumulative Progress .........................................................................................................3-30 Table 3-23. Summary of new construction activity in New York, 2000-2007.......................................3-32 Table 3-24. High Performance New Buildings Cumulative Annual Energy and Peak Demand

Savings (through December 2007)....................................................................................3-39 Table 3-25. FlexTech TA Program – Long-Term Goals and Achievements..........................................3-41 Table 3-26. FlexTech TA Program – Key Program Outputs ..................................................................3-42 Table 3-27. FlexTech TA Program Cumulative Annual Energy and Peak Demand Savings (through

December 2007)1...............................................................................................................3-42 Table 4-1. 2007 Residential and Low-Income Program Evaluation Activities ........................................4-3 Table 4-2. Residential and Low-Income Program Electricity Savings through December 31, 2007

and Progress toward Five-Year Goals.................................................................................4-5 Table 4-3. Residential and Low-Income Program Peak Demand Reductions through December 31,

2007.....................................................................................................................................4-6 Table 4-4. Residential and Low-Income Program Fuel Savings through December 31, 2007 and

Progress toward Five-Year Goals .......................................................................................4-7 Table 4-5. Number of Low-Income Households Served by Program and Utility Area............................4-9

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Table 4-6. Single Family Home Performance Program – Long-Term Goals and Achievements...........4-11 Table 4-7. Single Family Home Performance Program – Key Program Outputs...................................4-12 Table 4-8. ENERGY STAR Labeled Homes Program – Key Market Indicators and Program

Cumulative Progress .........................................................................................................4-13 Table 4-9. Home Performance with ENERGY STAR Program – Key Market Indicators and

Program Cumulative Progress...........................................................................................4-14 Table 4-10. Total Eligible Building Stock and Penetration Rate 2001-2007 HPwES Program .............4-15 Table 4-11. Breakdown of complete HPwES projects – by Program Type............................................4-16 Table 4-12. Breakdown of completed HPwES projects by Home Type.................................................4-17 Table 4-13. Contractor participation by year ..........................................................................................4-19 Table 4-14. Single Family Home Performance Program Cumulative Annual Energy and Peak

Demand Savings (Through December 2007)....................................................................4-20 Table 4-15. Single Family Home Performance NEI Results ..................................................................4-20 Table 4-16. Multifamily Performance Program – Long-Term Goals and Achievements.......................4-24 Table 4-17. Multifamily Performance Program Cumulative Annual Energy and Peak Demand

Savings (Through December 2007) ..................................................................................4-25 Table 4-18. Multifamily Performance NEI Results ................................................................................4-26 Table 4-19. Market Support Program – Near-Term Goals and Achievements.......................................4-30 Table 4-20. Market Support Program – Key Program Outputs ..............................................................4-30 Table 4-21. Market Support Program – Key Market Indicators and Program Cumulative Progress .....4-31 Table 4-22. Market Support Program Cumulative Annual Energy and Peak Demand Savings

(Through December 2007 unless noted) ...........................................................................4-33 Table 4-23. Market Support Program NEI Results.................................................................................4-33 Table 4-24. Communities and Education Program – Long-Term Goals and Achievements..................4-38 Table 4-25. Communities and Education Program – Key Program Outputs ..........................................4-39 Table 4-26. Non-SBC Funds Leveraged.................................................................................................4-41 Table 4-27. EmPower New YorkSM Program – Near-Term Goals and Achievements ...........................4-42 Table 4-28. EmPower New YorkSM Program – Key Market Indicators and Program Cumulative

Progress (SBC-funded only) .............................................................................................4-42 Table 4-29. EmPower New YorkSM Program Cumulative Annual Energy and Peak Demand

Savings (Through December 2007) ..................................................................................4-43 Table 4-30. Summary of Original Program Objectives and their Achievement .....................................4-44 Table 4-31. Buying Strategies Program Evolution .................................................................................4-47 Table 4-32. Buying Strategies and Energy Awareness Program – Long-Term Goals and

Achievements....................................................................................................................4-48 Table 4-33. Buying Strategies and Energy Awareness Program – Key Program Outputs .....................4-49 Table 5-1. R&D Program Evaluation Activities .......................................................................................5-4 Table 5-2. R&D Program Electricity Savings through December 31, 2007.............................................5-5 Table 5-3. R&D Program Peak Demand Reductions through December 31, 2007..................................5-5 Table 5-4. R&D Program Fuel Savings through December 31, 2007 ......................................................5-6 Table 5-5. Net Impacts on the New York State Economy from NYSERDA-funded Product

Development Projects .......................................................................................................5-10 Table 5-6. Public Benefit Power Transmission and Distribution Research Program Goals achieved

from July 1, 2006 through December 31, 2007.................................................................5-16 Table 5-7. Co-Funding of T&D Projects Awarded (As of December 2007)..........................................5-17 Table 5-8. Clean Energy Infrastructure Program Goals achieved from July 1, 2006 through

December 31, 2007 ...........................................................................................................5-19 Table 5-9. Clean Energy Infrastructure – Key Program Outputs............................................................5-20 Table 5-10. Clean Energy Infrastructure – Key Market Indicators and Program Cumulative

Progress.............................................................................................................................5-20

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Table 5-11. Clean Energy Infrastructure Program Cumulative Annual Clean Generation (through December 2007) ................................................................................................................5-22

Table 5-12. Power Systems Product Development Program Goals achieved from July 1, 2006 through December 31, 2007..............................................................................................5-31

Table 5-13. DG-CHP Demonstration Program – Long-Term Goals and Achievements........................5-35 Table 5-14. DG-CHP Demonstration Program – Key Program Outputs................................................5-35 Table 5-15. DG-CHP Cumulative Annual Energy and Peak Demand Production (Through

December 2007 .................................................................................................................5-39 Table 5-16. Demand Response and Innovative Rate Research Program Goals achieved from July 1,

2006 through December 31, 2007.....................................................................................5-40 Table 5-17. Demand Response and Innovative Rate Research Program Cumulative Annual Energy

and Peak Demand Savings (Through December 2007) ....................................................5-41 Table 5-18. Electric Transportation Program Goals achieved from July 1, 2006 through

December 31, 2007 ...........................................................................................................5-42 Table 5-19. Environmental Monitoring, Evaluation, and Protection Program Goals achieved from

July 1, 2006 through December 31, 2007 .........................................................................5-44 Table 5-20. Industrial Process & Product Innovation Program – Near-Term Goals and

Achievements....................................................................................................................5-48 Table 5-21. Industrial Process & Product Innovation Program – Key Program Outputs .......................5-49 Table 5-22. Municipal Water and Wastewater Efficiency Program Goals achieved from July 1,

2006 through December 31, 2007.....................................................................................5-50 Table 5-23. Project and Funding Status through December 2007 ..........................................................5-52 Table 5-24. Next Generation and Emerging Technologies Program – Long-Term Goals and

Achievements....................................................................................................................5-54 Table 5-25. Next Generation and Emerging Technologies New Product Development ........................5-58

Figures Figure ES-1. Program Spending and Savings (2004-2007)1........................................................................ 8 Figure 2-1. New York Energy $martSM Ratepayer Contributions by Utility Service Area ......................2-3 Figure 2-2. New York Energy $martSM Ratepayer Contributions by Sector ............................................2-3 Figure 2-3. New York Energy $martSM Program Funding History and Activity December 1998 through

December 2007 ...................................................................................................................2-5 Figure 2-4. Total SBC Expenditures by Utility ........................................................................................2-6 Figure 2-5. C/I Funds Spent by Utility Service Area................................................................................2-7 Figure 2-6. C/I Funds Spent by Sector......................................................................................................2-8 Figure 2-7. Residential Funds Spent by Utility Service Area .................................................................2-10 Figure 2-8. Residential Funds Spent by Housing Type ..........................................................................2-10 Figure 2-9. Low-Income Funds Spent by Utility Service Area ..............................................................2-11 Figure 2-10. Low-Income Funds Spent by Housing Type......................................................................2-11 Figure 2-11. R&D Funds Spent by Utility Service Area ........................................................................2-13 Figure 2-12. R&D Funds Spent by Technology .....................................................................................2-13 Figure 2-13. Electricity Savings by Utility through December 2007 .....................................................2-19 Figure 2-14. Demand Savings by Utility (includes callable MW) through December 2007..................2-20 Figure 2-15. 2007 Update – Net Employment Impacts by Year.............................................................2-24 Figure 2-16. Cumulative Benefit/Cost Ratios.........................................................................................2-28 Figure 2-17. Scenario 1 Benefit/Cost Ratios by Year.............................................................................2-30 Figure 2-18. Cost per kWh by Year........................................................................................................2-31

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Figure 3-1. HPNB market penetration (building area) by utility area, cumulative 2000-2007 ..............3-33 Figure 3-2. HPNB market penetration by structure type, cumulative 2000-2007 ...................................3-34 Figure 3-3. State-level comparison, LEED certified and registered projects..........................................3-35 Figure 3-4. State-level comparison, LEED certified and registered projects, normalized by 2007

population..........................................................................................................................3-36 Figure 3-5. Participating A&E firms classified by number of HPNB projects.......................................3-38 Figure 4-1. Market and Assisted Jobs Percentage, 2004-2007 ...............................................................4-17 Figure 4-2. Distribution of Eligible Market ............................................................................................4-18 Figure 4-3. Distribution of Projects by Contractors................................................................................4-19 Figure 4-4. Percent of Appliance Models on Display at Partner Stores that are ENERGY STAR

Compliant..........................................................................................................................4-32 Figure 5-1. Recoupment Payment Amounts (1997 to 2007) ....................................................................5-7 Figure 5-2. Sales by Year (1997 to 2007) .................................................................................................5-8 Figure 5-3. Sales from New Products (1997 to 2007) by Sector ..............................................................5-9 Figure 5-4. Product Development Funding (1992 to 2007)....................................................................5-11 Figure 5-5. Funds Awarded From PON 1102 as of December 2007......................................................5-16 Figure 5-6. Power Systems Funding by Project Type.............................................................................5-32 Figure 5-7. Power Systems Funding by Technology Area .....................................................................5-32 Figure 5-8. Peak KW Reduction by Prime Mover for Encumbered Projects (As of Year-End 2007) ...5-36 Figure 5-9. Peak KW Reduction by Utility Service Area for Encumbered Projects (Through 2007) ....5-36 Figure 5-10. Citations of Journal Articles from EMEP Projects ............................................................5-46 Figure 5-11. Distribution of Funding by Project Type ...........................................................................5-57 Figure 5-12. Next Generation and Emerging Technologies Funding by Sector .....................................5-57

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Acronyms and Abbreviations

AC: Air conditioner A&E: Architecture and engineering firms AD: Advanced diagnostics AHP: Assisted Home Performance with ENERGY STAR® AIA: American Institute of Architects AMP: Assisted Multifamily Program ASERTII: Association of State Energy Research and Technology Transfer Institutions ASHRAE: American Society of Heating, Refrigerating, and Air Conditioning ASME: American Society of Mechanical Engineers AUSA: Association of the United States Army B/C: Benefit/cost B/I: Business and institutional BPI: Building Performance Institute Btu: British thermal unit Cx: Commissioning C/I: Commercial and industrial CBO: Community-based organization CEE: Consortium for Energy Efficiency CEM: Residential Comprehensive Energy Management Program CFL: Compact fluorescent light CHG&E: Central Hudson Gas & Electric Corporation CHP: Combined heat and power CIPP: Commercial/Industrial Performance Program CO: Carbon monoxide CO2: Carbon dioxide Con Edison: Consolidated Edison Company of New York, Incorporated CSG: Conservation Services Group, Inc. CSP: Curtailment service provider DCV: Demand control ventilation DEC: New York State Department of Environmental Conservation DEGI: Dispatchable Emergency Generation Initiative, a component of the Peak Load Reduction Program (PLRP) DG: Distributed generation DHCR: New York State Division of Housing and Community Renewal DI: Low-Income Direct Install Program DOE: United States Department of Energy DPS: New York State Department of Public Service DR: Demand response DCV: Demand control ventilation ECIPP: Enhanced Commercial/Industrial Performance Program EDRP: New York Independent System Operator Emergency Demand Response Program


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EES Energy Efficiency Services EESAT: Electrical Energy Storage Applications and Technology EMEP: Environmental Monitoring, Evaluation, and Protection Program EMP: ENERGY STAR® Multifamily Building Program EPA: United States Environmental Protection Agency EPRI: Electric Power Research Institute ERO Electricity Reliability Organization ESA: Electrical Storage Association ES: ENERGY STAR® ESCO: Energy services company ESPM: ENERGY STAR® Products and Marketing ESS: Energy Smart Students ET: Enabling Technology for Price-Sensitive Load Management EUR: End-Use Renewables Program FERC: Federal Energy Regulatory Commission FlexTech: Flexible Technical Assistance Program FR: Freeridership GW: Gigawatt GWh: Gigawatt hour HEAP: Home Energy Assistance Program HERS: Home Energy Rating System HFI: Homeowner Financing Incentive HPD: New York City Department of Housing Preservation and Development HPwES: Home Performance with ENERGY STAR® HTR: Hard-to-reach HTS: High temperature superconducting HUD: United States Department of Housing and Urban Development HVAC: Heating, ventilation, & air-conditioning ICAP: New York Independent System Operator Installed Capacity Program ISO: Independent system operator IDC: Integrated Data Collection IM: Interval Meters Program, a component of the Peak Load Reduction Program (PLRP) IRDD: Industrial Research, Development, and Demonstration Program kW: Kilowatt kWh: Kilowatt hour LC/S: Load Curtailment and Shifting Program, a component of the Peak Load Reduction Program (PLRP) LED: Light emitting diode LEEDTM: Green Buildings Leadership in Energy and Environmental Design LI: Low Income LIFE: Low-Income Forum on Energy LIHEAP: Low-Income Home Energy Assistance Program LIPA: Long Island Power Authority LNG: Liquefied natural gas LSE: Load-serving entity M&V: Measurement and verification MCAC: Market characterization, assessment, and causality analysis MF: Multifamily MMBtu: Million British thermal units MOU: Memorandum of Understanding MW: Megawatt


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MWh: Megawatt-hour NAAQS: National Ambient Air Quality Standard Nat’l Grid: National Grid NBI: New Buildings Institute NCP: New Construction Program NCQLP: National Council on Qualifications for Lighting Professions NEEP: Northeast Energy Efficiency Partnerships NEI: Non-energy impacts NEMA: National Electrical Manufacturers Association NextGen: Next Generation of Energy Efficient End-Use Technologies Program NOx: Nitrogen oxides NTG: Net-to-gross NYC: New York City NYCA: New York control area NYE$: New York Energy $martSM Program NYE$C: New York Energy $martSM Communities NYESLH: New York ENERGY STAR® Labeled Homes NYISO: New York Independent System Operator NYPA: New York Power Authority NYS: New York State NYSEG: New York State Electric and Gas Corporation NYSERDA: New York State Energy Research and Development Authority NYSRC: New York State Reliability Council NYWEA: New York Water Environment Association O&M: Operations and maintenance O&R: Orange and Rockland Utilities, Incorporated OPC: Outreach project consultant OTDA: New York State Office for Temporary and Disability Assistance PDRE: Permanent Demand Reduction Effort, a component of the Peak Load Reduction Program (PLRP) PEM: Premium-Efficiency Motors Program PET: Program Efficiency Test PLC: Power line carrier PLRP: Peak Load Reduction Program PM: Particulate matter PON: Program Opportunity Notice POP: Point-of-purchase PSC: New York State Public Service Commission PT/LM: Program Theory and Logic Modeling PV: Photovoltaic QA: Quality assurance QC: Quality control R&D: Research and development RD&D: Research, development, and demonstration RAC: Room air conditioner RCx: Retrocommissioning ResTech: Residential Technical Assistance Program RFP: Request for Proposals RG&E: Rochester Gas and Electric Corporation RPS: Renewable portfolio standard RTO: Regional transmission organization RTP: Real time pricing


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RTU: Rooftop unit SBC: System benefits charge SCLP: Small Commercial Lighting Program SEC: Smart Equipment Choices Program SEER: Seasonal energy efficiency ratio SIR: Standard Interconnection Requirements SO: Spillover SO2: Sulfur dioxide TA: Technical assistance, Technical Assistance Program T&D: Transmission and distribution TECA: Training, Education, Certification and Awareness TEP: Technical Evaluation Panel TMET: Total Market Effects Test TREAT: Targeted Residential Energy Analysis Tools TSP: Technical service provider TTW: Through-the-wall air conditioner V/C: Value/cost analysis VEIC: Vermont Energy Investment Corporation VSD: Variable speed drive WAP: U.S. Department of Energy Weatherization Assistance Program WNI: Weatherization Network Initiative

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Executive Summary

This report presents evaluation results for the New York Energy $martSM public benefits program (Program) for activities completed through year-end 2007.1 The report was prepared jointly by staff of the New York State Energy Research and Development Authority (NYSERDA) and a team of third-party evaluation assistance and specialty contractors acting under the terms and conditions of a Memorandum of Understanding (MOU) 2 between NYSERDA, the New York State Department of Public Service (DPS), and the New York State Public Service Commission (PSC). This report was reviewed before being finalized by the System Benefits Charge Advisory Group3 (Advisory Group), which serves as the Independent Program Evaluator in accordance with the MOU. The report is transmitted to the PSC by the Advisory Group in fulfillment of its responsibilities under the terms of the MOU.

On December 21, 2005, the PSC ordered4 New York’s public benefits program funding extended for five years, from July 1, 2006 through June 31, 2011 and increased funding from approximately $150 million to $175 million annually ($8965 million over the five-year period). The continuation and expansion of the Program is intended to help maintain momentum for the State’s efforts to develop competitive markets for energy efficiency; demand management (including peak load reduction); outreach and education services; research, development, and demonstration; low-income services; and to provide direct economic and environmental benefits to New Yorkers. The extended program will continue to address market barriers to the competitive procurement of these services. By mid-2011, SBC funds and interest earnings will have provided more than $1.87 billion to support a full range of programs to help the State meet its energy challenges.6

In 2007, NYSERDA developed a formal Energy Public Benefits Program Evaluation Plan7 (Plan) to serve as an overarching guidance document for evaluating the programs it administers, including the New York Energy $martSM Program. The draft Plan was provided to the Advisory Group and DPS staff, and

1 Previous annual reports dated September 2000, January 2002, May 2003, May 2004, May 2005, May 2006, and March 2007 presented cumulative results from the Program’s inception on July 1, 1998. The prior reports are available on NYSERDA’s Website at www.nyserda.org and by request. 2 Memorandum of Understanding between the New York State Public Service Commission, New York State Department of Public Service, and New York State Energy Research and Development Authority, March 11, 1998, revised December 6, 2001. 3 The Advisory Group consists of 24 individuals representing varied interests, including utilities, business and environmental groups, energy services companies, community organizations, professional and trade associations, and national energy efficiency and energy research and development (R&D) organizations 4 Case 05-M-0090, In the Matter of the System Benefits Charge III, Order Continuing the System Benefits Charge (SBC) and the SBC-Funded Public Benefits Programs, issued and effective December 21, 2005. 5 Consisting of $866 million in SBC funding plus $30 million in anticipated interest earnings. 6 In addition to NYSERDA’s New York Energy $martSM Program, funded through the SBC, the New York Power Authority (NYPA) and Long Island Power Authority (LIPA) each offer complementary public benefits programs of their own. The three authorities coordinate program design and service delivery wherever practicable to maximize the use of public funds for the programs and to ensure a coordinated statewide effort to meet public policy goals. The results of the NYPA and LIPA programs are not included in this report. 7 NYSERDA, NYSERDA Energy Public Benefits Program Evaluation Plan, December 2007.

Executive Summary

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their comments were incorporated into the final Plan. Work undertaken to complete this report was conducted in accordance with the evaluation framework and model documented in the Plan. Individual evaluation contractor reports to NYSERDA that detail the activities undertaken to develop this report are available upon request.

Program Administration

NYSERDA has instituted numerous policies to ensure that the Program is administered in an open, fair, and equitable manner. Ninety-eight percent (98%) of projects are competitively selected. The remaining 2% of projects involve contracts less than $25,000 each, unsolicited proposals that are deemed to support the Program’s goals, and sole-source contracts with unique, specially-skilled contractors.

Contract awards are recommended to NYSERDA management for consideration and approval by expert panels that review all competitive proposals. The panels consist of technical experts, and external members are drawn from government and industry. Panels are required to have more external reviewers than internal NYSERDA reviewers. The panels provide feedback on the content and composition of each program solicitation to ensure that solicitations reach the widest possible audience of potential proposers. All solicitations are published in the New York State Contract Reporter.

The evaluation function is overseen by NYSERDA and conducted by a team of independent evaluation contractors. All contractors were selected through competitive solicitation with a member of the Advisory Group and DPS serving on each review panel. The Advisory Group and DPS help allocate the evaluation budget, identify evaluation activities to be conducted, and establish timelines for evaluation activities. Evaluation analyses and reports are reviewed by the Advisory Group and DPS before being finalized and submitted to the PSC for approval. The Advisory Group is independent of NYSERDA; its members are selected by DPS and NYSERDA, it corresponds directly with the PSC, and members of the group participate in selection of evaluation contractors, receive evaluation reports, when requested, directly from evaluation contractors, and have independent access to those contractors.

New York Energy $martSM Budget and Spending Status

As shown in Table ES-1, the Program has a thirteen-year budget of approximately $1.87 billion. The budget is primarily allocated among four major program areas:

• Commercial/Industrial initiatives account for the largest share, 38% of the thirteen-year New York Energy $martSM Program budget, or $634 million.

• Research and Development, including environmental monitoring and evaluation, accounts for 23% of the thirteen-year budget, or $388 million.

• Funding for Low-Income initiatives accounts for approximately 19% of the total thirteen-year budget, or $319.

• Residential (non-low-income) initiatives also account for almost 19% of the thirteen-year budget, or $313 million.

In addition to these major program areas, the thirteen-year Program also funds an environmental disclosure program ($1.9 million), program administration ($128.2 million), program evaluation ($34.4 million), and includes a cost recovery fee ($25.4 million), a mandatory payment into the general fund

2BNew York Energy $martSM Budget and Spending Status

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assessed by New York State for state support functions. Table ES-2 shows the financial status of the programs as of December 31, 2007.

Table ES-1. New York Energy $martSM Program Budget ($ million)

Budget 1

SBC I & SBC II2 SBC III 3 Total Budget % of Program Area Budget

% of Total Budget

Commercial/Industrial $247.1 $386.8 634.0 37.6% 33.8%

Residential 165.4 147.3 312.8 18.6% 16..7%

Low-Income 86.6 232.0 318.6 18.9% 17.0%

Research and Development 105.9 282.6 388.4 23.1% 20.7%

General Awareness4 (Marketing) 15.9 15.2 31.0 1.8% 1.7%

Program Areas Total $620.9 $1,063.9 $1,684.7 100.0% 89.9%

Program Administration 59.8 68.3 128.2 - 6.8%

Metrics and Evaluation 14.5 19.9 34.4 - 1.8%

Environmental Disclosure5 0.8 1.1 1.9 - 0.1%

NYS Cost Recovery Fee6 9.2 16.2 25.4 - 1.4%

Other Costs Total $ 84.3 $105.6 $189.9 - 10.1%

Total New York Energy $martSM $705.2 $1,169.5 $ 1,874.7 - 100.0% 1 Reflects carryover in funds and reallocation as approved by the Public Service Commission in 2007. 2 SBC I: July 1, 1998 through June 30, 2001; SBC II: July 1, 2001 through June 30, 2006. 3 SBC III: July 1, 2006 through June 30, 2011. 4 General Awareness previously included in Residential Program Area. 5 This program provides electricity commodity suppliers with data for informing customers about the fuel mix and associated environmental impacts of their electricity sources. 6 The New York State Cost Recovery Fee is assessed for services to public authorities. The fee is determined by the New York State Division of Budget and imposed and collected by the Department of Taxation and Finance.

Totals may not sum exactly due to rounding.

Source: NYSERDA

Executive Summary

ES-4

Table ES-2. Financial Status of New York Energy $martSM Program ($ million) through 2007

Funds Spent

Total 13-

Year Budget 1

SBC I &

SBC II 2

SBC

III 3

Total Spent &

% of Budget

Encumbered Funds4

% of Budget Encumbered

Committed Funds5

% of Budget Committed

Program Areas

Commercial/Industrial 634.0 247.1 61.2 308.4

48.6%

406.4

64.1%

453.9

71.6%

Residential 312.8 165.4 39.8 205.3

65.6%

224.7

71.8%

228.2

73.0%

Low-Income 318.6 86.6 51.4 137.9

43.3%

179.1

56.2%

180.0

56.5%

Research and Development 388.4 105.9 38.7 144.6

37.2%

211.5

54.5%

241.9

62.3%

General Awareness6 (Marketing) 31.0 15.9 3.4

19.3

62.3%

19.3

62.3%

19.3

62.3%

Program Areas Total $1,684.7 $620.9 $194.6 $815.5

48.4%

$1,041.0

61.8%

$1,123.4

66.7%

Other Costs

Program Administration 128.2 59.8 19.3 79.1

61.7%

79.1

61.7%

79.1

61.7%

Metrics and Evaluation 34.4 14.5 3.8 18.3

53.2%

23.1

67.2%

23.1

67.2%

Environmental Disclosure 1.9 0.8 -0.75 0.05

2.5%

0.05

2.6%

0.05

2.6%

NYS Cost Recovery Fee 25.4 9.2 3.5 12.7

50.0%

12.7

50.0%

12.7

50.0%

Other Costs Total $189.9 $84.3 25.8 $110.1

58.0%

$115.0

60.5%

115.0

60.5%

Total New York Energy SmartSM $1,874.7 $705.2 $220.4

$925.6

49.4%

$1,156.0

61.7%

$1,238.4

66.1% 1 Reflects carryover in funds and reallocation as approved by the Public Service Commission in 2007. 2 SBC I: July 1, 1998 through June 30, 2001; SBC II: July 1, 2001 through June 30, 2006. 3 SBC III: July 1, 2006 through June 30, 2011. 4 Encumbered funds associated with signed contracts and purchase orders. 5 Committed funds associated with encumbered funds and pending contracts. 6 General Awareness previously included in Residential Program Area.

Totals may not sum exactly due to rounding. Source: NYSERDA

3BPortfolio Level Findings

ES-5

Portfolio Level Findings

Progress Toward Goals

This section presents the cumulative progress of the New York Energy $martSM Program toward meeting the four overarching public policy goals set forth by the PSC.8 Overall, the Program is making good progress toward achieving its long term goals. The stated goals and progress made through December 31, 2007 are shown in Table ES-3. Substantial additional program-specific and sector-level accomplishments are documented in this report, and are further detailed in independent evaluation contractor reports.

Table ES-3. New York Energy $martSM Program Goals and Progress through December 31, 2007

Public Policy Goal Progress as of December 31, 2007

The New York Energy $martSM Program has improved system-wide reliability and peak demand reduction, enabling 550 MW of callable load reduction and installing efficiency measures that permanently reduce peak demand by another 650 MW.

Renewable energy programs have reduced peak demand on the electric grid by an additional 9.8 MW.

The New York Energy $martSM Program has led to the implementation of measures saving 3,057 GWh per year. Of this, over 100 GWh of electricity is being generated annually from DG-CHP systems.

The New York Energy $martSM Program has led to the installation of wind and photovoltaic (PV) technologies, which provide 106 GWh of clean electricity generation per year. This includes the installation of 865 PV and 15 small wind systems.

Over the past year, the number of operational DG-CHP systems has increased from 28 to 45.

Improve New York's energy system reliability and security by reducing energy demand and increasing energy efficiency, supporting innovative transmission and distribution technologies that have broad application, and enabling fuel diversity, including renewable resources.

Under the Public Benefit Power Transmission and Distribution Program, 15 projects have been approved to provide 14 companies nearly $6 million to pursue development of advanced technologies that will improve the efficiency and delivery of power for electric customers across the State.

The New York Energy $martSM Program has saved participating customers nearly $570 million in annual energy costs.

More than 58,000 eligible New York low-income customers received direct assistance through the New York Energy $martSM programs, resulting in $220/year in average customer energy bill savings for this underserved population.

Reduce the energy cost burden of New Yorkers by offering energy users, particularly the State's lowest income households, services that moderate the effects of energy price increases and volatility and provide access to cost-effective energy efficiency options. The New York Energy $martSM portfolio has achieved a benefit/cost ratio of

2.1 under the most conservative Total Resource Cost Test scenario.

8 Case 05-M-0090, In the Matter of the System Benefits Charge III, Order Continuing the System Benefits Charge (SBC) and the SBC-Funded Public Benefits Programs, issued and effective December 21, 2005 , pages 11-12.

Executive Summary

ES-6


The annual reduction of emissions resulting from New York Energy $martSM Programs’ energy savings is 2,570 tons of nitrogen oxide (NOX), 4,720 tons of sulfur dioxide (SO2), and 2.0 million tons of carbon dioxide (CO2).

Between 2003 and 2007, the number of PV and small wind installers participating in the New York Energy $martSM Program has increased from 14 to 143.

Mitigate the environmental and health impacts of energy use by increasing energy efficiency, encouraging the development of support services for renewable energy resources, and optimizing the energy performance of buildings and products.

The New York Energy $martSM Program has helped optimize energy performance: in 797 new commercial buildings, in more than 11,000 new homes, in more than 18,000 existing homes, and through more than 11,700 energy efficiency projects in existing commercial/industrial buildings, including technical studies, measure replacement, and reduced-interest financing.

Averaged over a 29-year analysis period, the New York Energy $martSM Program creates and sustains on average more than 7,200 jobs, increases labor income by $334 million per year, increases total output by $503 million per year, and increases value added by $241 million per year in the State.

Initial results show that R&D product development expenditures have lead to an increase in gross state product (GSP). Every one dollar spent on product development projects leads to an increase in the GSP, or value added, by $3.1.

Create economic opportunity and promote economic well-being by supporting emerging energy technologies, fostering competition, improving productivity, stimulating the growth of New York energy businesses, and helping to meet future energy needs through efficiency and innovation. Private investment in combined heat and power has increased in New York. The

total cost for all projects encumbered through year-end 2007 is $290 million, 84% of which represents funds from project participants.

Summary of Program Benefits

Table ES-4 provides a summary of quantifiable benefits achieved by the New York Energy $martSM portfolio of programs for the past four years. By year-end 2007, the portfolio had achieved 3,060 GWh of cumulative annual electricity savings, and 4.6 million MMBtu of natural gas, fuel oil and other fuel savings. The New York Energy $martSM portfolio has reduced peak demand by 1,200 MW.

Table ES-4. Cumulative Program Benefits from Installed Measures

Benefits Through Year-End

2004

Through Year-End

2005

Through Year-End

2006

Through Year-End

20073

Electricity Savings from Energy Efficiency and DG-CHP (Annual GWh) 1,400 1,950 2,350 3,060

Renewable Energy Generation (Annual GWh) 102 103 105 106

Peak Demand Reduction (MW) 860 1,040 1,113 1,200a

Permanent Measures (MW) 325 445 495 650

Curtailable 1 535 595 618 550

Net Fuel Savings (Annual MMBtu) 2,600,000 4,000,000 4,049,000 4,660,000

Annual Energy Bill Savings to Participating Customers ($ Million) $195 $275 $330 $570


ES-7


2004

Through Year-End

2005

Through Year-End

2006

Through Year-End

20073

Jobs Created and Retained per Year2 2,500 3,100 3,700 4,700

NOx Emissions Reductions (Annual Tons) 1,280 1,750 2,060 2,570

SO2 Emissions Reductions (Annual Tons) 2,320 3,170 3,800 4,720

CO2 Emissions Reductions (Annual Tons) 1,000,000 1,400,000 1,600,000 2,000,000

Equivalent number of cars removed from NY roadways 200,000 275,000 320,000 400,000

a Does not include 9.8 MW of renewable energy generation capacity. 1 Curtailable MW have decreased due to a reassessment of the impact of the Enabling Technologies program. MW enabled under the SBC2 program Enabling Technologies for Price Responsive Load were not required to persist beyond the period of the contract. As such, the available MW have steadily declined since the program’s close. 2 Figures in this row represent the average number of jobs created and retained through year-end. Results from 2004 and 2005 have been restated based on new analysis conducted in 2006. 3 Savings for the New York Energy $martSM Products Program are estimated based on market data, survey research, and deemed savings values. The last update, completed and applied in Quarter 1 2007, added electricity, demand, and fuel savings for both 2005 and 2006. Year-end savings for 2005 and 2006 were not back-adjusted. Incremental electricity savings additions for these years are as follows: 28,756 MWh for appliances and 175,710 MWh for lighting in 2005, and 30,280 MWh for appliances and 190,721 MWh for lighting in 2006. The addition of 2005 and 2006 savings in Quarter 1 2007 also impact bill savings and emission reduction estimates reported in this table. The cumulative annual savings do not yet reflect additions for 2007 from the New York Energy $martSM Products Program. Additions for 2007 will be applied, to the extent possible, in the Quarter 1 2008 report.

Figure ES-1 shows the general trend in program spending, electricity savings, and peak demand reductions over the past four years. Spending bars represent the cumulative total spending, in millions, since inception of the 13-year program. Electricity savings and peak demand reductions depicted by the lines are cumulative annual figures. Values shown for each year represent the total electric savings and peak demand reductions experienced from measures installed since program inception and still operational.

Executive Summary

ES-8

Figure ES-1. Program Spending and Savings (2004-2007)1

New York Energy $martSM ProgramSpending, Electricity Savings, and Peak Reduction

2004 through 2007

$0$100$200$300$400$500$600$700$800$900

$1,000

2004 2005 2006 2007

Spen

ding

($ M

illio

n)

04008001,2001,6002,0002,4002,8003,2003,6004,000

GW

h an

d M

W

Cumulative Spending Cumulative Annual GWh Cumulative Peak Reduction (MW)

1 Savings for the New York Energy $martSM Products Program are estimated based on market data, survey research, and deemed savings values. The last update, completed and applied in Quarter 1 2007, added electricity and demand savings for both 2005 and 2006. Year-end savings for 2005 and 2006 were not back-adjusted. Furthermore, the cumulative annual savings do not yet reflect additions for 2007 from the New York Energy $martSM Products Program. Additions for 2007 will be applied, to the extent possible, in the Quarter 1 2008 report.

Cost Effectiveness of Programs

For deployment and market transformation programs for which energy and demand savings are estimated, an economic benefit/cost (B/C) analysis is used that monetizes savings and compares them to costs. Benefit/cost results for the deployment programs are summarized below and presented in more detail in Section 2. For R&D programs, such as next-generation technologies, distributed generation, new product development, and strategic reliability technologies, the economic benefit/cost methodology is inappropriate because these programs are designed to accomplish a range of objectives, many of which cannot be monetized in the early program years.

Benefit/cost ratios for deployment programs are shown in Table ES-5. Two different tests were used to calculate B/C ratios:

1. Total Resource Cost (TRC) Test divides the present value of the benefits by the present value of total resource costs.9

2. Program Administrator Cost (PAC) Test divides the present value of the benefits by the present value of NYSERDA spending.10

9 This test was referred to as the Total Market Effect Test (TMET) in prior years’ analyses. 10 This test was referred to as the Program Efficiency Test (PET) in prior years’ analyses.

5BMacroeconomic Impact Analysis11F

ES-9

The benefits included in this year’s analysis are described below:11

• Scenario 1: This scenario includes: (a) resource benefits associated with reduced electricity generation and capacity, and reduced use of natural gas and water; and (b) capacity market price effect arising from curtailable load programs.

• Scenario 2: Adds participant non-energy impacts such as monetized values for comfort, safety, and productivity.

• Scenario 3: Adds macroeconomic value added.

Table ES-5. Benefit/Cost Ratios for the New York Energy $martSM Portfolio through 2007

TRC Test PAC test

Scenario 1 2.1 6.2

Scenario 2 3.3 9.9

Scenario 3 4.4 13.2

Macroeconomic Impact Analysis12

Expenditures made by NYSERDA and program participants have substantial macroeconomic impacts that go far beyond direct benefits. Purchases of goods and services through the Program initiate a ripple effect as spending and re-spending influence various sectors of New York’s economy and, in turn, affect the level and distribution of employment and income in the State. A macroeconomic impact analysis13 of the programs was previously conducted and was updated for this report. Summary results are presented in Table ES-6. Averaged over a 29-year analysis period, the Program is expected to create and sustain on average more than 7,200 jobs, increase labor income by $334 million per year, increase total output by $503 million per year, and increase value added by $241 million per year. To date, the Program has created and/or sustained 4,700 jobs.

Table ES-6. Summary of Macroeconomic Impacts of the New York Energy $martSM

Program (Constant 2007$)

Economic Variable Program Implementation

Years (1999-2012)

Years Following Program Implementation

(2013-2027)

Annual Average over 29-year Analysis Period

(1999-2027)

Net Job Growth 7,765 6,742 7,236

Labor Income $386 Million $286 Million $334 Million

Total Output $669 Million $349 Million $503 Million

Value Added $324 Million $163 Million $241 Million

11 This year’s scenarios differ from prior years’ and these differences are further described in Section 2. 12 This section summarizes NYSERDA’s 2007 update to an analysis originally conducted in 2004. The initial study contains more detail on methods and approach, and is available from NYSERDA upon request: Neenan Associates, Macroeconomic Impact Analysis of the New York Energy $martSM Program: An analysis of short-term and longer-term impacts, August 2004. 13 The input-output model used the IMPLAN Pro software system (Version 2.0) developed by the Minnesota IMPLAN Group

Executive Summary

ES-10

Evaluation Projects

The findings in this report are compiled based on the cumulative work of NYSERDA and its evaluation contractor teams over the past several years; however, they also incorporate findings from the following evaluations conducted this year:

• Program logic models for the Commercial/Industrial, Residential, and Low-Income sectors as well as the R&D portfolio

• Program logic models covering the following 16 individual programs: Peak Load Management; Enhanced Commercial/Industrial Performance; Business Partners; Loan Fund and Financing; New York Energy $martSM Focus; Market Support; Buying Strategies and Energy Awareness; Public Benefit Power T&D Research, Clean Energy Infrastructure; DG-CHP Demonstration; Demand Response and Innovative Rate Research; Electric Transportation; Industrial Research, Development and Demonstration; Municipal Water and Wastewater Efficiency; Next Generation and Emerging Technologies; and General Awareness

• Year-end impact evaluation database reviews for the following six programs: Peak Load Management; Enhanced Commercial/Industrial Performance; FlexTech/Technical Assistance; Multifamily Building Performance; Clean Energy Infrastructure; and DG-CHP Demonstration

• Measurement & Verification studies for Peak Load Management; Enhanced Commercial/Industrial Performance; Small Commercial Lighting; Home Performance; EmPower New York; and Demand Response and Innovative Rate Research

• Market Characterization and Assessment studies on both High Performance New Buildings and Home Performance with ENERGY STAR (partially complete)

• Process evaluations on the Assisted Multifamily Program; the full Multifamily Building Performance Program; Communities and Education; EmPower New York; End Use Renewables; and the PV program element of Clean Energy Infrastructure

• A phase-one R&D portfolio impact evaluation

• A non-participant market effects study of the commercial/industrial existing buildings market

• A New York oversample to the 2006 National ENERGY STAR survey

• A study of the market for residential CFLs and fluorescent fixtures, including an update of the unit sales and energy savings credited to NYSERDA’s programs

• A study of the market for ENERGY STAR appliances, including an update of the unit sales and energy savings credited to NYSERDA’s program efforts

• Non-energy impact updates for Enhanced Commercial/Industrial Performance and Small Commercial Lighting

7BCommercial/Industrial Programs

ES-11

Commercial/Industrial Programs

Commercial/Industrial (C/I) Programs identify opportunities to improve energy efficiency and load management and try to foster changes in energy decision making by building owners and operators. Over the past 18 months, the C/I Programs have been streamlined to target diverse market actors, including architects and engineers who work primarily with large buildings and projects, and contractors and distributors whose primary focus is small buildings. C/I Programs address the efficient use of electricity, petroleum, and natural gas and seek to provide customers with comprehensive, attractive incentives and financing packages. Programs in the C/I area are discussed in detail in Section 3.

Commercial/Industrial Program Findings

Significant progress is being made by the new, streamlined set of C/I programs. Several goals were set for the third New York Energy $martSM Program funding cycle. These goals established levels to reach, by June 30, 2011, for energy and peak demand savings as well as several other key metrics of program success. Overall, the C/I portfolio is performing well in terms of the energy savings and peak demand reduction goals. Eighteen months into the five-year measurement period, most programs have surpassed 30% of their energy savings and demand reduction goals.

Overall, the C/I programs are making a significant impact on the market for both existing and new buildings. For example, on the largest energy-saving programs, namely Enhanced Commercial/Industrial Performance, High Performance New Buildings, and Technical Assistance, market effects (i.e., spillover) outweigh any naturally occurring adoption (i.e., freeridership) that is occurring. This is indicated by a net-to-gross ratio greater than 1.0.

Across the C/I programs, twelve additional logic model-driven goals were set for other key metrics besides energy savings such as the number of customers receiving assistance, funds leveraged, allies participating, and percentage of target markets affected by programs. As shown in Table ES-7, the programs are also performing well with respect to these other goals. Specifically, 18 months into the five-year measurement period:

• Two of the 12 goals have been surpassed (136%), or nearly met (96%)

• Progress on three of the 12 goals has reached 30% or more

• Progress on four of the 12 goals has reached at least 20%

• Progress on the remaining three goals is below 20%

Executive Summary

ES-12

Table ES-7. Commercial/Industrial Programs – Long-Term Goals and Achievements

Program Activity

Goal (July 1, 2006

through June 30, 2011)

Achieved through

December 31, 2007

% of Goal Achieved

PLMP Customers receiving assistance 750 294 39%

Leveraged Funds ($ million) $400-450 $74.2 million 17% ECIPP

Customer Projects 3,300-3,500 856 25%

Business Partners Business Partners (signed up) 1,500 88 6%

Customers receiving assistance (closed commercial/industrial loans) 500 161 32%

Participating lenders (signed participation agreements) 75 102 136% Loan Fund

Leveraged loan amount (for closed commercial/industrial loans) $60 million $57.8 96%

Energy $mart Focus Participants Receiving Assistance 21,000 1,030 5%

Customers receiving assistance (completed projects) 750 170 23%

Construction market affected (square feet) 75 million 19.9 million 27% NCP

Participating A&E firms (completed projects) 800 272 34%

FlexTech/TA Customers receiving assistance (approved proposals) 3,000 770 26%

Residential and Low-Income Programs

Residential energy efficiency programs influence decisions regarding energy use by homeowners, renters, and participants in the residential energy services and new construction markets. The programs also work with the multifamily building industry to improve the efficient use of electricity, petroleum, and natural gas. Residential programs are described in Section 4.

Low-Income programs reduce the energy burden14 on low-income households by improving the efficiency of energy use and providing energy management and aggregated energy procurement services. Initiatives in this program have also been streamlined and include: providing technical support for and installing a variety of energy-efficient electric end-use measures in low-income housing; paying a portion of the incremental cost of energy efficiency measures and electric heat conversions in publicly-assisted housing; helping low-income households aggregate energy purchases; incorporating energy-efficient equipment and design specifications into State and federally-assisted housing; and educating customers about the benefits of energy efficiency. Programs in the Low-Income area are also discussed in detail in Section 4.

14 Energy burden is the percentage of household income used to pay for energy.

8BResidential and Low-Income Programs

ES-13

Residential and Low-Income Program Evaluation Findings

Significant progress is being made by the Residential and Low-Income portfolio. Several long-term goals were set for the third New York Energy $martSM Program funding cycle. These goals established levels to reach, by June 30, 2011, for energy and peak demand savings as well as several other key metrics of program success. Overall, in the first 18 months of the five-year measurement period, three out of six Residential and Low-Income programs have achieved expected electricity savings (i.e., approximately 30% of the five-year goals). Two out of five programs have reached expected levels on the goals for other fuel savings. There is no goal for peak demand reduction in this sector. A few key programs are either progressing more slowly than planned or have not yet reported progress toward goals. Reasons are as follows:

• The Multifamily Building Performance Program for Existing Buildings has reached 3% of the electricity savings goal and 2% of the other fuel savings goal. This program still in the process of significant change, combining the three former programs into one streamlined program offering. This emphasis on program development, and a transition to a new implementation contractor, have slowed intake somewhat.

• The Multifamily Building Performance Program for New Buildings has not yet reported any electricity or other fuel savings, although the program did have 67 applications comprising 4,745 housing units in the design phase by the end of December. This is a completely new program launched in November 2006.

Across the Residential and Low-Income programs, 26 additional five-year goals were set for other key metrics besides energy savings, such as the number of customers receiving assistance, funds leveraged, allies participating, and outreach activities completed. As shown in Table ES-8, the programs are making progress with respect to these other goals. Specifically, 18 months into the five-year period:

• Four of the goals have already been surpassed

• Performance on eight of the 26 goals has reached or exceeded 30%

• Progress on two of the 26 goals is at 20% or more

• Progress on the remaining twelve goals is below 20% (six of these goals are for the Multifamily Performance Program, which is showing slow progress due to reasons already discussed above)

Table ES-8. Residential and Low-Income Programs – Long-Term Goals and Achievements

Program Activity

Goal (July 1, 2006


Achieved through

December 31, 2007

% of Goal Achieved

New ENERGY STAR Labeled Homes built 10,750 3,572 33% ENERGY STAR Labeled Homes New low-income ENERGY STAR Labeled

Homes built 4,000 9 <1%

Existing homes served (receiving treatment) 16,125 6,262 39% Home Performance with ENERGY STAR

Existing low-income homes served (receiving treatment) 10,500 2,029 19%

Executive Summary

ES-14

Program Activity

Goal (July 1, 2006


Achieved through

December 31, 2007

% of Goal Achieved

Number of existing market rate multifamily units receiving energy efficiency services (completed projects)

39,000 0 0%

Number of new market-rate multifamily units receiving energy efficiency services 7,500 0 0%

Tenant energy savings per year (at $250/unit) $34,875,000 0 0%

Number of existing low-income multifamily units receiving energy efficiency services (completed projects)

148,200 10,003 7%

Number of new low-income multifamily units receiving energy efficiency services 12,700 0 0%

Multifamily Performance Program

Low-income tenant energy savings per year (at $195/unit) $31,375,500 $1,950,585 6%

New manufacturing partners signed up 20 13 65%

New retail partners (independent) signed up 100 213 213%

New retail partners (big box, mass merchandisers) signed up 6 4 67% Market Support

Program

ENERGY STAR market share increase on targeted products (on average, across products)

25% 9% 36%

Teachers trained 5,000 1,000 20%

Total students reached Portion of total estimated to be low-income students

150,000 100,000

76,475 30,590

51% 31%

Community events held statewide 1,000 92 9%

Recruiting seminars held statewide 500 12 2%

Home performance contractors, technicians, builders and raters recruited for the Single Family Home Performance Program

800 201 25%

Communities and Education Program

Building analysts, designers, energy consultants, equipment installers, etc. recruited for Multifamily Building Performance Program

100 14 14%

EmPower Households served (completed) 31,500 12,495 40%

Funds leveraged through Buying Strategies initiative $20 million $2.5-3.2

million 15%

Additional low-income individuals reached via newsletters, weekly newspapers, etc. (readership)

5 million $5.79 million 116%

Additional low-income individuals reached via seminars and workshops (attendees) 15,000 32,395 216%

Buying Strategies and Energy Awareness

Additional contractors and other partners recruited in low-income districts 50 225 450%

9BResearch and Development Programs

ES-15

Research and Development Programs

NYSERDA’s R&D activities are concerned with five primary program areas: energy resources, transportation and power systems, environment, industry, and buildings. Projects in each of these program areas address technologies and mechanisms that affect the energy supply and meet the needs of end users. As a result, crosscutting areas such an environmental protection, waste management, energy product development, and renewable energy technologies are addressed in several programs. Programs in the R&D Program area are discussed in detail in Section 5.

Research and Development Program Evaluation Findings

Significant progress is being made by the Research & Development portfolio. The R&D portfolio has led to the construction of renewable energy generation amounting to 106 GWh per year and 9.8 MW. Electricity savings of more than 100 GWh per year are accruing from on-site generation installed through the DG-CHP Demonstration Program.

Across the programs, a number of long-term goals were set for key metrics such as: the number of solicitations, studies, and projects; the number of workshops; the number of companies doing business in New York; new products developed and launched; and other important knowledge creation, information dissemination, and commercialization progress metrics. Overall, the programs are performing well with respect to these goals. Results of each program’s progress toward its stated goals are shown in table format in Section 5. Many of these goals are qualitative in nature. However, some key areas of progress in the past 18 months include the following:

• Under the Public Benefit Power Transmission and Distribution Research Program, 15 projects have been approved to provide 14 companies nearly $6 million to pursue development of advanced technologies that will improve the efficiency and delivery of power for electric customers across the state.

• The Clean Energy Infrastructure Program has supported 12 companies in their efforts to expand renewable business networks.

• Six solicitations have been issued that included EMEP funding. These solicitations focused on sequestration, impacts of renewable energy, ecosystems, and air quality.

• A total of 24 cost-shared demonstration projects were selected for funding under the Industrial Process & Product Innovation Program.

• Four solicitations were completed under the Next Generation and Emerging Technologies Program.

Longer-term, cumulative progress includes the following highlights:

• Under the DG-CHP Demonstration Program, 45 systems are now operational, representing $21.8 million in program funding and $81.3 million in total system costs.

• The Electric Transportation Program’s Truck Stop Electrification Project, developed infrastructure technology, sponsored initial demonstrations and created a New York-based business that allows long haul trucks to eliminate sleeper cab engine idling during mandatory rest periods. Systems developed for the program are currently being sold nationally and are eligible for State and federal incentives.

Executive Summary

ES-16

Follow Up on Evaluation Recommendations

As appropriate during the course of their work activities, NYSERDA’s evaluation contractors often put forth recommendations for programmatic improvements. These recommendations are typically discussed with program staff and included in the evaluation contractors’ final reports to NYSERDA. In past evaluation cycles (2004, 2005, and 2006), NYSERDA has worked with the process evaluation team to review recommendations made by all evaluation contractors, and assess the extent to which those recommendations have been acted upon in some manner.15 Although it is not expected that every recommendation will be acted upon, NYSERDA’s evaluation team seeks to ensure that the recommendations are actionable and are considered by program staff.

Over the past year (2007), in response to requests by key stakeholders including the SBC Advisory Group, NYSERDA’s evaluation staff has made a significant effort to formalize an internal process for tracking response to and implementation of evaluation contractor recommendations for program improvement. As a new addition to this year’s report, sections on the following ten programs contain a discussion detailing recommendations made by evaluation contractors during the most recent evaluation cycle, and program staff’s responses/actions: Peak Load Management, Enhanced Commercial/Industrial Performance, Business Partners, High Performance New Buildings, FlexTech/Technical Assistance, Home Performance with ENERGY STAR®, ENERGY STAR Labeled Homes, Multifamily Building Performance, EmPower, and the Clean Energy Initiative. These programs were selected because each had a recently completed evaluation that included programmatic recommendations.16 Overall, this formal and systematic recommendation tracking process has resulted in greater use of the knowledge gained from the evaluation work, and longer term tracking of programmatic changes will determine whether the recommended changes led to the expected outcomes and improvements. As additional program evaluations are completed, any resulting recommendations will also be tracked in this manner. Furthermore, recommendations already reviewed in prior evaluation cycles but not yet acted upon may be revisited in the future with program staff if relevant.

15 NYSERDA, New York Energy $martSM Program Evaluation and Status Report – Year Ending December 31, 2006, March 2007. 16 Not all evaluations include recommendations, and not all programs are evaluated during a given annual cycle. In 2007, Market Characterization, Assessment, and Causality (MCAC) studies were also completed on Smart Equipment Choices and Market Support. However, these studies did not include recommendations.

1-1

1

Introduction and Public Policy Context

1.1 Introduction

This report updates progress made to date in implementing the New York Energy $martSM Public Benefits Program (Program). Progress is reported for Program activities completed through December 31, 2007.1 The report was prepared jointly by New York State Energy Research and Development Authority (NYSERDA) staff and a team of third-party evaluation contractors, in accordance with the Memorandum of Understanding (MOU)2 between NYSERDA, the New York State Department of Public Service (DPS), and the New York State Public Service Commission (PSC). This report was prepared on behalf of the System Benefits Charge Advisory Group3 (Advisory Group), which serves as the Independent Program Evaluator as per the MOU. The Advisory Group was provided a draft report and met to discuss the draft and review the findings of the evaluation contractors. Evaluation contractors presented their work and research findings to the Advisory Group. Feedback and comments received on the draft report were incorporated into this final report. The SBC Advisory Group submits this report to the PSC in fulfillment of its responsibilities under the terms of the MOU.

The Advisory Group and DPS were actively involved in selecting the evaluation contractors who were retained through NYSERDA’s competitive solicitation process and in planning the evaluation activities, including apportioning the evaluation budget among the contractors and identifying the programs to be included in the evaluation. All evaluation contract awards were made through NYSERDA’s competitive solicitation process. The Advisory Group and DPS were represented on all Technical Evaluation Panels that were convened to review proposals and recommend contract awards. Advisory Group members had the opportunity to review and comment on individual evaluation contractor work plans and meet with the members of each contractor’s team as they deemed necessary and appropriate.

In 2007, NYSERDA developed a formal Energy Public Benefits Program Evaluation Plan4 (Plan) to serve as an overarching guidance document for evaluating the programs it administers, including the New

1 Previous annual reports were issued in September 2000, January 2002, May 2003, May 2004, May 2005, May 2006, and March 2007. Each report presents cumulative results from the Program’s inception on July 1, 1998. Reports are available at www.nyserda.org and by request. 2 Memorandum of Understanding between the New York State Public Service Commission, New York State Department of Public Service, and New York State Energy Research and Development Authority, March 11, 1998, revised December 6, 2001. 3 The Advisory Group consists of 24 individuals representing varied interests, including utilities, business and environmental groups, energy service companies, community organizations, professional and trade associations, and national energy efficiency and energy research and development (R&D) organizations. 4 NYSERDA, NYSERDA Energy Public Benefits Program Evaluation Plan, December 2007.


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York Energy $martSM Program. The draft Plan was provided to the Advisory Group and DPS staff, and their comments were incorporated into the final Plan. Work undertaken to complete this report was conducted in accordance with the evaluation framework and model documented in the Plan.

1.2 Public Policy Context

The System Benefits Charge (SBC) Program administered by NYSERDA as the New York Energy $martSM Program, was initiated in 1998 by order of the PSC5 and has included three funding cycles.6 The New York Energy $martSM Program (Program) portfolio consists of initiatives promoting energy efficiency, including both permanent efficiency reductions as well as peak demand management; facilitating renewable energy infrastructure development; providing energy services to low-income New Yorkers; and conducting research, development, and demonstration of promising new products and technologies. The Program provides a myriad of services, and includes the dissemination of information to increase consumer energy awareness, marketing of programs and services, provision of financial incentives to spur customer and market investment in energy efficiency and demand management, development and testing of new products, commercializing new technologies, and gathering data and information.

The New York Energy $martSM Program is currently in its third funding cycle. Each funding cycle, and the Program’s evolution over time, is described below.

First Funding Cycle (1998 – 2001)

• June 1998 through June 2001. During this three-year period, NYSERDA’s administration of the Program was begun with emphasis on designing programs, conducting outreach, and offering technical and financial assistance to customers and market allies to fully deploy programs. Programs were offered to all customers paying the SBC. During this period, NYSERDA administered approximately $58 million per year in SBC funding.

Second Funding Cycle (2001 – 2006)

• July 2001 through December 2002. During this five-year period, NYSERDA was provided approximately $147 million per year to continue and expand upon its current program offerings. Also during this period, the New York Energy $martSM Program’s implementation activities were greatly accelerated as committed program funding more than doubled in the first 18-month period, going from less than $300 million to more than $600 million. The rapid increase in program funding commitments was a direct result of program design, outreach, and marketing efforts introduced by NYSERDA during the first three years of the Program. NYSERDA’s early efforts were designed to create a market capacity and capability to deliver energy efficiency and related services. Once created, Program activities could be readily accelerated, as partnerships were created with market allies, marketing and general awareness campaigns had succeeded in stimulating demand for services, and the market infrastructure was in place to deliver such services.

5 Case 94-E-1052, et al., In the Matter of Competitive Opportunities Regarding Electric Service, Opinion 98-3, issued January 30, 1998. 6 The most recent cycle was initiated with the New York State Public Service Commission in Case 05-M-0900, In the Matter of the System Benefits Charge III, Order Continuing the System Benefits Charge (SBC) and the SBC-funded Public Benefit Programs, issued and effective December 21, 2005.

13BDesign and Conduct of the New York Energy $martSM Program

1-3

• January 2003 through December 2004. As the New York Energy $martSM Program evolved, NYSERDA selectively modified its funding commitments across the many programs offered. For example, funding modifications were required because some markets, such as residential room air conditioners, were being transformed, and product incentive offerings could be reduced. Also, because the market and demand for energy efficiency services in New York is extensive, the Program needed to accept fewer applications to preserve funds through June 2006, when the second funding cycle for the Program was scheduled to end.

• January 2005 through June 2006. NYSERDA continued to assess gaps and opportunities with respect to energy efficiency, low-income services, and R&D programs as a means to assist policy makers in deciding the future of funding for energy-related public benefits programs in the State.

Third Funding Cycle (2006 –2011)

• July 2006 through June 2011. The PSC extended the New York Energy $martSM Program for another five years, increasing funding from approximately $150 million to $175 million annually. The continuation and expansion of the Program is designed to help maintain momentum for the State’s efforts to develop competitive markets for energy efficiency; demand management (including peak load reduction); outreach and education services; research, development, and demonstration; and low-income services and to provide direct economic and environmental benefits to New Yorkers. The extended program will continue to address market barriers to the competitive procurement of these services.

1.3 Design and Conduct of the New York Energy $martSM Program

In order to successfully pursue these diverse activities, NYSERDA employs differing strategies. Representative strategies are presented in broad terms below. Many programs use a combination of these strategies. Discussions of individual activities are presented throughout this evaluation report.

• Market transformation programs promote energy efficiency by developing markets and permanently changing energy-related decisions by residents, retailers, and manufacturers. Creating an energy efficiency “ethic” is critical if New Yorkers are to improve energy efficiency without sacrificing energy services – making decisions based on life-cycle economic benefits and costs, and sustainable environmental stewardship. Market transformation programs also promote the development of the energy-efficiency supply infrastructure through training, certification, marketing, and other means.

• Energy efficiency programs identify energy savings opportunities and install energy-efficient products and technologies in small homes, multifamily buildings, commercial buildings, industrial plants, and other facilities.

• Load-management programs allow energy users to shift and reduce energy use from on-peak to off-peak periods – thereby reducing customers’ energy bills, and improving the reliability of the electric system.7

7 Reducing peak demand by shifting and reducing energy use from on-peak to off-peak periods increases energy productivity but may not reduce energy use or improve energy efficiency. If the electric load is shifted to an off-peak period and the same overall amount of energy is used, costs to consumers may be less, thus improving energy productivity, but the total quantity of energy used will be unchanged.


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• Low-income services make energy more affordable for low-income households by installing energy efficiency improvements and by disseminating energy information to homeowners, building owners and operators, and contractors.

• Research, Development and Demonstration (RD&D) programs develop alternative energy resources and technologies, deploy distributed generation and combined heat and power systems, develop and test new technologies and products, and collect and evaluate data for use in environmental analysis and in support of policy decision making. RD&D programs emphasize innovation and support projects and activities that provide opportunities for breakthroughs that might significantly improve existing technologies, products, and markets.

Given the diversity of program purposes, services, and goals, different evaluation methods and protocols must be applied to each of the program offerings. According to needs and available resources, the following major evaluation functions are applied to the New York Energy $martSM programs by NYSERDA staff and evaluation contractors: impact assessment, including benefit/cost analysis; market characterization and assessment, including program logic development; and process evaluation. Additional evaluation analyses, such as macroeconomic impact analysis, are conducted at the portfolio level.

1.4 Organization of the Report

This annual report describes how the New York Energy $martSM Program is contributing to meeting its public policy goals. This report is divided into the following sections:

Executive Summary

Section 1 - Introduction and Public Policy Context

Section 2 – Portfolio-Level Reporting

Section 3 – Commercial and Industrial Programs

Section 4 – Residential and Low-Income Programs

Section 5 - Research and Development Programs

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2

Portfolio-Level Reporting

The New York Energy $martSM Program is a portfolio of numerous program initiatives that individually and collectively help the State make strides toward achieving its energy policy goals. This section presents findings and results for the portfolio of New York Energy $martSM programs. More specific findings and results from evaluations of individual program initiatives are presented separately in Sections 3, 4 and 5.

2.1 Budget and Spending Status

This financial overview of the New York Energy $mart ProgramSM presents budget and funding status from 1998 through December 31, 2007. The thirteen year budget is approximately $1.87 billion, of which $1.68 billion is allocated to four major program areas – Commercial/Industrial, Residential, Low-Income, and Research and Development (R&D) – and a general awareness campaign. The budgets for these program areas are presented in Table 2-1 along with the costs for program administration, program evaluation, the Environment Disclosure Program1, and the New York State Cost Recovery Fee2. Figure 2-1 and Figure 2-2 present graphic representations of ratepayer System Benefits Charge (SBC) contributions.

1 This program provides electricity commodity suppliers with data for informing customers about the fuel mix and associated environmental impacts of their electricity sources. 2 The New York State Cost Recovery Fee is assessed for services to public authorities. The fee is determined by the New York State Division of Budget and imposed and collected by the Department of Taxation and Finance.


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Table 2-1. New York Energy $martSM Program Budget ($ million)

Budget 1

SBC I & SBC II 2 SBC III 3 Total Budget % of Program Area Budget

% of Total Budget

Commercial/Industrial $247.1 $386.8 634.0 37.6% 33.8%

Residential 165.4 147.3 312.8 18.6% 16.7%

Low-Income 86.6 232.0 318.6 18.9% 17.0%

Research and Development 105.9 282.5 388.3 23.1% 20.7%

General Awareness4 (Marketing) 15.9 15.2 31.0 1.8% 1.7%

Program Areas Total $620.9 $1,063.8 $1,684.6 100.0% 89.9%

Other Costs

Program Administration 59.8 68.4 128.3 - 6.8%

Metrics and Evaluation 14.5 19.9 34.4 - 1.8%

Environmental Disclosure 0.8 1.1 1.9 - 0.1%

NYS Cost Recovery Fee5 9.2 16.2 25.4 - 1.4%

Other Costs Total $ 84.3 $105.7 $190.0 - 10.1%

Total New York Energy $martSM $705.2 $1,169.5 $ 1,874.7 - 100.0% 1 Reflects carryover in funds and reallocation as approved by the Public Service Commission in 2007. 2 SBC I: July 1, 1998 through June 30, 2001; SBC II: July 1, 2001 through June 30, 2006. 3 SBC III: July 1, 2006 through June 30, 2011. 4 General Awareness previously included in Residential Program Area. 5 The New York State Cost Recovery Fee is assessed for services to public authorities. The fee is determined by the New York State Division of Budget and imposed and collected by the Department of Taxation and Finance.


Source: NYSERDA

15BBudget and Spending Status

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Figure 2-1. New York Energy $martSM Ratepayer Contributions by Utility3 Service Area

Ratepayer SBC ContributionsProgram Inception (1998) through 2011

Nat'l Grid25.7%

NYSEG13.1%

Con Edison49.9%

CHG&E3.9%

RG&E4.0%

O&R3.3%

Source : NYSERDATotals may not sum due to rounding.

Figure 2-2. New York Energy $martSM Ratepayer Contributions by Sector

Ratepayer Contributions Through 2007

Residential39.1%

Commercial45.4%

Industrial15.5%


2.1.1 Financial Status and Funding Allocation

Table 2-2 shows the financial status of New York Energy $martSM through 2007. Spending relative to the thirteen-year budget is: Commercial/Industrial 48.6%; Residential 65.6%; Low-Income 43.3%; and R&D 37.2%. Figure 2-3 provides historical information on program funding and spending.

3 The utility service areas: Central Hudson Gas and Electric, Inc. (CHG&E), Consolidated Edison Company of New York, Inc. (Con Edison), National Grid (Nat’l Grid), New York State Electric and Gas Corporation (NYSEG), Orange and Rockland Utilities, Inc. (O&R), Rochester Gas and Electric Corporation (RG&E).


2-4

Table 2-2. Financial Status of New York Energy $martSM Program ($ million) through 2007

Funds Spent

Total 13-

Year Budget 1

SBC I &

SBC II1,2

SBC

III 3

Total Spent &

% of Budget

Encumbered Funds4


Committed Funds5

% of Budget Committed

Program Areas

Commercial/Industrial 634.0 247.1 61.2 308.4

48.6%

406.4

64.1%

453.9

71.6%

Residential5 312.8 165.4 39.8 205.3

65.6%

224.7

71.8%

228.2

73.0%

Low-Income 318.6 86.6 51.4 137.9

43.3%

179.1

56.2%

180.0

56.5%

Research and Development 388.3 105.9 38.7 144.6

37.2%

211.5

54.5%

241.9

62.3%

General Awareness6 (Marketing) 31.0 15.9 3.4

19.3

62.3%

19.3

62.3%

19.3

62.3%

Program Areas Total $1,684.6 $620.9 $194.6 $815.5

48.4%

$1,041.0

61.8%

$1,123.4

66.7%

Other Costs

Program Administration 128.3 59.8 19.3 79.1

61.7%

79.1

61.7%

79.1

61.7%

Metrics and Evaluation 34.4 14.5 3.8 18.3

53.2%

23.1

67.2%

23.1

67.2%

Environmental Disclosure 1.9 0.8 -0.75 0.05

2.5%

0.05

2.6%

0.05

2.6%

NYS Cost Recovery Fee 25.4 9.2 3.5 12.7

50.0%

12.7

50.0%

12.7

50.0%

Other Costs Total $190.0 $84.3 25.8 $110.1

58.0%

$115.0

60.5%

115.0

60.5%

Total New York Energy SmartSM $1,874.7 $705.2 $220.4

$925.6

49.4%

$1,156.0

61.7%

$1,238.4

66.1% 1 Reflects carryover in funds and reallocation as approved by the Public Service Commission in 2007. 2 SBC I: July 1, 1998 through June 30, 2001; SBC II: July 1, 2001 through June 30, 2006. 3 SBC III: July 1, 2006 through June 30, 2011. 4 Encumbered funds associated with signed contracts and purchase orders. 5 Committed funds associated with encumbered funds and pending contracts. 6 General Awareness previously included in Residential Program Area.

Totals may not sum exactly due to rounding. Source: NYSERDA


2-5

Figure 2-3. New York Energy $martSM Program Funding History and Activity December 1998 through December 2007

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

Dec 98 Dec 99 Dec 00 Dec 01 Dec 02 Dec 03 Dec 04 Dec 05 Dec 06 Dec 07

Dol

lars

in M

illio

ns

Spent (Invoiced) Remaining Under Contract Pending Cumulative Total Funding

Source: NYSERDA

Figure 2-4 shows the percentage of total portfolio spending in each utility territory through December 2007. For some utility territories, spending is currently higher than their SBC collections, and for others spending is currently lower than their SBC collections. Due to the statewide, open competitive nature of nearly all of the New York Energy $mart SM Program spending, NYSERDA processes applications and awards incentives without regard to where Program applicants may be located. That said, NYSERDA recognizes that a few imbalances exist between collections received from and spending returned to utility territories, and NYSERDA has taken action and is making further plans to correct this imbalance. For example, a New York City-wide process evaluation is underway to assess NYSERDA programs' design, outreach, delivery, and management in the context of the unique New York City market. Recommendations from the evaluation contractor conducting the study will be forthcoming later in 2008. NYSERDA has also taken steps to increase staffing in its New York City office in order to improve customer service and outreach, and is re-directing the focus of several programs, e.g., although the multifamily programs have historically had abut 70% of their participants in Con Edison service territory, the single family homes program, implemented on a region-by-region basis over time, has so far experienced most of its participation upstate, where it was first rolled out. Recent and ongoing growth of the service delivery infrastructure in the Con Edision service territory is expected to correct that imbalance over the next year or two. In future reports, NYSERDA will report on progress made toward achieving a better balance between service territory collections and spending.


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Figure 2-4. Total SBC Expenditures by Utility

Total SBC Expenditures by Utility

RG&E6.8%

CHGE4.3%

O&R2.0%

NYSEG13.6%

ConEd41.3%

NatGrid32.0%


2.1.2 Program Areas

Commercial/Industrial Program Area

Table 2-3 presents detailed budget and funding information for the Commercial/Industrial programs. Figure 2-5 and Figure 2-6 show C/I program spending by utility service area and sector, respectively.

Table 2-3. Commercial/Industrial Programs – Financial Status ($ million) through 2007

Budget 1 Funds Spent

Program SBC I

&

SBC II 2 SBC III3

Total Budget

SBC I &

SBC II 2

SBC III 3

Total Funds Spent

Encumbered Funds4


Committed Funds5

% of Budget

Committed

Peak Load Management 35.1 53.1 88.2 35.1 7.6 42.7

48.4%

60.6

68.7%

62.1

70.4%

Enhanced Commercial/ Industrial Performance 100.3 137.8 238.1 100.3 16.6

116.8

49.1%

151.3

63.5%

155.7

65.4%

New York Energy $martSM Business Partners 21.1 22.8 43.9 21.1 4.5

25.6

58.3%

28.2

64.2%

31.7

72.2%

Loan Fund and Financing6 12.3 13.0 25.3 12.3 8.9 21.2

83.8%

26.3

104.0%

26.5

104.7%

Energy Smart Focus 4.8 14.0 18.9 4.8 2.5 7.3

38.6%

10.3

54.5%

10.4

55.0%


2-7

High Performance New Buildings 53.1 111.3 164.4 53.1 17.7

70.8

43.1%

100.9

61.4%

137.9

83.9

FlexTech Technical Assistance 20.4 34.7 55.2 20.4 3.4

23.8

43.1%

28.8

52.2%

29.6

53.6%

Total Commercial & Industrial $247.1 $386.7 $634.0 $247.1 $61.2

$308.4

48.6%

$406.4

64.1%

$453.9

71.6% 1 Reflects carryover in funds and reallocation as approved by the Public Service Commission in 2007. 2 SBC I: July 1, 1998 through June 30, 2001; SBC II: July 1, 2001 through June 30, 2006.

3 SBC III: July 1, 2006 through June 30, 2011. 4 Encumbered funds associated with signed contracts and purchase orders. 5 Committed funds associated with encumbered funds and pending contracts. 6 NYSERDA will seek permission from DPS for reallocation of funds from within the Energy Efficiency Commercial/Industrial program area. Such intra-program reallocation would not require Public Service Commission approval.


Source: NYSERDA

Figure 2-5. C/I Funds Spent by Utility Service Area

Commercial / Industrial Through 2007

CHG&E4.7%

RG&E7.7%

O&R1.9%

NYSEG15.3%

Con Edison37.3%

Nat'l Grid32.9%

Source: NYSERDATotals may not sum due to rounding


2-8

Figure 2-6. C/I Funds Spent by Sector

Commercial / Industrial Through 2007

Industrial14.1%

Government11.6%

Commercial42.0%

Institutional24.7%

Multifamily3.9%

Others1.6% Not For Profit

2.1%Source: NYSERDATotals may not sum due to rounding.

Residential and Low-Income Program Areas

Table 2-4 presents detailed budget and funding information for the Residential and Low-Income programs. Figure 2-7 and Figure 2-8 show Residential program spending by utility service area and housing type, respectively. Figure 2-9 and Figure 2-10 provide the same information for the Low-Income programs.


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Table 2-4. Residential and Low-Income Programs - Financial Status ($ million) through 2007

Budget 1 Funds Spent

Program SBC I &

SBC II 2 SBC III 3

Total Budget

SBC I &

SBC II 2

SBC III 3

Total Funds Spent

Encumbered Funds4


Committed Funds5

% of Budget

Committed

Residential Programs

Single Family Home Performance 47.4 60.1 107.5 47.4 16.2

63.6

59.2%

68.0

63.3%

69.1

64.3%

Multifamily Building Performance 18.3 26.1 44.5 18.3 8.3

26.6

59.8%

33.7

75.7%

34.5

77.5%

Market Support Residential 96.5 52.3 148.9 96.5 12.8

109.3

73.4%

115.6

77.6%

116.8

78.4%

Communities and Education 3.2 8.8 11.9 3.2 2.6

5.8

48.3%

7.4

61.7%

7.8

65.5%

Subtotal Residential $165.4 $147.3 $312.8 $165.4 39.8 $205.3

65.6%

$224.7

71.8%

228.2

73.0%

Low-Income Programs

Single Family Home Performance 22.3 56.0 78.3 22.3 10.3

32.5

41.6%

35.3

45.1%

35.3

45.1%

Multifamily Building Performance 45.4 114.6 160.0 45.4 23.2

68.6

42.9%

104.0

65.0%

104.1

65.1%

EmPower New York 14.3 49.4 63.7 14.3 16.6 30.8

48.4%

32.7

51.4%

32.7

51.4%

Buying Strategies & Energy Awareness 4.7 11.9 16.6 4.7 1.3

6.0

36.1%

7.0

42.2%

7.9

47.6%

Subtotal Low-Income $86.6 $232.0 $318.6 $86.6 $51.4 $137.9

43.3%

$179.1

56.2%

$180.0

56.5%

TOTAL Residential and Low Income $252.0 $379.3 $631.4 $252.0 $91.2

$343.2

54.4%

$403.8

64.0%

$408.2

64.6% 1 Reflects carryover in funds and reallocation as approved by the Public Service Commission in 2007. 2 SBC I: July 1, 1998 through June 30, 2001; SBC II: July 1, 2001 through June 30, 2006. 3 SBC III: July 1, 2006 through June 30, 2011. 4 Encumbered funds associated with signed contracts and purchase orders. 5 Committed funds associated with encumbered funds and pending contracts.


Source: NYSERDA


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Figure 2-7. Residential Funds Spent by Utility Service Area

Residential Through 2007Nat'l Grid32.5%

Con Edison45.0%

RG&E7.2%

O&R1.8%

NYSEG10.8%

CHG&E2.6%Source: NYSERDA

Totals may not sum due to rounding.

Figure 2-8. Residential Funds Spent by Housing Type

Residential Through 2007Residential (1-4 units)

31.0%

Multifamily (5+ units)

12.6%

Both Types1

56.3%

1 Includes community coordination, marketing, and education effo rts.Source: NYSERDA


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Figure 2-9. Low-Income Funds Spent by Utility Service Area

Low-Income Through 2007

NYSEG14.0%

Nat'l Grid36.9%

Con Edison40.4% CHG&E

1.8%RG&E6.3%

O&R0.7%

Source: NYSERDATotals may not sum due to rounding.

Figure 2-10. Low-Income Funds Spent by Housing Type

Low-Income Through 2007

Low Income Residential (1-4

units)45.2%

Both1.6%

Low -Income Multifamily (5+

units)53.3%


Research, Development and Demonstration Program Area

Table 2-5 presents detailed budget and funding information for the Research, Development and Demonstration (RD&D or R&D) programs.

Figure 2-11 and Figure 2-12 show R&D Program spending by utility service area and technology.


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Table 2-5. Research & Development Programs – Financial Status ($ million) through 2007

Budget1 Funds Spent

Program SBC I &

SBC II 2 SBC III3 Total

Budget

SBC I &

SBC II2

SBC III3

Total Funds Spent

% Funds Spent

Encumbered Funds4


Committed Funds5

% of Budget

Committed

Public Benefit Power Transmission and Distribution

0.0 10.0 10.0 0.0 0.04 0.04

0.4%

0.2

2.0%

3.6

36.0%

End Use Renewable Energy Market6 19.0 28.4 47.5 19.0 17.4

36.4

76.8%

48.2

101.5%

51.5

108.9%

Clean Energy Infrastructure 0.0 43.8 43.8 0.0 0.7 0.7

1.7%

3.5

8.0%

4.9

11.3%

Distributed Energy Resources: Products and Demonstrations

34.0 115.3 149.2 34.0 12.0 46.0

30.8%

80.5

54.0%

91.4

61.3%

Demand Response and Innovative Research 0.0 10.0 10.0 0.0 0.0 0.0

0.01

0.1%

0.01

0.1%

Electric Transportation 0.0 5.0 5.0 0.0 0.4 0.4

8.0%

0.9

18.0%

2.7

54.0%

Environmental Monitoring, Evaluation, and Protection 17.7 21.3 39.1 17.7 2.8

20.6

52.7%

25.4

65.0%

27.0

69.1%

Industrial Process & Product Innovation Program 0.0 15.0 15.0 0.0 0.2

0.2

1.3%

2.1

14.0%

3.1

20.7%

Next Generation and Emerging Technologies 18.3 24.5 42.7 18.3 3.0

21.3

49.9%

28.6

67.0%

34.6

81.0%

Wholesale Renewable Energy Market 16.5 6.3 22.7 16.5 1.7

18.2

80.2%

21.3

93.8

22.3

98.2%

Other7 0.4 0.0 0.4 0.4 0.0 0.4

100%

0.4

100%

0.4

100.0%

Regional Greenhouse Gas Initiative8 0.0 3.0 3.0 0.0 0.3

0.3

10%

0.3

10.0%

0.3

10.0%

TOTAL Research & Development $105.9 $282.5 $388.3 105.9 $38.7

$144.6

37.2%

$211.5

54.5%

$241.9

62.3% 1 Reflects carryover in funds and reallocation as approved by the Public Service Commission in 2007. 2 SBC I: July 1, 1998 through June 30, 2001; SBC II: July 1, 2001 through June 30, 2006.

3 SBC III: July 1, 2006 through June 30, 2011. 4 Encumbered funds associated with signed contracts and purchase orders. 5 Committed funds associated with encumbered funds and pending contracts. 6 Over committed amounts will be reclassified to the approved Renewable Portfolio Standard Customer Sited Tier budget. 7 Other: Projects transferred from ESEERCO (Empire State Electric Energy Research Corp.). Program closed. 8 As directed by the New York State Public Service Commission in its “Order Directing Reallocation to Fund the Regional Greenhouse Gas Initiative, Inc.”, issued and effective August 28, 2007 in Case 05-M0900.

Totals may not sum due to rounding.

Source: NYSERDA

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Figure 2-11. R&D Funds Spent by Utility Service Area

R&D Through 2007

CHG&E8.3%

RG&E4.7%

O&R3.8%

NYSEG13.7%

Con Edison43.7%

Nat'l Grid25.8%


Figure 2-12. R&D Funds Spent by Technology

R&D Through 2007Emvironmental

Monitoring14.3%

Green Pow er12.6%

Pow er Systems/Energy

Storage4.1%Other

2.2%

On-Site Renew ables

25.7%

Emerging Technologies

14.8%

DG/CHP26.3%



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2.2 Portfolio Level Findings

This section discusses evaluation activities and portfolio level findings related to progress toward overarching public policy goals, energy savings achievements, and economic analyses including macroeconomic impacts, and overall cost-effectiveness. These findings are compiled based on the cumulative work of NYSERDA and its evaluation contractor teams over the past several years.

2.2.1 2007 Evaluation Activities

Evaluation activities completed this year include:

• Program logic models for the Commercial/Industrial, Residential, and Low-Income sectors as well as the R&D portfolio

• Program logic models covering the following 16 individual programs: Peak Load Management; Enhanced Commercial/Industrial Performance; Business Partners; Loan Fund and Financing; New York Energy $martSM Focus; Market Support; Buying Strategies and Energy Awareness; Public Benefit Power T&D Research, Clean Energy Infrastructure; DG-CHP Demonstration; Demand Response and Innovative Rate Research; Electric Transportation; Industrial Research, Development and Demonstration; Municipal Water and Wastewater Efficiency; and Next Generation and Emerging Technologies; and General Awareness

• Year-end impact evaluation database reviews for the following six programs: Peak Load Management; Enhanced Commercial/Industrial Performance; FlexTech/Technical Assistance; Multifamily Building Performance (Assisted Multifamily component); Clean Energy Infrastructure; and DG-CHP Demonstration

• Measurement & Verification studies for Peak Load Management; Enhanced Commercial/Industrial Performance; Small Commercial Lighting; Home Performance; EmPower New York; and Demand Response and Innovative Rate Research

• Market Characterization and Assessment studies on both High Performance New Buildings and Home Performance with ENERGY STAR (partially complete)

• Process evaluations on the Assisted Multifamily Program; the full Multifamily Building Performance Program; Communities and Education; EmPower New York; End Use Renewables; and the PV program element of Clean Energy Infrastructure

• A phase-one R&D portfolio impact evaluation

• A non-participant market effects study of the commercial/industrial existing buildings market

• A New York oversample to the 2006 National ENERGY STAR survey

• A study of the market for residential CFLs and fluorescent fixtures, including an update of the unit sales and energy savings credited to NYSERDA’s program efforts

• A study of the market for ENERGY STAR appliances, including an update of the unit sales and energy savings credited to NYSERDA’s program efforts


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• Non-energy impact updates for Enhanced Commercial/Industrial Performance and Small Commercial Lighting

2.2.2 Evaluation Activities Nearing Completion

NYSERDA expects to complete the following evaluation activities for inclusion in the next report (first quarter 2008):

• Impact evaluation of the largest energy-saving projects across the portfolio of programs (includes projects in the PLMP, ECIPP, High Performance New Buildings, FlexTech/TA, and DG-CHP programs), and accompanying benefit/cost updates;

• Year-end impact evaluation database reviews for the Loan Fund and Financing, Small Commercial Lighting, EmPower, and Home Performance with ENERGY STAR programs;

• Market Characterization and Assessment studies on both High Performance New Buildings and Home Performance with ENERGY STAR (fully complete);

• Prospective benefits studies on both High Performance New Buildings and Home Performance with ENERGY STAR;

• Market effects for high-performance T-8 lighting;

• Loan Fund and Financing process evaluation; and

• Update of the market-based savings estimate for the Market Support Program.

2.2.3 Progress Toward Policy Goals

This section presents the cumulative progress of the New York Energy $martSM Program toward meeting the four overarching public policy goals set forth by the PSC.4 Overall, the Program is making good progress toward achieving the long term goals. The goals and high-level progress through December 31, 2007 are shown in Table 2-6. Substantial additional program-specific and sector-level accomplishments have been documented and are contributing to sustainable progress toward these important overarching public policy goals.

4 Case 94-E-0952 et al., In the Matter of Competitive Opportunities Regarding Electric Service, Staff Proposal for the Extension of the System Benefits Charge (SBC) and the SBC-funded Public Benefits Program, August 30, 2005.


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Table 2-6. New York Energy $martSM Goals and Progress through December 31, 2007


The New York Energy $martSM Program has improved system-wide reliability and peak demand reduction, enabling 550 MW of callable load reduction and installing efficiency measures that permanently reduce peak demand by another 650 MW.

Renewable energy programs have reduced peak demand on the electric grid by an additional 9.8 MW.

The New York Energy $martSM Program has led to the implementation of measures saving 3,057 GWh per year. Of this, over 100 GWh of electricity is being generated annually from DG-CHP systems.

The New York Energy $martSM Program has led to the installation of wind and photovoltaic (PV) technologies, which provide 106 GWh of clean electricity generation per year. This includes the installation of 865 PV and 15 small wind systems.

Over the past year, the number of operational DG-CHP systems has increased from 28 to 45.

Improve New York's energy system reliability and security by reducing energy demand and increasing energy efficiency, supporting innovative transmission and distribution technologies that have broad application, and enabling fuel diversity, including renewable resources.

Under the Public Benefit Power Transmission and Distribution Program, 15 projects have been approved to provide 14 companies nearly $6 million to pursue development of advanced technologies that will improve the efficiency and delivery of power for electric customers across the State.

The New York Energy $martSM Program has saved participating customers nearly $570 million in annual energy costs.

More than 58,000 eligible New York low-income customers received direct assistance through the New York Energy $martSM programs, resulting in $220/year in average customer energy bill savings for this underserved population.

Reduce the energy cost burden of New Yorkers by offering energy users, particularly the State's lowest income households, services that moderate the effects of energy price increases and volatility and provide access to cost-effective energy efficiency options. The New York Energy $martSM portfolio has achieved a benefit/cost ratio of

2.1 under the most conservative Total Resource Cost Test scenario.

The annual reduction of emissions resulting from New York Energy $martSM Programs’ energy savings is 2,570 tons of nitrogen oxide (NOX), 4,720 tons of sulfur dioxide (SO2), and 2.0 million tons of carbon dioxide (CO2).

Between 2003 and 2007, the number of PV and small wind installers participating in the New York Energy $martSM Program has increased from 14 to 143.

Mitigate the environmental and health impacts of energy use by increasing energy efficiency, encouraging the development of support services for renewable energy resources, and optimizing the energy performance of buildings and products.

The New York Energy $martSM Program has helped optimize energy performance: in 797 new commercial buildings, in more than 11,000 new homes, in more than 18,000 existing homes, and through more than 11,700 energy efficiency projects in existing commercial/industrial buildings, including technical studies, measure replacement, and reduced-interest financing.


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Averaged over a 29-year analysis period, the New York Energy $martSM Program creates and sustains on average more than 7,200 jobs, increases labor income by $334 million per year, increases total output by $503 million per year, and increases value added by $241 million per year in the State.


Create economic opportunity and promote economic well-being by supporting emerging energy technologies, fostering competition, improving productivity, stimulating the growth of New York energy businesses, and helping to meet future energy needs through efficiency and innovation. Private investment in combined heat and power has increased in New York. The

total cost for all projects encumbered through year-end 2007 is $290 million, 84% of which represents funds from project participants.

2.2.4 Reported and Achieved Energy, Demand and Fuel Savings

Electricity, peak demand, and fuel savings included in this report have been reviewed and adjusted by NYSERDA’s independent impact evaluation contractor firms. The impact assessment work includes numerous activities to verify and attribute reported savings to the New York Energy $martSM Program. The major steps in impact assessment are the determination of gross and net savings, as described below.

• Gross Savings: In addition to reviewing program databases for accuracy with regard to energy, fuel and peak demand savings, NYSERDA’s evaluation contractors also use site visits, file reviews, metering, and other methods to determine how much of the program-reported savings are actually being realized. A realization rate is applied to the program-reported savings to determine gross savings. Realization rates can be above, below, or equal to 1.0 depending on whether the evaluation identifies a need to adjust program-reported savings up or down.

• Net Savings: Gross savings are further adjusted to account for attribution or causality. Simply put, this analysis determines: the amount of the claimed gross savings that would have occurred without the program (i.e., freeridership or naturally-occurring adoption); and the amount of additional savings that have accrued outside of, but due to, the program (i.e., spillover, or market effects). These effects are primarily ascertained through survey-based, self-report methods with respondent groups including participating and non-participating end-users and market actors. However, in some cases where adequate sales, shipment, market share, or other similar data are available, this information can be used to perform market-based estimates of net savings. A net-to-gross ratio (incorporating both freeridership and spillover effects) is applied to the gross savings to ensure the program is only claiming savings that would not have occurred in its absence.

Summary of Portfolio-Level Achievements

The energy, peak demand, and fuel savings from the New York Energy $martSM Program portfolio from 1998 through December 2007 are presented in Table 2-7. Electricity savings, clean energy generation, peak demand reduction, and fuel savings values shown in this table for 2007 are the sum of all the program-level accomplishments presented in Sections 4, 5, and 6 of this report. The rows that follow these entries in Table 2-7 are derived based on the electricity and other fuel savings. By year-end 2007, the portfolio had achieved 3,060 GWh of cumulative annual electricity savings, and more than 4.6 million MMBtu of natural gas, fuel oil and other fuel savings. The New York Energy $martSM portfolio has reduced peak demand by 1,200 MW.

The reductions in energy use translate into:


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• $570 million in annual energy bill savings (electric, oil, and natural gas) in 2007 for New York consumers,

• 2,570 tons of annual nitrogen oxide (NOx) emission reductions,

• 4,720 tons of annual sulfur dioxide (SO2) emission reductions, and

• 2.0 million tons of annual carbon dioxide (CO2) emission reductions, which is equivalent to removing 400,000 automobiles from New York’s roadways.

Table 2-7. Cumulative Benefits from Installed Measures


2004

Through Year-End

2005

Through Year-End

2006

Through Year-End

20073

Electricity Savings from Energy Efficiency and DG-CHP (Annual GWh) 1,400 1,950 2,350 3,060

Renewable Energy Generation (Annual GWh) 102 103 105 106

Peak Demand Reduction (MW) 860 1,040 1,113 1,200a

Permanent Measures (MW) 325 445 495 650

Curtailable1 535 595 618 550

Net Fuel Savings (Annual MMBtu) 2,600,000 4,000,000 4,049,000 4,660,000

Annual Energy Bill Savings to Participating Customers ($ Million) $195 $275 $330 $570

Jobs Created and Retained per Year2 2,500 3,100 3,700 4,700

NOx Emissions Reductions (Annual Tons) 1,280 1,750 2,060 2,570

SO2 Emissions Reductions (Annual Tons) 2,320 3,170 3,800 4,720

CO2 Emissions Reductions (Annual Tons) 1,000,000 1,400,000 1,600,000 2,000,000

Equivalent number of cars removed from NY roadways 200,000 275,000 320,000 400,000

a Does not include 9.8 MW of renewable energy generation capacity. 1 Curtailable MW have decreased due to a reassessment of the impact of the Enabling Technologies program. MW enabled under the SBC2 program Enabling Technologies for Price Responsive Load were not required to persist beyond the period of the contract. As such, the available MW have steadily declined since the program’s close. 2 Figures in this row represent the average number of jobs created and retained through year-end. Results from 2004 and 2005 have been restated based on new analysis conducted in 2006. 3 Savings for the New York Energy $martSM Products Program are estimated based on market data, survey research, and deemed savings values. The last update, completed and applied in Quarter 1 2007, added electricity, demand, and fuel savings for both 2005 and 2006. Year-end savings for 2005 and 2006 were not back-adjusted. Incremental electricity savings additions for these years are as follows: 28,756 MWh for appliances and 175,710 MWh for lighting in 2005; and 30,280 MWh for appliances and 190,721 MWh for lighting in 2006. The addition of 2005 and 2006 savings in Quarter 1 2007 also impact bill savings and emission reduction estimates reported in this table. The cumulative annual savings do not yet reflect additions for 2007 from the New York Energy $martSM Products Program. Additions for 2007 will be applied, to the extent possible, in the Quarter 1 2008 report.


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Electric and Peak Demand Savings by Utility Service Area

Figure 2-13 and Figure 2-14, respectively, show electricity and demand savings by utility service area. The National Grid (38%) and Con Edison (36%) service areas show the highest percentages of electricity savings. The same service areas, Con Edison (38%) and National Grid (33%), are also seeing the highest percentages of the overall demand reductions. Both of these figures are based on the cumulative annual savings achieved through the end of 2007. For certain market transformation and informational programs representing 42% of the portfolio electricity savings and 21% of the demand reductions, savings were apportioned to utility areas based on incentive dollars.

Figure 2-13. Electricity Savings by Utility through December 2007

Con Edison36%

NYSEG16%

O&R2%

RG&E6%

Central Hudson

2%

National Grid38%


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Figure 2-14. Demand Savings by Utility (includes callable MW) through December 2007

Con Edison38%

National Grid33%

RG&E7%

O&R2%

NYSEG17%

Central Hudson

3%

Energy Savings and Peak Demand Reduction by Program

Table 2-8 shows the cumulative annual electricity savings, demand reductions, and other fuel savings from each program. Entries for Renewable Energy Production represent clean generation rather than reductions in use.


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Table 2-8. Adjusted Cumulative Annual Savings by Program through December 2007

Adjusted Cumulative Annual Savings Program

GWh MW MMBtu

Peak Load Management: Permanent 141.0 54.0 N/A

Peak Load Management: Callable N/A 439.1 N/A

Enhanced Commercial/ Industrial Performance 960.3 164.7 5,648

New York Energy $martSM Business Partners 70.1 17.0 N/A

New York Energy $martSM Loan Fund and Financing 89.6 46.8 561,322

New York Energy $martSM Focus 0 0 N/A

High Performance New Buildings 327.6 75.2 N/A

Flex Tech Technical Assistance: Permanent 797.0 148.2 3,217,840

Flex Tech Technical Assistance: Curtailable N/A 11.1 N/A

C/I Sector Overlap Removed 171.4 38.3 370,004

Subtotal Commercial/Industrial 2,214.2 917.7 3,414,806

Single Family Home Performance 31.8 6.8 1,291,158

Multifamily Building Performance 37.4 26.7 183,667

Market Support Program 647.0 121.6 420,464

EmPower New York Program 34.2 4.9 125,136

Subtotal Residential and Low Income 750.3 160.1 2,020,425

DG-CHP Demonstration Program 101.9 23.7 -778,866a

Demand Response and Innovative Rate Research N/A 99.0 N/A

Renewable Energy Production 106.2 9.8 N/A

Subtotal R&D 199.1 130.8 -778,866

Cross Sector Overlap Removed 8.1 1.7 N/A

NYE$ Portfolio 3,163.7b 1,208.6c 4,656,365

N/A – not applicable, the energy source is not reduced for the particular program. a Because the electricity saved by the DG-CHP projects replaces electricity formerly purchased from the grid, the program has reduced fuel used at central generating stations, for a net decrease statewide due to greater efficiency of the DG-CHP systems at sites where imported fuel is used. The fuel avoided at the central generating plant is determined from the electricity generated by the DG-CHP installations. Furthermore, at additional projects such as waste water treatment plants, electricity generation is powered fully or partially by digester gas produced on site. Such fuel switching achieves natural gas conservation above and beyond what is achieved through efficiency alone. b This sum includes 106.2 GWh of renewable energy production. c This sum includes 9.8 MW of renewable energy capacity.

2.2.5 Economic Analysis

This section discusses the macroeconomic impacts of the New York Energy $martSM Program, as well as the cost effectiveness analysis of the deployment programs.


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Macroeconomic Impact Analysis – 2007 Update5

Expenditures made by NYSERDA and New York Energy $martSM Program participants have substantial macroeconomic impacts that go beyond direct benefits to participants. Purchases of goods and services through the program set off a ripple effect of spending and re-spending that influences many sectors of the New York economy, and the level and distribution of employment and income in the State.

This macroeconomic impact analysis quantifies the net impacts of the New York Energy $martSM Program by comparing the impacts of Program expenditures and energy savings to the impacts that would have resulted had the programs not been implemented and the money not been paid by ratepayers into the System Benefits Charge (SBC) fund. The Base Case provides a frame of reference against which to compare the impacts of the New York Energy $martSM Program. The Base Case estimates the impacts that the SBC funds would have had on the New York economy, had they been retained by the customers of the participating utilities in the absence of the program. The components of the Base Case include: (1) increased disposable income available to residential consumers; (2) increased retained earnings available to businesses; and (3) increased purchases of electricity, natural gas, and oil due to the absence of the energy savings provided by the program. The Program Case estimates the impact on the New York economy of SBC funds allocated to the portfolio of New York Energy $martSM Program expenditures. The net macroeconomic impacts are expressed in terms of annual employment6, labor income7, total industry output8, and value added9. Note that the macroeconomic results reported in this section are limited to the impacts that are most directly associated with the Program expenditures and the annual energy savings due to those expenditures. The analysis does not capture the more indirect and long-term potential impacts that may result from more widespread market transformation (i.e; permanent adoption of new energy efficiency measures as the status quo in the marketplace).

Results of Analysis

Results of the macroeconomic analysis, encompassing 14 years of program implementation (1999-2012)10 and 15 years11 following program implementation (2013-2027), indicate that the New York Energy $martSM Program can reasonably be expected to provide net macroeconomic benefits to New York in the form of increased employment, labor income, total output, and value added. Table 2-9 indicates that the New York Energy $martSM Program, averaged over the 29-year analysis period, is expected to create and sustain an average of over 7,200 jobs compared to the number of jobs that would have existed in the absence of the program. In addition, the program increases labor income by $334

5 This section summarizes NYSERDA’s 2007 update to an analysis originally conducted in 2004. The initial study contains more detail on methods and approach, and is available from NYSERDA upon request: Neenan Associates, Macroeconomic Impact Analysis of the New York Energy $martSM Program: An analysis of short-term and longer-term impacts, August 2004. 6 Employment includes total wage and salary employees as well as self-employed jobs in a region. It includes both full-time and part-time workers and is measured in annual average jobs. 7 Labor income includes both employee compensation and proprietor income. 8 Total industry output is the value of total sales revenue, which includes both final and intermediate goods and services. It can be measured as the total value of purchases by intermediate and final consumers. 9 Value added includes the components of Labor Income (employee compensation and proprietor income) plus property income (interest, rental income, royalties, dividends, and profits) and indirect business taxes (primarily sales and excise taxes). 10 Although the SBC funding period ends on June 30, 2011, not all funds are expected to be fully expended by this point. Therefore, the program implementation period was extended through 2012 based on a projection of when funds would be completely spent for installed equipment. 11 A fifteen-year period was selected to represent the average life of measures installed under the New York Energy $martSM Program.


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million per year, increases total output by $503 million per year, and increases value added by nearly $241 million per year.

Table 2-9. Summary of Macroeconomic Impacts of the New York Energy $martSM

Program (Constant 2007$)

Economic Variable Program Implementation

Years (1999-2012)

Years Following Program Implementation

(2013-2027)

Annual Average over 29-year Analysis Period

(1999-2027)

Net Job Growth 7,765 6,742 7,236

Labor Income $386 Million $286 Million $334 Million

Total Output $669 Million $349 Million $503 Million

Value Added $324 Million $163 Million $241 Million

Employment Results

Results of the analysis indicate that the New York Energy $martSM Program provides substantial net macroeconomic benefits to New York in the form of increased employment, both during the program implementation years (1999-2012) and throughout the years following implementation (2013-2027), during which the energy efficiency measures implemented by the program continue to accrue annual energy savings. As shown in Table 2-9 the program is estimated to create and sustain an average of approximately 7,200 jobs over the 29-year analysis period, compared to the estimated number of jobs that would have existed in the absence of the program. Figure 2-15 shows estimated net additional jobs created by individual year, and shows that the program is estimated to result in an average net gain of nearly 7,800 jobs during the program implementation years, and an average of more than 6,700 jobs per year throughout the years following implementation.12 Thus far, about 4,700 jobs have been created and sustained. These are jobs that are estimated to exist, net of jobs that are lost in certain sectors as a result of the program. Note that the annual average employment results are not additive; the values reported represent the number of jobs created and sustained over each of the specified periods: (1) the 14 program implementation years (1999-2012); (2) the 15 years following program implementation (2013-2027); or (3) the annual average over the entire 29-year analysis period (1999-2027).

12 72% of all jobs created during the program implementation years are due to energy bill savings, while 28% of jobs created are due to spending. In years following program implementation, all jobs created are due to energy savings.


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Figure 2-15. 2007 Update – Net Employment Impacts by Year

Labor Income Results

Labor income includes both employee compensation and proprietor income. Results indicate that the New York Energy $martSM Program also provides substantial net macroeconomic benefits to New York in the form of increased labor income. Table 2-9 shows that the Program is estimated to result in an average net gain of $334 million in labor income in each year over the 29-year analysis period. The program is estimated to provide a net gain in labor income of $386 million per year during the program implementation years (1999-2012) and $286 million throughout the years following implementation (2013-2027).

Total Output and Value Added Results

Total industry output is the value of total sales revenue, which includes both final and intermediate goods and services. It can be measured as the total value of purchases by intermediate and final consumers. Value added includes the components of Labor Income (employee compensation and proprietor income) plus property income (interest, rental income, royalties, dividends, and profits) and indirect business taxes (primarily sales and excise taxes). Table 2-9 shows that the program is estimated to result in an average net gain of $503 million in total output and $241 million in value added in each year over the 29-year analysis period. During the program implementation years (1999-2012), the program is estimated to provide a net gain in total output of $669 million per year and a net gain in value added of $324 million per year. Throughout the years following implementation (2013-2027), the program is estimated to result

Net Employment Impacts of New York Energy $mart Program Net Additional Jobs by Year

0

3,000

6,000

9,000

12,000

15,000

1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027

Jobs from Spending Jobs from Energy Savings

Average annual jobs through 2007 = 4,700

Years Following Program Program Implementation Years

Average annual jobs through end of Program = 7,800

Note: EE measures are assumed to carry a 15 year life.


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in a net gain in total output of nearly $349 million per year and a net gain in value added of $163 million per year.

Benefit/Cost Analysis of Deployment Programs – 2007 Update

Introduction

This section presents the portfolio-level benefit/cost analysis of the New York Energy $martSM Program.13 The cumulative analysis presents results of program expenditures and measures installed through year-end 2007. Also presented is an incremental analysis showing the benefit/cost analysis for each year starting in 2003.

As in previous years, various scenarios are depicted. Also, as in previous years, each successive scenario adds additional benefits. The benefits included in this year’s analysis are described below:14

• Scenario 1: This scenario includes (a) resource benefits associated with reduced electricity generation and capacity, and reduced use of natural gas and water; and (b) capacity market price effect arising from curtailable load programs.

• Scenario 2: Adds participant non-energy impacts such as monetized values for comfort, safety, and productivity.

• Scenario 3: Adds macroeconomic value added.

The monetized value of environmental benefits, such as reductions in emissions of sulfur dioxide, nitrogen oxides, and carbon dioxide, were not included as benefits in the benefit/cost analysis.15

Methods

This section provides definitions of benefit/cost terms and describes how certain concepts were applied to this year’s analysis. Changes in methods from previous years are noted where applicable either in the text or in footnotes.

Avoided Energy and Capacity Costs. The New York Independent System Operator (NYISO) day-ahead (DA) clearing prices were weighted by load to estimate avoided energy costs. Forecasted energy prices were indexed to the natural gas forecast. Avoided energy costs used in the analysis are shown in Appendix A.

Avoided capacity costs are based on clearing prices in the NYISO capacity auctions. Future capacity prices were assumed to remain constant in real terms. The avoided capacity costs are also shown in Appendix A. In the benefit/cost analysis, capacity prices were increased to reflect the reserve margin requirement that was 18% before 2007 and 16.5% starting in 2007.

13 Program-level benefit/cost ratios will be in the 2008 1st Quarterly Report. 14 This year’s scenarios differ from prior years’ and these differences are described in the Methods Section. 15 With respect to sulfur dioxide and nitrogen oxides, since there are statewide regulatory emission caps as well as emission trading markets, emission credits may likely be sold in the marketplace, allowing generators to reduce operating costs (e.g., through less stringent pollution controls) or expand generation (e.g., to meet economic growth) without exceeding their caps. The net effect will be statewide emissions meeting the caps for sulfur dioxide and nitrogen oxides.


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Avoided Transmission & Distribution (T&D) costs. In prior years, avoided transmission and distribution costs were not explicitly included. This year, the avoided cost estimates of primary lines and distribution substations were applied at the rate of $55 per kW-year upstate and $100 per kW-year downstate.16 These cost estimates were weighted by measures installed in each region, resulting in a blended cost of $75.35 per kW-year. This value was applied to the life of the measure.

Capacity Market Price Effect. The capacity market price effect was used to estimate the value of curtailable load. Curtailable load registered at the NYISO results in lower capacity costs for all purchased capacity, resulting in a market price effect. The effect was derived from the NYISO’s Demand Curve and was estimated to be approximately $600 per kW-year for each kW available in the Con Edison Service area. For the rest of the State, the capacity cost reduction was estimated to be approximately $180 per kW-year for each kW available. The cost estimates were weighted by the installed curtailable load in each region, resulting in a blended price effect of $424 per kW-year for each kW enabled. The market price effect was assumed to last for three years. Also, this year’s analysis applies the market price effect only to curtailable load and the benefits are included in Scenario 1.17

Discount Rate. As in prior years, a real discount rate of 3% was applied to discount future benefits and to compound benefits and costs that occurred prior to 2007. Savings and costs were assumed to occur in the middle of each year, as opposed to at the end of each year.

Focal Year. The focal year of analysis was 2007. All past spending and savings were converted into $2007. In addition, all past spending and future savings were present-valued to 2007.

Line Loss Factor. Line loss was estimated to be 9% of generation.

Macroeconomic Value Added. These benefits result primarily from lower energy bills and consumer spending of bill savings. Value added includes the components of labor income (employee compensation and proprietor income) plus property income (interest, rental income, royalties, dividends, and profits) and indirect business taxes (primarily sales and excise taxes). The methods and results are presented in Section 2.2.5. R&D program spending and associated macroeconomic benefits were excluded from the benefit/cost analysis.18

Measure Life. The life of electric measures was estimated to be 15 years for the portfolio; life of natural gas measures was estimated to be 20 years.

Natural Gas Forecast. The natural gas price forecast used in the analysis was conducted by Energy and Environmental Analysis, Inc. The historical and forecasted wholesale natural gas prices are shown in Appendix A. Wholesale prices were used to calculate Scenario 1 benefits.

Net Savings. All savings shown in this section have been evaluated and are net of freeridership and spillover.

16 CASE 07-M-0548, Staff’s January 9, 2008 IR Response to the Joint Utilities’ Questions on the “Revised Proposal for Energy Efficiency Design and Delivery and Reply Comments of the Staff of the Department of Public Service” Dated November 26, 2007, and the “Staff Revised Proposal for Energy Efficiency Design and Delivery and Reply Comments” Dated December 3, 2007. 17 In prior years, the market price effect was depicted as Scenario 3. 18 A macroeconomic analysis of the product development projects in the R&D program area is presented in the R&D section of this report.


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New York Energy $martSM Spending. Also referred to as NYSERDA spending, this includes incentives paid to customers, cost of implementation contractors, cost of information-only programs, general awareness, New York State Cost Recovery Fee, NYSERDA administration costs, and evaluation costs. The spending in this section does not include funds used in the Research & Development Program.

Non-energy Impacts. Non-energy impacts include benefits such as comfort, safety, and productivity. The portfolio-wide percentage of 44% of customer bill savings was used to estimate non-energy impacts.

Retail Energy Prices. The historical and forecasted retail energy prices for electricity and natural gas are presented in Appendix A. Retail rates were used in the calculation of bill savings which, in turn, were used to calculate non-energy impacts.

Program Administrator Cost (PAC) Test.19 This test divides the present value of the benefits by the present value of the New York Energy $martSM Program spending.

Total Resource Cost (TRC) Test.20 This test divides the present value of the benefits by the present value of New York Energy $martSM Program spending plus customer investment. For the portfolio, based on historical experience, customer costs were averaged at twice the program spending. Thus, total resource cost was estimated to be three times program spending.

Cumulative Analysis - New York Energy $martSM Program Portfolio

The cumulative energy, capacity, natural gas, and water savings are shown in Table 2-10. The cumulative savings to date are approximately 2,965 GWh per year of electricity, 628 MW of on-peak capacity, 450 MW of curtailable load, 5,435 BBtus of natural gas, and 2.8 billion gallons of water.

Table 2-10. Cumulative Savings Through Year-End 20071

Elecricity Savings (GWh/Year)

Capacity Savings (MW-Year)

Curtailable Load (MW-Year)

Natural Gas (BBtu/Year)

Water (Millions of Gallons/Year)

2,965 628 450 5,435 2,767 1 Does not include savings from Research & Development Programs. Also, 2007 savings do not include savings from the residential Market Support Program.

The cumulative program spending is shown in Table 2-11. Since program inception, the total nominal spending on energy efficiency and demand response programs (excluding Research & Development) has been $781 million. This amount equates to $838 million in $2007. The spending that occurred prior to 2007 were compounded annually to represent the present value of that spending in 2007.21 The present value of the spending equals $918 million in $2007.

Table 2-11. Cumulative New York Energy $martSM Spending Through Year-end 2007

Nominal (Millions $) Real Spending (Millions $2007) Present Value of Spending (Millions $2007)

$781 $838 $918

19 This test was referred to as the Program Efficiency Test (PET) in prior years’ analyses. 20 This test was referred to as the Total Market Effect Test (TMET) in prior years’ analyses. 21 This is analogous to assuming that the funds were deposited in a savings account earning 3% per year.


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The present value of the cumulative benefits are shown in Table 2-12. Benefits associated with avoided resources and curtailable load equal nearly $5.7 billion; non-energy impacts equal nearly $3.4 billion; and macroeconomic impacts equal nearly $3.0 billion.

Table 2-12. Cumulative Benefits Summary

Benefit Source Present Value of Benefits (Millions $2007)

Cumulative Avoided Resources and Curtailable Load $5,677

Cumulative Non-energy Impacts 3,368

Cumulative Macroecnomic Impacts $2,990

Benefit/cost ratios for each scenario are shown in Table 2-13 and Figure 2-16. The PAC test ratios22 were 6.2, 9.9, and 13.2 for Scenarios 1, 2, and 3, respectively. The TRC test ratios were 2.1, 3.3, and 4.4. These ratios do not include Research & Development programs.

Table 2-13. Cumulative Benefit/Cost Ratios

Present Value of Benefits ($2007) PAC Test TRC Test

Scenario 1 $5,677 6.2 2.1

Scenario 2 $9,046 9.9 3.3

Scenario 3 $12,036 13.2 4.4

Figure 2-16. Cumulative Benefit/Cost Ratios

0

2

4

6

8

10

12

14

Scenario 1 Scenario 2 Scenario 3

PAC Test TRC Test

22 The calculation for the TRC and PAC tests are explained in the Methods Section.


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Incremental Analysis - New York Energy $martSM Program Portfolio

This section presents the benefit/cost ratios by year. The incremental resource savings are presented in Table 2-14 and the incremental program spending23 is presented in Table 2-15. Shown in Table 2-16 and Figure 2-17 are PAC and TRC test ratios.

Table 2-14. Incremental Electric, Natural Gas, and Water Savings by Year1

Elecricity Savings (GWh/Year)

Capacity Savings (MW-Year)

Curtailable Load (MW-Year)

Natural Gas (BBtu/Year)

Water (Millions of

Gallons/Year)

Through 2003

1,005 220 293 1,609 965

2004 347 54 69 626 319

2005 621 111 69 1,357 571

2006 671 138 19 1,276 617

2007 321a 105a - 567a N/A

Total 2,965 628 450 5,435 2,471 1 Does not include savings from Research & Development Programs. a 2007 savings do not include the residential Product Support Program.

Table 2-15. Incremental New York Energy $martSM Spending

Nominal (Millions $) Real Spending (Millions $2007)

Through 2003 $303 $340

2004 $113 $123

2005 $128 $136

2006 $109 $111

2007 $126 $126

Total $781 $838 1 The components of this spending are described in the Methods section.

Table 2-16. Scenario 1 Benefit/Cost Ratios by Year

PAC Test Ratio TRC Test Ratio

Through 2003 5.6 1.9

2004 4.4 1.5

2005 6.9 2.3

2006 9.0 3.0

2007 N/A1 N/A1 1 Insufficient data available.

23 See Methods Section for definition of New York Energy $martSM spending.


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Figure 2-17. Scenario 1 Benefit/Cost Ratios by Year

Benefit Cost Ratios by Year

0

12

3

456

789

10

Through 2003 2004 2005 2006

PAC Test Ratio TRC Test Ratio

Cost per KWh Analysis

Shown in Table 2-17 and Figure 2-18 are the cost per kWh analysis by year. The cost ranged from a high of 1.8 cents per kWh to a low of 0.9 cents per kWh in 2006. When Low-Income programs were excluded from the analysis, costs ranged from a high of 1.6 cents per kWh to 0.7 cents per kWh in 2006. The pattern indicates increasing cost effectiveness.

Table 2-17. Cost per kWh by Year

New York Energy $martSM Spending1

(Millions, Nominal $)

Cost per kWh2 Cost per kWh Excluding L-I Program

Costs and Savings

2003 $303 0.016 0.015

2004 $113 0.018 0.016

2005 $128 0.012 0.010

2006 $109 0.009 0.007

2007 $126 N/A3 N/A3 1 The components of this spending are described in the Methods section. 2 NYSERDA spending was reduced by approximately 15% to adjust for costs associated with natural gas savings. The proportion was estimated by converting annual kWh savings to MMBtus (using 10,000 Btu per kWh as the conversion factor). Costs were assumed to be proportional to the annual savings. Portfolio measure life was estimated to be 15 years. 3 Insufficient data available. Note: No discount rate was applied to allow comparison across years.

17BPortfolio Process Evaluation

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Figure 2-18. Cost per kWh by Year

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2003 2004 2005 2006

Cen

ts p

er k

Wh

Portfolio Portfolio Excluding L-I

2.3 Portfolio Process Evaluation

2.3.1 Solicitations Released

During 2007, 35 solicitations were issued to competitively select contractors for program design and implementation services. In total, 316 proposals were received, 144 (42%) of which were approved for funding. Information on solicitations released in 2007 is shown in Table 2-18.

Table 2-18. Solicitations Released Through Year-End 20071

Solicitation Number Solicitation Name Solicitation

Release Date Solicitation

Closing Date

PON 1115 Clean Energy Technology Manufacturing Incentive Program 1/08/07 3/1/07

PON 1115A Clean Energy Technology Manufacturing Incentive Program 1/08/07 8/21/07

PON 1115B Clean Energy Technology Manufacturing Incentive Program 1/08/07 1/23/08

PON 1118 Environmentally Preferred Power Systems Technologies 1/22/07 4/25/07

PON 1118A Environmentally Preferred Power Systems Technologies 1/22/07 10/17/07

RFP 1038 Post-Construction Wildlife Monitoring at Wind Facilities 1/15/07 2/13/07

PON 1102 Transmission and Distribution Program 2/19/07 5/1/07

PON 1102A Transmission and Distribution Program 2/19/07 11/1/07

PON 1130 Industrial Research, Development, and Demonstration 2/5/07 3/28/07

PON 1130A Industrial Research, Development, and Demonstration 2/5/07 7/16/07

PON 1130B Industrial Research, Development, and Demonstration 2/5/07 11/8/07

PON 1099 Advanced Clean-up & Emission Control Technologies for Biogas-fueled DG Systems 2/26/07 4/16/07


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Solicitation Number Solicitation Name Solicitation


Closing Date

PON 1143 Advanced Transportation Technologies 2/26/07 4/30/07

PON 1143A Advanced Transportation Technologies 2/26/07 9/27/07

RFP 1053 New York Energy $mart Business Partners 1/29/07 3/13/07

RFP 1127 Downstate Marketing Program 1/29/07 3/5/07

RFP 1056 New York Energy $mart Business Partners (HVAC) 3/26/07 5/24/07

RFP 1009 Implementation Contractor for Energy Smart Students Program 1/8/07 2/20/07

RFP 1117 NYSERDA Hotline and Fulfillment 1/8/07 2/6/07

RFP 1142 New York Energy $mart Communities Program Southern Tier Region 2/26/07 5/2/07

PON 1096 High Performance Residential Development Challenge 6/18/07 8/9/07

PON 1124 Clean Energy Business Growth & Development 6/18/07 9/5/07

PON 1124A Clean Energy Business Growth & Development 6/18/07 2/4/08

PON 1124B Clean Energy Business Growth & Development 6/18/07 8/4/08

RFP 1077 Energy Smart Focus – Web Services 6/11/07 7/2/07

RFP 1019 New York ENERGY STAR Homes Program: Partner and Ally Support Services 5/7/07 6/19/07

PON 1141 Environmental Monitoring, Evaluation, and Protection (EMEP) Program Ecosystem Research 8/27/07 10/1/07

PON 1164 Advanced Sensors and Controls for Building and Industrial Applications 7/23/07 10/3/07

PON 1164A Advanced Sensors and Controls for Building and Industrial Applications 7/23/07 3/18/08

PON 1179 Environmental Monitoring, Evaluation, and Protection (EMEP) Program Air Quality Research

9/17/07 11/06/07

PON 1178 Distributed Generation as Combined Heat and Power 10/22/07 1/24/08

PON 1195 Development of New Biofuels and Bioproducts in New York State 12/24/07 4/16/08

RFP 1054 New York Energy $mart Business Partners (Lighting) 12/10/07 1/31/08

RFP 1076 Energy Smart Focus – Phase II 12/17/07 3/17/08

PON 1190 Industrial Process & Product Innovation 11/5/07 3/5/08 1 Requests for Proposals (RFPs) are solicitations used for identifying and procuring projects that represent a specific area of interest and include a statement of work with a high degree of specificity describing the work contemplated and the evaluation criteria to be used. A single award with no cost-sharing is usually the norm. Program Opportunity Notices (PONs) are solicitations used for identifying and procuring projects that demonstrate technical, economic, and environmental characteristics in particular technology areas. Multiple awards are usually made and cost-sharing is the norm.

In addition, five solicitations for financial incentive subscription programs were also issued and some remain open. The number of solicitations and applications received for these open enrollment incentives are not part of the proposal information presented above due to the number of individual projects (in the

18BNew York City Process Study Approach

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hundreds) that are on different time lines for contracting. Information on the incentive solicitations released in 2007 is shown in Table 2-19.

Table 2-19. Incentive Solicitations Released Through Year-End 2007

Solicitation Number Incentive Solicitation Name Solicitation


Closing Date

PON 1155 New Construction Program 4/16/07 3/31/08

PON 1047 Technical Assistance 6/23/07 11/30/07

PON 1060 Loan Fund Incentives 8/27/07 7/31/09

PON 1176 Renewable, Clean Energy and Energy Efficiency Product Manufacturing Incentive Program 10/1/07 6/30/11

PON 1197 Technical Assistance 12/24/07 11/30/09

2.4 New York City Process Study Approach

NYSERDA staff recognizes that, in order to serve and educate New York City (NYC) end users on energy efficiency and to transform the market, there is the need to reach more of them. To this end, the process evaluation team is conducting an evaluation that will research ways to increase participation in NYSERDA’s program offerings in NYC and Westchester County (NYC/Westchester). This synopsis provides a brief summary of the process evaluation objectives and methodology.

2.4.1 Objectives

Of the issues and questions identified, the following two key objectives will be addressed: (1) understanding end user motivations for participation, and (2) assessing how to work better with market actors and trade allies in NYC/Westchester.

Regarding the first objective, initial evidence suggests that, compared to the rest of the State, residential and commercial/industrial end users in NYC/Westchester have different motivations for participating in energy efficiency and demand response programs. For example, NYSERDA staff members reported that, based on their program experiences, they think businesses and residents upstate tend to be motivated by “saving money,” but in NYC, greenhouse gas reduction and being “green” seem to be prime motivators. Businesses and residents in NYC are also motivated by grid stability and reliability issues, as the electricity grid is more vulnerable in NYC than the rest of the State. In examining motivations for participation in NYSERDA programs, the evaluation will also look at the synergies that could be developed between NYSERDA programs and other policies and programs.

With respect to the second objective of assessing how NYSERDA can work better with the market actors and trade allies in the NYC/Westchester area, NYSERDA staff have cited a number of key differences in this market, compared to the rest of the State, that are important to investigate. For example, this evaluation will explore why there are comparatively fewer energy service companies operating in NYC/Westchester and why building owners and operators may be wary of performance-based contracting. Contractor territoriality and specialization issues and how contractors divide labor by task, geography, and role will also examined, including issues such as the use of a particular union shop for some projects and the need for contractors to undergo training and licensing to install energy-efficient measures.


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Related to these market actor and trade ally issues, this evaluation will investigate the awareness, knowledge, and interest in NYSERDA programs among contractors with a specific focus towards assessing how NYSERDA’s current program offerings fit with contractor work patterns and how to increase interest in NYSERDA programs.

2.4.2 Process Evaluation Methodology

In-depth interviews will be conducted with NYSERDA staff involved in the NYC/Westchester market and with participants in the various NYSERDA programs. A key issue will be to identify participating end users and those who have dropped out of programs. The sample will concentrate on the past two years and also include those who have participated multiple times over the past few years. Implementers of NYSERDA programs, A&E firms, developers, builders, professional organizations, unions, and other key organizations will also be interviewed.

Secondary data analysis and in-depth interviews in this process evaluation will be mined to assess ways to increase participation in NYSERDA programs in the NYC/Westchester area. The secondary data analysis of other organizations’ energy efficiency programs and policies is to provide background and perspective on the program and policy environment in which NYSERDA’s programs operate in NYC/Westchester.

2.4.3 Final Report

The final report submission date for this evaluation is expected to be September 30, 2008, with the results likely being published in the 3rd Quarter 2008 Evaluation and States Report. It is anticipated that results from this evaluation will provide NYSERDA staff with extensive knowledge to assist with increasing participation in NYSERDA’s program offerings in NYC/Westchester.

2.5 New York Energy $martSM General Awareness

2.5.1 Program Description

Program Purpose

As part of the Public Service Commission’s (PSC’s) Order Continuing and Expanding the System Benefits Charge for Public Benefit Programs in January 2001, the PSC indicated a need for outreach and education programs regarding competition, conservation, need for new generation, and customer choice to be developed and coordinated between NYSERDA and PSC staff. The order also stated a need for PSC staff direction in the design, development, implementation, and evaluation of the outreach efforts.

Pursuant to that, an aggressive outreach and education program has been undertaken by PSC staff, in consultation with NYSERDA staff, to address the energy challenges New York faces with respect to competition, energy conservation, energy supply, siting of new power generation, alternative energy sources, and choice.

Program Resources

The total budget for General Awareness is $31.0 million. As of December 31, 2007, the program had spent 62% of its budget.

19BNew York Energy $martSM General Awareness

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Targeted Customers

The General Awareness Program targets consumers among all sectors throughout New York.

Implementation Approach/Activities

The General Awareness Program provides a number of grassroots and media activities to reach the general population. The program encompasses a number of activities that are coordinated with programs and initiatives undertaken in the New York Energy $martK Program with respect to energy efficiency, renewable energy, and demand response programs. In addition, the General Awareness Program focuses on other initiatives that are separate and distinct, including the need for new generation and competition/choice.

The program is marketed in a variety of ways to reach the broadest audience possible. Traditional marketing media, such as television, radio, newspaper advertisements, public service announcements, outdoor advertising, and a Website (askpsc.com) are used. The program is also marketed through other venues such as home shows, street fairs, public speaking appearances, talk shows, and State and county fairs, where energy efficiency tips and other literature are distributed.

The goals of the program are to:

• Ensure consumers have the awareness, information, and understanding they need to make informed decisions regarding their utility service, utility competition/choice, energy conservation, energy supply, and alternative energy sources

• Ensure that consumers know how to get additional information and provide comment on energy and utility service-related issues

Some of the major campaigns that have been undertaken to achieve these goals include:

• Have an Energy Smart Summer/It’s Cool to Save Energy: Tight electricity supply, especially during peak demand periods, could threaten New York's ability to meet its electricity demand, which is increasingly steadily. The outreach and education program focuses on general awareness and understanding of the energy market; provides information to reduce demand, and informs and educates consumers about the actions they can take in response to electricity alerts. The summer electric load is clearly the most immediate priority with particular emphasis on New York City. The program marketing focuses on tips consumers can use to reduce usage.

• Need for More Generation: Years of sustained growth in an economy that increasingly relies on electricity to power the information age continues to increase New York's need for more electricity. The result is a shrinking cushion between electric generation supply and electric demand. New York, like many other states, must decide how to meet this growing demand. New York must begin the difficult task of expanding its supply of electricity and strengthening its electric system. Predictably, there is often opposition to the siting and construction of new power plants. This very sensitive subject must be dealt with in a tactful, factual manner so New Yorkers across the state understand the shrinking cushion between supply and demand. In particular, this important information and message must be brought to the public in affected areas, such as the Hudson Valley.

• Have an Energy Smart Winter: Increased demand for natural gas, particularly to produce electricity, has led to increasingly higher prices. The winter message uses the past success of programs like


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“Conserve a Little, Save a Lot” to inform consumers of why prices are rising and supplies simple tips they can use to reduce usage and bill impacts.

• Consumer Choice: Since program inception, there has been an effort to increase consumers’ awareness and understanding of competition. A combined message that links choice to increased understanding of the new overall energy marketplace is important in gaining consumers’ attention. Programs like “Your Energy...Your Choice” have helped to increase awareness and understanding of energy competition, and help consumers make informed choices in the competitive market. That message will be continued and combined, where appropriate, with energy savings messages.

• Green Power: A campaign was launched to educate consumers about Green Power and how they can participate in purchasing Green Power as part of their energy mix. The multi-media effort educates consumers on the benefits of purchasing Green Power as the State looks to increase the use of renewable energy sources.

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3


3.1 Overview of Commercial/Industrial Programs

NYSERDA’s commercial and industrial sector programs cover new and existing schools, hospitals, office buildings, government buildings, commercial establishments, not-for-profit facilities, and industrial plants. Programs promote competitive markets for energy efficiency services, engender widespread adoption of high-efficiency technologies, and result in increasing customer participation in peak demand response initiatives.

A number of the programs have been designed specifically for electric resource acquisition. Programs offering technical assistance and financial incentives are also part of the portfolio. NYSERDA helps the energy service companies (ESCOs) and curtailment service providers to incorporate real-time pricing opportunities into their business models. To help improve the reliability of the State’s electric system, the programs include aggressive electric-system and peak-load reduction initiatives. These initiatives reduce the risk of energy supply disruptions and price volatility by implementing long-term energy efficiency improvements that have impact during system peaks and by improving load management capabilities of commercial and industrial facilities.

Market intervention and development strategies for commercial and industrial customers are designed to induce lasting structural and behavioral changes in the marketplace that result in increasing adoption of energy-efficient technologies and practices. Long-lasting, sustainable changes are achieved by reducing barriers to adoption of energy efficiency measures to the point where further public-funded interventions are no longer appropriate. Market development initiatives, including financial incentives, increase the availability, promotion, retail stocking practices, and sales of energy-efficient products and services in end-use markets and sectors by changing the behavior of upstream market participants, including retailers, dealers, vendors, distributors, contractors, installers, trade associations, and manufacturers.

Specific program offerings are briefly described below. More complete program descriptions can be found in the System Benefits Charge Proposed Plan for New York Energy $martSM Programs (2006-2011).1

Peak Load Management Program. The Peak Load Management Program (PLMP) works to improve New York’s energy system reliability and security by reducing energy demand. Formerly known as the Peak Load Reduction Program (PLRP), in 2006 the program was renamed to reflect an increasing focus

1 Found on NYSERDA’s website at: www.nyserda.org/publications/sbcOperatingPlan2006.pdf.


3-2

on enhanced building automation and dynamic retail pricing strategies. PLMP encourages measures for demand management by offering financial incentives to allow participation in dynamic retail pricing, commodity purchase, and managing financial risk. The program provides incentives for equipment and technical solutions that enable significant demand reduction (MW) resources and requires participation in New York Independent System Operator demand response programs. In addition the incentives for load curtailment and shifting (LC/S), distributed generation (DG), and interval meters (IM), are also given for permanent demand reductions that are coincident with the electric system peak.

Enhanced Commercial/Industrial Performance Program. The Enhanced Commercial and Industrial Performance Program (ECIPP) serves commercial and industrial businesses, healthcare facilities, and State and local governments. Information and incentives are provided to improve existing building loads, non-building loads, and process equipment. ECIPP is a consolidation of the former Commercial and Industrial Performance Program (CIPP) and Smart Equipment Choices (SEC) programs, which simplifies and streamlines customer access to incentives. ECIPP has three tiers of incentives, and adds a custom project incentive path serving industrial process opportunities, system approaches, and unique applications. Allowing customers, ESCOs, and contractors access to multiple incentive strategies to support their energy projects will enable the New York ESCO community to continue to grow the market for energy efficiency in existing buildings, process equipment, and non-building efficiency measures.

New York Energy $martSM Business Partners. The New York Energy $martSM Business Partners Program is a consolidation of the Small Commercial Lighting Program (SCLP), Premium Efficiency Motors (PEM) Program, the Commercial HVAC Program, and the Innovative Opportunities Program. This new program focuses on market development. New York Energy $martSM business partners are allies that agree to work with NYSERDA to promote energy-efficient products and services. In exchange, business partners gain access to special training, tools, guidelines, and performance incentives. NYSERDA works with its business partners to help them differentiate their businesses in a highly competitive marketplace, while assuring appropriate quality control mechanisms. The strategy of partnering with businesses helps to strengthen the market infrastructure leading to increased energy-efficient product and service availability and demand. Thus, business partner efforts will also drive greater activity in NYSERDA’s customer-targeted programs.

New York Energy $martSM Loan Fund and Financing Program. The New York Energy $martSM Loan Fund and Financing Program expands the availability of low-interest capital to help implement energy-efficiency projects and process improvements. Lenders enroll in the program by signing participation agreements and agreeing to reduce the interest rates on energy-related loans in exchange for a lump sum subsidy paid by NYSERDA. The Program’s ongoing training of the financial sector includes tools to allow lenders to calculate the cash flow advantages their customers will gain from making energy-efficiency improvements. While the Loan Fund has met the needs of customers who do not avail themselves of other NYSERDA programs, the reduced-interest financing will also continue to be available to program participants.

Energy Smart Focus Program. Energy Smart Focus provides services to facilitate and encourage sector-specific energy efficiency improvements and practices. The program is a marketing and information transfer effort that will use existing core New York Energy $martSM programs and services to sponsor deployment, demonstration, research, and development projects in conjunction with sector customized strategies. Such strategies include benchmarking, targeted marketing materials and messages, training, partnerships with trade associations, and integration with regional and national efforts.

High Performance New Buildings Program. The High Performance New Buildings Program (formerly operating as the New Construction Program) was established to encourage energy-efficient design and building practices among architects and engineers and to urge them to inform building owners about the

21BCommercial/Industrial Evaluation Activities

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long-term advantages of building to higher energy efficiency standards. The program aims to create long-term changes in design practices by integrating energy efficiency and green building concepts into new building designs. The program offers a performance-based approach in which incentives are determined by total electricity savings and are tiered to reward progressively better designs. Through design team incentives and recognition, the program promotes green building and Leadership in Energy and Environmental Design (LEED) certification projects.

FlexTech Technical Assistance Program. The FlexTech Technical Assistance Program is a consolidation of services previously offered under the FlexTech, Technical Assistance, and the Energy Audit Programs. The Program provides customers with objective and customized information to facilitate wiser energy efficiency, energy procurement, and financing decisions. The Program is available to all commercial and industrial customers. Cost-shared technical assistance is provided for detailed energy efficiency studies from energy engineers and experts. Small customers are eligible for quick walk-through energy audits, with the cost share reimbursed upon implementation of recommendations. Participants may use NYSERDA-contracted or customer-selected consultants.

3.2 Commercial/Industrial Evaluation Activities

Table 3-1 provides a snapshot of all recently completed, in-progress, and planned evaluation activities for the Commercial/Industrial sector programs. The evaluation activities completed in 2007 are highlighted within Section 3, and were used along with results from past evaluations to inform the overall findings and conclusions presented in this report.2 For evaluation projects currently underway or planned, the anticipated completion date shown in Table 3-1 coincides with when NYSERDA expects to feature results in future New York Energy $martSM quarterly evaluation and status reports.

3.3 Key Commercial/Industrial Evaluation Findings

This section summarizes key evaluation findings from the 2007 evaluation activities, and from the cumulative prior body of work by NYSERDA and its evaluation contractors.

3.3.1 Energy, Peak Demand, and Fuel Savings

Through NYSERDA’s Impact Assessment activities, independent third-party contractor teams assessed the energy and peak demand savings reported for the Commercial/Industrial programs. Methods used in this assessment included on-site verification of equipment installation and functionality, and review of NYSERDA’s files and engineering estimates for reasonableness and accuracy. Based on this review, the contractors adjusted the savings reported by NYSERDA. In turn, the contractors further adjusted these figures, based on primary research, to account for freeridership and spillover. Tables 3-2 through 3-4 summarize the estimated electricity savings, peak demand reduction, and other fuel savings for each of the C/I sector programs. Note that individual program savings are not adjusted for program overlaps. To avoid double counting in the total sector-level savings estimate, the amount of overlap among the individual program savings estimates is subtracted at the bottom of the table.

2 Program logics were all completed in the first three quarters of 2007. Thus, the program logic diagrams themselves are not reprinted in this report.


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Table 3-1. C/I Program Evaluation Activities

Program Name Evaluation Activities Completed in 2007 Evaluation Activities Underway or Planned

(Anticipated Completion Date)

C/I Sector Program Logic

Non-Participant Market Effects (Existing Buildings)

New York City Market/Process Evaluation (Q3 2008)

PLMP

Program Logic Updated Measurement & Verification

Year-End Impact Evaluation Database Review1

Impact Evaluation of Largest Energy Savers (Q1 2008)

Benefit/Cost Analysis Update (Q1 2008) Market Characterization & Assessment (Q3 2008)

ECIPP

Program Logic Updated Measurement & Verification on CIPP

Updated Non-Energy Impacts for CIPP Year-End Impact Evaluation Database Review1


Benefit/Cost Analysis Update (Q1 2008) Process Evaluation (Q3 2008)

Business Partners

Program Logic Updated Measurement & Verification on SCLP

Updated Non-Energy Impacts for SCLP

Market Effects for High Performance T-8 Lighting Systems (Q1 2008)

Year-End Impact Evaluation Database Review1 for Small Commercial Lighting (Q1 2008)

Loan Fund and Financing Program Logic

Process Evaluation (Q1 2008) Year-End Impact Evaluation Database Review1 (Q1

2008)

New York Energy $martSM Focus

Program Logic None Planned

High Performance New Buildings

Market Characterization & Assessment (partially complete)


Market Characterization & Assessment (fully complete Q1 2008)

Prospective Benefits (Q1 2008) Benefit/Cost Analysis Update (Q1 2008)

FlexTech Technical Assistance



Benefit/Cost Analysis Update (Q1 2008) Rate Analysis and Aggregation Non-Energy Impacts

(Q3 2008)

1 The year-end database review is a thorough review of program databases for discrepancies in data entry, i.e. no kWh recorded for measures that save electricity, high cost per kWh, savings in the correct range, incorrect application of deemed savings values, etc.

22BKey Commercial/Industrial Evaluation Findings

3-5

Several goals were set for the third New York Energy $martSM Program funding cycle. These goals established levels to reach, by June 30, 2011, for energy and peak demand savings as well as several other key metrics of program success. Overall, the C/I portfolio is performing well in terms of the energy savings and peak demand reduction goals. Eighteen months into the five-year measurement period, most programs have surpassed 30% of their energy savings and demand reduction goals. Table 3-2 shows progress for each applicable program toward the five-year goal for electricity savings. Table 3-3 shows progress for each program toward the five-year goal for peak demand reductions. Table 3-4 shows other fuel savings achieved by several programs. There was no five-year goal for other fuel savings.

Overall, the C/I programs are making a significant impact on the market for both existing and new buildings. For example, on the largest energy-saving programs, namely Enhanced Commercial/Industrial Performance, High Performance New Buildings, and Technical Assistance, market effects (i.e., spillover) outweigh any naturally occurring adoption (i.e., freeridership) that is occurring. This is indicated by a net-to-gross ratio greater than 1.0.

Table 3-2. C/I Program Electricity Savings through December 31, 2007 and Progress toward Five-Year Goal

Energy Savings (GWh)

Savings Achieved through Program

June 30, 2006a

December 31, 2007

Five-Year Goal through June 30,

2011

Progress Toward Five-

Year Goal (% achieved)1

Peak Load Management: Permanent Con Edison

106.4a 61.9a

141.0 113.7

107 55

32% 49%

Enhanced Commercial and Industrial Performance Program Con Edison

730.6

224.1

960.3

251.3

320

N/A

72%

N/A

Business Partners Program Con Edison

54.1

4.3

70.1

8.8

80

N/A

20%

N/A

Loan Fund and Financing Con Edison

49.6 0.5

89.6 25.5

N/A N/A

N/A N/A

High Performance New Buildings Con Edison

223.2 48.2

327.6 83.6

210 N/A

50% N/A

FlexTech Technical Assistance Con Edison

644.1 115.2

797.0 207.2

400 N/A

38% N/A

Overlap Removed 126.7 171.4 N/A N/A

Con Edison C/I Total 454.3 690.1 N/A N/A

Statewide C/I Total 1,681.3 2,214.2 N/A N/A

Note: N/A means not applicable (i.e., a goal has not been set for this program). 1 Percentage represents the difference between the June 30, 2006 and December 31, 2007 achievements divided by the five year goal. a Savings reported previously included projects funded through the Con Edison Power Savings Partners Program. These savings have been removed to more accurately reflect accomplishments.


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Table 3-3. C/I Program Peak Demand Savings through December 31, 2007 and Progress toward Five-Year Goal

Peak Demand Savings (MW)

Savings Achieved through Program June 30,

2006a December 31, 2007

Five-Year Goal through June 30,

2011

Progress Toward Five-

Year Goal (% achieved)1

Peak Load Management: Permanent Con Edison

42.5a 27.4a

54.0 36.5

60 45

19% 20%

Peak Load Management: Callable Con Edison

421.1a 188.3a

439.1 199.2

240 125

7% 9%


132.5

54.7

164.7

62.2

50

N/A

64%

N/A

Business Partners Program Con Edison

11.8 1.0

17.0 2.1

16 N/A

32% N/A


14.3 0.5

46.8 9.1

N/A N/A

N/A N/A

High Performance New Buildings Con Edison

45.5 15.9

75.2 24.8

24 N/A

124% N/A

FlexTech Technical Assistance Con Edison

120.9 30.6

148.2 41.4

80 N/A

34% N/A

FlexTech Technical Assistance: Callable 10.2 11.1 N/A N/A

Overlap Removed 24.5 38.3 N/A N/A

Con Edison C/I Total 318.4 373.5 N/A N/A

Statewide C/I Total 774.4 917.7 N/A N/A

Note: N/A means not applicable (i.e., a goal has not been set for this program). 1 Percentage represents the difference between the June 30, 2006 and December 31, 2007 achievements divided by the five year goal. a Savings reported previously included projects funded through the Con Edison Power Savings Partners Program. These savings have been removed to more accurately reflect accomplishments.


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Table 3-4. C/I Program Fuel Savings through December 31, 2007

Fuel Savings (MMBtu)


June 30, 2006 December 31, 2007


3,252 420

5,648 729


137,239 4,941

561,322 42,099

FlexTech Technical Assistance1 Con Edison

3,164,000 800,846

3,217,840 868,817

Overlap Removed 158,200 370,004

Con Edison C/I Total 806,207 911,645

Statewide C/I Total 3,146,291 3,414,806

Note: No goals were established for fuel savings. 1 The methodology to assess impacts focuses on developing samples based on electricity savings, rather than fuel, resulting in a less than optimal sample for fuel-savings projects and fluctuation over time in the calculated impacts. Also, the program recommends on-site generation, which would result in an increase in fuel use, offsetting fuel reductions achieved.

3.3.2 Summary of Other Key Program Impacts and Results

Across the programs, twelve additional logic model-driven goals were set for other key metrics besides energy savings such as the number of customers receiving assistance, funds leveraged, allies participating, and percentage of target markets affected by programs. Overall, the programs are also performing well with respect to these other goals. Specifically, 18 months into the five-year measurement period:

• Two of the twelve goals have been met (136%), or nearly met (96%)

• Progress on three of the 12 goals has reached 30% or more

• Progress on four of the 12 goals has reached at least 20%

• Progress on the remaining three goals is below 20%

The results of each program’s progress toward its stated goals are shown in table format in the subsequent sections.

Select longer-term achievements and evaluation findings are as follows:

• As detailed in Section 3.3.3 below, electric utilities, NYSERDA, and the New York Energy $martSM Program were perceived as the most credible sources providing information or services related to energy efficiency. NYSERDA’s involvement in the market provides credibility to help market actors incorporate energy efficiency measures into new equipment installations and business planning activities.


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• NYSERDA’s involvement in the C/I existing buildings market has led to non-participant spillover on the order of 15%.

• The C/I programs collectively have helped a significant number of projects incorporate energy efficiency and demand response measures, including almost 800 new commercial buildings and more than 11,700 energy efficiency projects in existing commercial/industrial buildings through technical studies, measure replacement, and reduced-interest financing.

• The C/I programs are amassing a significant network of participating allies to support energy efficiency work, including more than 750 lighting installers, and over 100 lenders.

• More than 532 million square feet of building area was constructed in New York during the eight-year period ending December 31, 2007. During this same timeframe, the High Performance New Buildings (HPNB) Program has achieved a market penetration of 32% in terms of building area since program inception, a rate that is within the range of penetration rates reported for similar programs operating in other jurisdictions.3

• The HPNB program has had a significant influence to date on LEED activity in New York with nearly three-quarters of the LEED certified projects (74%) and over half of the LEED registered projects (57%) in the State having participated in the HPNB program.4 The HPNB program’s penetration into the LEED-certified market is similar between the downstate and upstate regions, although the program has been slightly more successful engaging LEED-certified projects in the upstate region. These results imply that the HPNB program has made substantial inroads to date into the LEED/green building market in New York, but that opportunities remain for increased program penetration, especially in the downstate region.

• The Energy $mart Focus Program has made significant progress in its sector-based service approach. The Focus on Commercial Real Estate has benchmarked 76 buildings and provided energy scans to two additional buildings comprising over 60 million square feet of New York City office space. The Energy Smart Schools Program has provided 25% of all eligible schools space (totaling 681 buildings in 144 districts) with its Benchmarking Service.

3.3.3 Commercial/Industrial Sector Existing Buildings Non-Participant Market Effects Study

During 2007, the Summit Blue Market Characterization, Assessment and Causality (MCAC) team reassessed its estimate of non-participant market effects and examined broad market effects resulting from NYSERDA’s New York Energy $martSM Programs with a specific emphasis placed on the NEMA Premium® motors market.5

3 The McGraw-Hill Construction Dodge data, used as the basis for total construction activity in the program area, likely underestimates the total size of the new construction market due to the difficulty of capturing data regarding smaller, lower-value projects that do not require construction permits. Thus, market penetration rates presented may slightly overstate program accomplishments. 4 Market penetration in the LEED/green building market is calculated based on number of projects instead of building area due to data availability. 5 This study was also summarized in the June 2007 Quarterly Evaluation and Status Report. For the full report, please see Summit Blue Consulting, Commercial and Industrial Market Effects Evaluation, Prepared for NYSERDA, October 2007.


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Select findings from the market assessment and non-participant spillover components of the MCAC evaluation included:

• Non-participant end-use customers reported a general awareness of NYSERDA’s presence in the marketplace, a situation likely related to NYSERDA’s program promotion and outreach activities as well as other external influences, including fluctuating energy prices, broad economic conditions, and perceived environmental considerations, among others. Similar to prior research findings, market actors tend to be more familiar with the overarching New York Energy $martSM Program than with specific program offerings.

• Electric utilities, NYSERDA, and the New York Energy $martSM Program were perceived as the most credible sources providing information or services related to energy efficiency services and technologies. These results confirm prior research findings showing that NYSERDA’s involvement in the market provides credibility to help market actors present and gain approval on efforts to incorporate energy efficiency measures into new equipment installations and business planning activities. The results also imply a possible opportunity for NYSERDA to develop strategic marketing and implementation relationships with electric utilities across the State to generate increased market awareness of energy efficiency opportunities and possibly greater market uptake of NYSERDA program offerings.

• Most organizations reported that the importance of energy efficiency considerations in their selection of energy-using systems and equipment had increased over the past five years primarily due to three market level trends: (1) a desire to mitigate the impact of rising energy costs; (2) a desire to lessen their organizations’ environmental impacts and (3) a growing market awareness of energy efficiency opportunities. Nonetheless, additional untapped energy efficiency opportunities likely exist, and efforts to overcome key market barriers in terms of lack of experience and performance uncertainties with high efficiency measures and equipment should be continued. Furthermore, targeted efforts to disseminate knowledge to key decision-makers able to influence organizational purchasing processes also should be continued.

• Given the uncertainty in the size of the non-participant renovation/equipment-replacement market, the MCAC analysis provides a broad range of non-participant spillover estimates attributable to the New York Energy $martSM Program. Cumulative annual non-participant spillover savings range from a low of 89 GWh to a high of 394 GWh, which corresponds to 5% to 23% of the total gross savings from NYSERDA’s commercial and industrial programs, 1,670 GWh per year, with a reasonable best estimate value judged by the MCAC Team to be 15% (258 GWh) of the total gross savings.6

The non-participant spillover estimate is applied to the following programs: Enhanced CIPP, Technical Assistance, Loan Fund, Small Commercial Lighting and Hospitality Lighting. This spillover value does not apply to the High Performance New Buildings Program since the equipment-replacement spillover savings do not apply to new construction projects. In addition, Commercial HVAC and Premium-Efficiency Motors are not included due to the more purely market transformational nature of the two programs than the other C&I programs and since the estimated spillover values calculated for the two programs in prior MCAC evaluations accounted for non-participant effects.

6 It is important to note that the spillover percentages summarized here are not directly comparable to those presented in the 2005 effort due to NYSERDA’s adoption of a revised net-to-gross formula in 2006. This change requires that non-participant spillover be calculated on gross program savings as opposed to net program savings. For comparison purposes, the previous best estimate of non-participant spillover (14%) would actually be 10% using the new methodology based on gross program savings.


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This evaluation also attempted to assess and quantify the magnitude of market effects in the NEMA Premium® motors market through telephone surveys and Delphi panels with motor vendors and manufacturers as well as analyses of 2005 NEMA motor shipment data by state. Select findings from the market effects component of the MCAC evaluation include:

• A broad awareness of NYSERDA program offerings exists within the motor vendor community and vendors are actively engaged in selling the products promoted by the NYSERDA programs. Many vendors credit NYSERDA programs, among other factors, with helping to develop the market for NEMA Premium® motors and advanced motor controls.

• The majority of motor vendors reported broad increases in their customers’ awareness of and familiarity with NEMA Premium® motors and advanced motor controls as well as the corresponding market demand for these types of products over the past five years. The vendors felt that these trends had in turn driven motor manufacturers to expand their available product lines and influenced the number of vendors/contractors offering NEMA Premium® motors to the market.

• Overall, motor vendors estimated that impacts from NYSERDA’s programs had doubled the market share of NEMA Premium® motors from 12% (vendor estimate in the absence of NYSERDA programs) to 24% (vendor estimate of current market share). The market share estimate provided by vendors suggests that a goal of NYSERDA’s Premium-Efficiency Motors Program to increase the market share of NEMA Premium® motors to at least 19% has been exceeded and that this would not have been the case in the absence of NYSERDA’s programs.

• Motor vendors reported significant remaining market opportunities for specific end-use applications involving NEMA Premium® motors and advanced motor controls. Vendors noted that the single greatest remaining market opportunity for both NEMA Premium® motors and advanced motor controls exists in the compressor market with other opportunities present albeit to a somewhat lesser extent in HVAC equipment applications and pumping applications.

• Motor vendors reported that rising energy costs are the primary factor driving increased sales of NEMA Premium® motors and advanced motor controls with increasing market awareness of these technologies as well as NYSERDA’s program offerings also contributing to increased adoption. The majority of vendors indicated that they expect sales of NEMA Premium® motors to increase in the coming year; however, their sales expectations decreased noticeably when asked to consider a market without NYSERDA’s presence.

• In general, motor manufacturers held similar views of the market as those reported by the motor vendors. A noticeable exception is that all manufacturer respondents stated that their organizations’ sales of NEMA Premium® motors in New York would be the same over the next year even if NYSERDA’s Premium-Efficiency Motors Program was discontinued. Given that manufacturer representatives are often key actors affecting ongoing market dynamics, it is important that NYSERDA expand existing outreach activities to motor manufacturers (and vendors) to keep them well informed about program features and changes as the available program offerings evolve over time. Doing so should help increase motor manufacturer and vendor satisfaction with, and favorable opinion of, available program offerings thereby creating additional sales agents to assist with program marketing efforts. In addition, successfully engaging motor manufacturers and vendors in available program offerings will help NYSERDA better meet its goals of promoting competitive markets for energy efficiency products and services as well as expanding the delivery channels and other market infrastructure required to generate additional market uptake of energy-efficient technologies and practices.


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3.3.4 Non-Energy Impacts Evaluation

During 2006-2007, the MCAC team conducted an evaluation on non-energy impacts (NEIs).7 The evaluation examined the NEIs associated with the following New York Energy $martSM programs:

• Commercial/Industrial Performance Program (CIPP)

• Small Commercial Lighting Program (SCLP)

Results were derived from surveys with building managers at facilities participating in each program. In addition to answering questions regarding the participating facilities’ energy-efficient lighting projects and awareness of NEIs, respondents were asked to complete two series of questions that sought to quantify the NEIs associated with the two programs. In an effort to maintain continuity with past research while continuing to explore new methods, the current evaluation employed an extension of the direct query/scaling method used in the 2004 - 2005 NEI assessments (Direct Query), as well as a conjoint method that was first tested in the 2006 NEI assessment (Conjoint Analysis).

For purposes of this evaluation, direct query is defined as a method where an energy efficiency program participant is asked about the value of factors that may be derived from the installation of equipment or practices through the energy efficiency program but are not captured in the energy savings counted in program records. These tend to include factors such as comfort, ease of selling/leasing the building, environmental benefits, and other benefits for participants. To the extent these benefits (or costs) can be quantified and verified, they can be included in the benefit/cost analysis scenarios for energy efficiency programs.

The form of conjoint analysis applied in this assessment allows respondents to choose between bundles of attributes (both positive and negative) that they can, theoretically, consider real-world consumer product options. In each bundle of attributes, or choice option, one attribute is expressed in dollar terms. Based on the choices made by respondents, estimates can be made regarding the dollar value of each attribute using econometric techniques

Findings from Direct Query Method

Key findings from the direct query survey component include:

• The most highly valued NEI was “Energy Equipment O&M Costs,” which was valued by respondents at a level equal to approximately 22% of the energy savings realized by respondents. It was also the second most commonly reported NEI, with 58% of all respondents reporting a decrease in Energy & Equipment O&M costs as a result of completing their projects. Approximately half of the respondents reporting a positive experience with this NEI stated that the decrease in costs was due to longer equipment lifetime. About 15% said the decreased costs were due to improved equipment reliability.

• The next most highly valued NEIs were “Lighting Quality” (with an average value of 11% of annual cost savings), “Occupant Comfort” (with an average value of 11% of annual energy cost savings), and “Productivity” (with an average value of 10% of annual electricity cost savings).

7 This study was also summarized in the March 2007 Quarterly Evaluation and Status Report. For the full report, please see Summit Blue Consulting, Non-Energy Impacts Evaluation, Prepared for NYSERDA, July 2007.


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• Twenty-three percent of respondents reported productivity improvements as a result of completing their projects, noting an average productivity increase of 13% compared to conditions prior to completing their projects. Increased productivity was attributed to a variety of related project impacts, such as improved equipment reliability and worker comfort and satisfaction. Productivity increases also resulted from increased sales at retail facilities and decreased defects at manufacturing facilities, both of which were attributed to improved lighting quality.

• In terms of the most commonly reported NEIs, “Sense of Doing Good for the Environment” ranked highest with 66% of all respondents reporting a positive experience with respect to this NEI followed by “Energy Equipment O&M Cost Savings,” (58% of respondents reporting a positive experience) and “Occupant Comfort” (45% of respondents reporting a positive experience).

Findings from Conjoint Analysis Method

Key findings from the conjoint analysis survey component include:

• The most highly valued NEI was “Even Light Distribution,” which was valued by respondents at approximately six percent of average electricity cost savings across the CIPP and SCLP samples. This attribute is related to “Occupant Comfort,” an NEI that respondents valued highly in the direct query survey component (valued at 11% of annual energy cost savings).

• “Lighting Quality,” presented in terms of “color rendering index,” was the second most valuable attribute. It was valued at approximately three percent of average electricity cost savings associated with CIPP and SCLP projects. Lighting quality was also a highly valued NEI in the Direct Query survey component (valued at 11% of annual energy cost savings).

• “Lamp Life” was the third most valuable attribute. It was valued at approximately two percent of the average energy cost savings associated with CIPP and SCLP projects. The Direct Query NEI most closely related to this conjoint attribute is “Energy Equipment O&M Costs.” Interestingly, “Energy Equipment O&M Costs” was ranked highest among NEIs included in the Direct Query survey.

3.4 Peak Load Management Program


The Peak Load Management Program (PLMP) is designed to improve the reliability of New York’s electric grid while helping businesses and industries to reduce operating costs. PLMP facilitates energy efficiency and demand response in order to displace the need for new power generation by providing incentives to end users pursuing energy conservation.

PLMP encourages demand management by offering financial incentives to allow participation in dynamic retail pricing, commodity purchase, and managing financial risk. The program provides incentives for equipment and technical solutions that enable significant demand reduction (MW) resources, and requires participation in NYISO demand response programs. In addition the incentives for load curtailment and shifting (LC/S) and distributed generation for Demand Response (DR), and interval meter (IM), incentives are also given for permanent demand reductions that are coincident with the system peak.

PLMP targets commercial, industrial, and institutional customers and mission critical facilities such as data centers, communications facilities, government locations, and academic research facilities that are interested in participating in reliability and dynamic pricing. The program is offered statewide, with

23BPeak Load Management Program

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marketing emphasis in areas of demonstrated need, e.g., where electricity demand is growing and where local power needs are nearing capacity.

The 13-year program budget is $88.2 million.

3.4.2 Program Accomplishments

Table 3-5 shows the Program’s five-year goals and performance over the most recent 18 months.

Table 3-5. Peak Load Management Program – Long-Term Goals and Achievements

Activity Program Goal

(July 1, 2006 through June 30, 2011)

Achieved July 1, 2006 through December 31, 2007

% of Goal Achieved

Customers receiving assistance 750 294 39%

3.4.3 Program Impact Evaluation

Table 3-6 presents cumulative annual net energy and demand savings from program inception through December 31, 2007. Realization rates account for differences in program reported savings and performance of actual installations. Attribution determines, through various methods, whether the gross savings estimate should be further adjusted downward or upward for freeridership or spillover. Adjustments for realization rate, freeridership and spillover, and the ultimate program net-to-gross ratio are shown in the table. In 2007, the PLMP measurement and verification was updated, and results are reflected in the realization rates shown in Table 3-6.

The PLMP database received an in-depth review by the Impact Assessment team for discrepancies in project entries, for example, high $/kWh, missing savings, etc. Those findings have been shared with program staff and will be integrated into the database.

3.4.4 Follow-up on Evaluation Recommendations

The June 2007 measurement and verification contractor report by Nexant cited several recommendations for program improvement. 8 Nexant recommended improving the accuracy of reported MW reduction by: 1) requiring customer-prepared technical documentation to support self-reported kW estimates and/or, periodic field-verification of a random sample of completed IM projects, and 2) improving the database reporting methodology and the accuracy of engineering calculations used to estimate savings, especially for PDRE projects. With regard to the first suggestion, program staff indicates that random site visits are being conducted on a portion of the interval meter projects. Regarding the second suggestion, database is being modified to maximize automation and minimize risk of human error.

8 Nexant, PLMP M&V Report, June 2007.


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Table 3-6. PLMP Cumulative Annual Energy and Peak Demand Savings (through December 2007)

Program Reported Savings

Realiza-tion rate

Adjusted Gross

Savings

Freerider-ship Spillover

Net-to-Gross Ratio1

Net Savings

DEGI (MW) 92.4 0.86 79.5 24% 25% 0.95 75.5

LC/S (MW) 152.3 0.92 140.1 24% 25% 0.95 133.1

PDRE ( MW) 47.0 0.94 44.2 25% 37% 1.03 45.4

Cooling Recom-missoning (MW) 8.6 1.0 8.6 0% 0% 1.0 8.6

IM (MW) 246.9 0.85 209.9 10% 22% 1.1 230.5

Total MW 547.3 - 482.3 - - - 493.1

PDRE (MWh) 113,175 1.0 113,175 25% 37% 1.03 116,287

Cooling Recom-missoning (MWh) 24,700 1.0 24,700 0% 0% 1.0 24,700

Total MWh 137,875 - 137,875 - - - 140,987 1 Net-to-Gross Ratio = (1-Freeridership) * (1+Spillover).

3.5 Enhanced Commercial and Industrial Performance Program


The ECIPP serves commercial and industrial businesses, healthcare facilities, colleges and universities, and state and local governments. It provides information and incentives to improve existing building loads, non-building loads, and process equipment. Customers have the option of using ESCOs or applying for and receiving incentives directly from NYSERDA. Building off the successful CIPP and SEC Programs and as a consolidation of the two programs, ECIPP simplifies customer access to incentives by having a single point of entry into NYSERDA and by providing to customers a streamlined and simplified process to the marketplace.

ECIPP offers a three tier program, each tier offering different financial incentive strategies for capital improvements, with higher incentives for more complex projects. The first tier (formerly SEC) offers customers flat-rate incentives for the purchase and installation of pre-qualified electric and gas energy efficiency measures. The second tier offers eligible customers fixed incentive amounts per unit of kWh or therm saved for energy efficiency improvements based on a technical engineering analysis. Third tier (formerly CIPP) incentives are based on performance and are provided through a Standard Performance Contract between NYSERDA and the Applicant. In addition to incentives for energy efficiency projects, Tier III offers incentives for CHP systems in the Consolidated Edison Service Territory.

To help alleviate the growing electric load downstate, ECIPP continues to increase its presence in New York City. An ongoing objective of ECIPP (and a goal of its predecessor program, CIPP), is to help build a robust ESCO and energy efficiency service industry in New York. Overall ESCO activity in New York has increased during the past eight years. Recent evaluation studies report increased ESCO activity and improved quality of work and a significant increase in the familiarity of energy efficient products.

24BEnhanced Commercial and Industrial Performance Program

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In providing a structured approach to the existing buildings market, NYSERDA can provide customers sustainable performance improvement strategies. With the single-entry point to ECIPP, NYSERDA can strengthen links to other New York Energy $mart efforts, such as Technical Assistance, Loan Fund and Financing, and Energy Smart Business Partners.



Two important non-energy goals were set for the ECIPP. As shown in Table 3-7, the program is making good progress toward meeting these five-year goals.

Table 3-7. Enhanced Commercial and Industrial Performance Program – Long-Term Goals and Achievements

Activity Program Goals


Achieved July 1, 2006 through December 31,

20071 % of Goal Achieved

Leveraged Funds ($ million) $400-450 $74.2 million 17%

Customer Projects 3,300-3,500 856 25% 1 For installed projects only. Previous reports included projects that were contracted but not yet installed.

3.5.3 Program Outputs and Indicators

Table 3-8 presents the key outputs for ECIPP through December 31, 2007.

Table 3-8. Enhanced Commercial and Industrial Performance Program – Key Program Outputs

Output Value (Cumulative through December 2007)

Tier I

Number of projects completed 3,625

Dollar value of incentives for completed projects $8.9 million

Average project incentive $2,444

Tier II & III

Number of applications received and approved 1,375

Number of projects completed 993

Dollar value of incentives paid and total project cost $94.5 million, $504.7 million


Table 3-9 presents cumulative annual net energy and demand savings for the program from inception through December 31, 2007. Realization rates are developed to account for differences in program reported savings and performance of actual installations. Attribution analysis determines, through various methods, whether the gross savings estimate should be further adjusted downward or upward for


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freeridership or spillover. Adjustments for realization rate, freeridership and spillover, and the ultimate program net-to-gross ratio are also shown in the table.9

The CIPP and SEC Program databases received an in-depth review by the Impact Assessment team for discrepancies in project entries, for example, high $/kWh, missing savings, etc. Those findings have been shared with program staff and will be integrated into the database.

In 2007, the ECIPP measurement and verification work was updated. The results of this most recent work are reflected in the realization rates shown in Table 3-9.

The 2006-2007 study by Summit Blue also updated the attribution analysis for CIPP. Select findings include:

• Both end-use customers and ESCOs tend to credit the program with having an impact on decision-making regarding incorporation of high efficiency measures and designs. For example, more than 65% of end-use customers and more than 70% of ESCOs responding to the retrospective survey report that the CIPP in some way influenced “either the type or efficiency level of the measures/designs…or the amount of high efficiency measures/designs” incorporated at the project site.

• In the current analysis covering CIPP projects completed since January 2005, freeridership is estimated at 35%. This freeridership rate reflects the fact that many program participants believe that they would have installed at least a portion of the high efficiency equipment and designs even without the technical support and financial incentives offered by NYSERDA. While the freeridership estimate is slightly higher than the 30% reported in the 2005 analysis, this is to be expected as higher efficiency measures become the industry standard and market transformation occurs.

• The current spillover estimate—including both participant and non-participant spillover—is 58%, which more than offsets the impact of freeridership on program savings. This is greater than the 39% reported in the 2005 analysis, but increasing levels of spillover can also be expected as the CIPP influences more market actors, and as those market actors that were influenced by the program in its early years have gone on to incorporate the lessons learned through the CIPP into other projects.

• Across all projects since program inception, the blended freeridership is estimated at 31%, the blended spillover is estimated at 44%, and the blended net-to-gross (NTG) ratio is estimated at 1.04 (with lower and upper bounds of 0.86 and 1.22). The net-to-gross ratio for the CIPP program has increased since it was estimated for the 2005 analysis. As noted in Section 3.3.2 above, subsequent to this study, the non-participant spillover estimate was increased, thereby increasing the blended spillover and net-to-gross ratio for CIPP to 45% and 1.05, respectively.

9 The MCAC team continued its Integrated Data Collection (real-time data collection on all projects at the time of project completion) efforts during 2006-2007, but found that results were similar enough to those reported in the 2005 Smart Equipment Choices MCAC evaluation that no modifications to the freeridership or spillover estimates were recommended.

24BEnhanced Commercial and Industrial Performance Program

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Table 3-9. ECIPP Cumulative Annual Energy and Peak Demand Savings (Through December 2007)

Program Reported Savings

Realiza-tion Rate

Adjusted Gross

Savings


Net-to-Gross Ratio

Net Savings

Commercial/Industrial Performance Program

MWh/year 814,642 1.01 822,788 31% 45% 1.05a 863,927

MW On-Peak 179.2 0.77 138.0 31% 45% 1.05a 144.9

Smart Equipment Choices

MWh/year 143,920 0.93 133,846 51% 46% 0.72b 96,369

MW On-Peak 29.5 0.93 27.4 51% 46% 0.72b 19.7

MMBtu/year 7,844 1.0 7,844 51% 46% 0.72b 5,648

Enhanced Commercial/Industrial Performance Program (ECIPP) - Total

MWh/year 958,562 N/A 956,634 N/A N/A N/A 960,296

MW On-Peak 208.7 N/A 165.5 N/A N/A N/A 164.7

MMBtu/year 7,844 N/A 7,844 N/A N/A N/A 5,648

a Net-to-Gross Ratio = 1-Freeridership + Spillover (a weighted average of the NTG ratios estimated in the previous MCAC analysis and the current analysis is shown here). b Net-to-Gross Ratio = (1-Freeridership) * (1+Spillover). N/A – Not Applicable

Non-Energy Impacts

The Summit Blue team evaluated non-energy impacts for both the CIPP and SEC programs. Non-energy impacts (NEIs) are expressed as a percentage of energy savings. NEI multipliers are presented in Table 3-10.

Table 3-10. ECIPP NEI Results

Results from Direct Query Approach (year of study) Percentage of Energy Savings

Commercial/Industrial Performance Program (2007) 11%

Smart Equipment Choices Program (2004) 42-45%


The May 2007 report by Summit Blue contained several recommendations for program improvement. Those recommendations are listed below along with program staff’s responses.10

• CIPP staff should continue established efforts to streamline the program application and participation process.

10 Summit Blue Consulting, LLC, Commercial/Industrial Performance Program Market Characterization, Assessment & Causality Evaluation Report, May 2007.


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In Fall 2007, staff made changes to the application, and there is an effort to implement an on-line application.

• CIPP staff should take steps to minimize the likelihood of NYSERDA-contracted technical consultants assigned to participating projects changing during the course of the projects and, when changes occur, ensure that the new technical consultants assigned to the projects are well versed in the details of the projects before providing the required services. Several respondents noted that such changes were problematic in that they caused delays and also introduced a lack of continuity.

1. No action has been taken. The Program generally does not change technical consultants during a project. Employees may leave a firm; however, this is out of NYSERDA’s control.

• Consider undertaking an exercise to identify the most prominent and influential individuals within the broader ESCO community to determine whether or not these “opinion leaders” are participating in the CIPP. ESCO representatives who are opinion leaders in the eyes of the market have the greatest potential to influence other ESCOs; thus, ensuring that these individuals are touched by the program will help make the most of limited program resources in terms of leveraged program marketing efforts and information exchange.

Staff is engaging in greater conversations with groups such as NAESCO and individually reaching out to ESCOs to discuss participation.

• Future research efforts should consider examining ESCOs’ rationales for not including all of their projects in the CIPP, especially those ESCOs operating in the New York City metropolitan area. In response to the Summit Blue survey, 23% of ESCOs responded that, as a result of their CIPP experience, they incorporated energy efficiency measures at facilities that did not participate in the program. Research efforts should examine the primary barriers to program participation that contributed to this situation as well as potential program adjustments that could be made to address these barriers.

A process evaluation is in progress to research ways to increase participation in NYSERDA’s programs in New York City.

The April 2007 measurement and verification report by Nexant included two recommendations.11 Below are those recommendations and staff’s response.

• Conduct an expanded study on lighting risk analysis. Provided it upholds the results of a pilot review, ECIPP can increase the threshold to waive M&V for lighting projects to 1,400,000 kWh/year with a minimal risk of reporting error.

A policy change for lighting projects set a threshold of 600,000 kWh/year to trigger inspection and M&V requirements.

• NYSERDA ECIPP staff can use the Monte-Carlo simulation method to identify other low-risk measures to waive or limit M&V requirements by extending the sample to represent the other measures commonly promoted by ECIPP.

11 Nexant, Inc., CIPP Measurement & Verification, April 2007.

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NYSERDA recently contracted with the Megdal team for impact evaluation activities such as the one recommended above. However, further discussion among NYSERDA evaluation and program staff is needed to determine how these possible tasks can be accomplished.

3.6 New York Energy $martSM Business Partners


The New York Energy $martSM Business Partners Program consolidated four prior programs, and added an umbrella Core Services support function. NYSERDA’s Core Services contractor provides program design, development, and implementation services. The four program elements included in Business Partners are described below.

• Commercial Lighting: Formerly known as the Small Commercial Lighting Program, this effort involved promotion of effective, energy-efficient lighting, “The Right Light,” in commercial and industrial spaces up to 25,000 square feet by partnering with lighting practitioners. The program has provided training, field support, project incentives, and demonstration awards to participating lighting practitioner allies, including contractors, distributors, manufacturer representatives, lighting designers, architects, and engineers. NYSERDA is seeking an implementation contractor to evolve and continue these efforts under the Business Partners Program: Commercial Lighting RFP 1054. Proposals were due on January 31, 2008.

• Motor Systems: Formerly known as the Premium-Efficiency Motors Program, this effort worked with suppliers and providers of motors and motor repair services to promote sales of NEMA Premium® motors, quality motor repairs, and motor management services. Motor management activities included motor assessments, planning for future repair and replacement, and consideration of drives. The Program has worked with vendors to present the case for a motor management program to their customers, to conduct motor assessments, and to facilitate implementation of motor management plans and policies whenever possible. The Business Partners Program: Motor Systems RFP 1055 was released in 2007 to procure contractor services to develop and implement strategies to strengthen targeted markets in the motor systems area.

• Building Performance and HVAC: Prior activities under the Commercial HVAC Program focused on training and supporting HVAC contractors, distributors and commercial building owners to increase the market share of energy-efficient unitary HVAC units and use of related energy-efficient products and maintenance services. The predecessor program also included efforts to increase demand for retro-commissioning (RCx) services in existing commercial buildings. The Business Partners: Building Performance and HVAC RFP 1056, released in 2007, will procure contractor assistance to extend prior efforts to promote energy-efficient HVAC technologies and promote retro-commissioning services.

• Innovative Opportunities: Competitively selected projects on emerging and under-used technologies to increase market adoption and penetration. Six projects totaling approximately $1.7 million in program funding are still underway.

New York Energy $martSM business partners are allies who agree to work with NYSERDA to promote energy-efficient products and services. In exchange, business partners gain access to special training, tools, guidelines, and performance incentives. NYSERDA works with its business partners to help them differentiate their businesses in a highly competitive marketplace, while assuring appropriate quality.


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This involves creating a brand identity that conveys the theme that mid-market businesses are vital to the growth of the energy efficiency industry and important to the economy of the State.

The Business Partners Program activities, such as training, tools and field support, help improve the awareness of and familiarity with targeted technologies and services. The strategy of partnering with businesses helps to strengthen the market infrastructure leading to increased product and service availability and demand. Additionally, business partner efforts will also help to increase activity in NYSERDA’s customer-targeted programs.

The thirteen-year program budget is $43.9 million.


Table 3-11 shows the Business Partners Program goal to sign up 1,500 partners between July 1, 2006 and June 30, 2011. Although more than 750 allies are currently participating in the commercial lighting program element, a total of 88 new partners have signed up over the past 18 months. Program staff expects an increase in allies as the core services and program elements ramp up.

Table 3-11. New York Energy $martSM Business Partners Program – Long-Term Goals and Achievements





Business Partners (signed up) 1,500 88 6%


This section highlights key program outputs. All values reported are cumulative since program inception. Table 3-12 presents the key outputs for the program through December 31, 2007. Some metrics are carried forward from predecessor programs in an effort to show cumulative progress.


Table 3-13 presents cumulative annual net energy and demand savings for the program from inception through December 31, 2007. Realization rates are developed to account for differences in program reported savings and performance of actual installations. Attribution analysis determines, through various methods, whether the gross savings estimate should be further adjusted downward or upward for freeridership or spillover. Adjustments for realization rate, freeridership and spillover, and the ultimate program net-to-gross ratio are also shown in the table. Adjustments for freeridership and spillover were not estimated for the Hospitality Lighting Program. For Commercial HVAC, the savings estimates were determined by the MCAC team based on market research.

During 2007, the measurement and verification evaluation work on the SCLP was updated. Realization rates shown in Table 3-13 reflect the most recent findings. Nexant had one recommendation at the conclusion of its study. The specific recommendation and program staff’s response are discussed in Section 3.6.5.

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Table 3-12. New York Energy $martSM Business Partners Program – Key Program Outputs

Outputs Value (Cumulative through December 2007)

Commercial Lighting

Number of participating allies 757

Dollar value of incentives awarded $794,000

Number of completed projects 916

Square footage of projects completed 7.4 million

Total persons trained on effective, energy-efficient lighting 1,645

Number of individuals at SCLP ally companies that have taken the National Council on Qualifications for Lighting Professions (NCQLP) certification exam

14

Motor Systems

Number of motors incented under the former Premium-Efficiency Motor vendor incentive program 11,004

Number of participating vendors (vendors who have participated in at least one customer ride along visit) 22

Number of vendor motor management training sessions held and number of people attending training sessions 9 sessions with 36 attendees

Number of completed customer motor inventories using MotorMaster and number of motors inventoried 88 inventories covering 8,329 motors

Number of written motor management plans developed by customers 1

Building Performance & HVAC

Number of participating vendors 26

Number of commissioning and retrocommissioning providers trained 289 Commissioning and 134 Retrocommissioning

Number of HVAC contractors and distributors trained 292 (93 DCV, 89 Advanced Diagnostics, 110 Spec

and Sell)

Number of unitary HVAC RTUs tested with advanced diagnostics 1,240


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Table 3-13. New York Energy $martSM Business Partners Cumulative Annual Energy and Peak Demand Savings (through December 2007)

Program-Reported Savings

Realization Rate

Adjusted Gross

Savings Freeridership Spillover

Net-to-Gross Ratio1

Net Savings

Small Commercial Lighting

MWh/year 44,381 0.94 41,718 39% 80% 1.10 45,890

MW On-Peak

11.6 1.0 11.6 39% 80% 1.10 12.7

Premium-Efficiency Motors2

MWh/year 9,885 1.0 9,885 67% 168% 0.88 8,776

MW On-Peak

1.8 1.0 1.8 67% 113% 0.70 1.3

Commercial HVAC3

MWh/ year

6,767 N/A 6,767 N/A N/A N/A 6,767

MW On-Peak

2.0 N/A 2.0 N/A N/A N/A 2.0

Hospitality Lighting

MWh/ year

8,660 Not Evaluated

8,660 Not Evaluated

Not Evaluated

Not Evaluated

8,660

MW On-Peak

0.9 Not Evaluated

0.9 Not Evaluated

Not Evaluated

Not Evaluated

0.9

Total Business Partners

MWh/ year

69,692 N/A 67,030 N/A N/A N/A 70,093

MW On-Peak

16.4 N/A 16.4 N/A N/A N/A 17.0

1 Net-to-Gross Ratio = (1-Freeridership) * (1+Spillover). 2 Savings from the prior motor incentive program have been held constant since the program ended. Savings achieved in 2006 from the new motor management program and the STAC 100 Motors program, in the amount of 296,202 kWh and 48 kW, have been added in the Net Savings column. 3 Cumulative annual savings for the Commercial HVAC portion of the program were reduced in 4th Quarter 2006. This approach was taken due to the known short-term nature of savings from advanced diagnostics and commissioning, which were part of the program. N/A – not applicable

Non-Energy Impacts

Non-energy impacts studies have focused on the Small Commercial Lighting Program and Commercial HVAC. NEIs are expressed as a percentage of the Program’s energy savings. Multipliers are shown in Table 3-14.

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Table 3-14. Business Partners NEI Results


Small Commercial Lighting Program (2007) 11%

Commercial HVAC Program (2004) 25-55%


In its May 2007 report on the SCLP, Nexant noted that on some projects the kW reduction was calculated by space types, while a single self-reported operating-hour number was used to estimate the electric energy savings for all the spaces covered by the project.12 Nexant recommended that NYSERDA use space-specific operating hours for each project with the expectation that this would improve the accuracy of energy savings claimed by each project, and reduce variance observed in the results.

The SCLP will continue to use self-reported hours for now (the program is slated to end on March 31, 2008). When a contractor is hired to implement the new Commercial Lighting Program, NYSERDA will consider using space-specific operating hours as part of the reporting requirements.

3.7 New York Energy $martSM Loan Fund and Financing Program


The New York Energy $martSM Loan Fund and Financing Program expands the availability of low-interest capital to help implement energy-efficiency projects and process improvements. Lenders enroll in the program by signing participation agreements and agreeing to reduce the interest rates on energy-related loans in exchange for a lump sum subsidy paid by NYSERDA. Interest rate reductions range from 4% in most of the State to 6.5% in the Con Edison utility area. The Loan Fund has been an implementation tool for many types of projects, allowing reduced interest rate financing for cutting edge technologies. The Program has been especially beneficial in encouraging lender financing of photovoltaic and wind turbine projects, and in promoting green building measures in new construction.

The Program’s ongoing training of the financial sector includes tools to allow lenders to calculate the cash flow advantages their customers will gain from making energy-efficiency improvements. Going forward, NYSERDA will work with ENERGY STAR® to develop new or modify existing ENERGY STAR tools to meet this goal. While the Loan Fund has met the needs of customers who do not avail themselves of other NYSERDA programs, the reduced-interest financing will also continue to be available to customers participating in other NYSERDA programs.

NYSERDA has worked with more than 100 lenders and leasing companies across the State to increase the availability of low-interest capital for energy efficient equipment and process improvements.


12 Nexant, M&V Evaluation Small Commercial Lighting Program, Prepared for NYSERDA, May 2007.


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Table 3-15 highlights the Loan Fund’s five-year goals and accomplishments as of December 31, 2007. Eighteen months into the five-year period, the Program has already surpassed its goal to sign up 75 lenders. The Program has also nearly met its goal (96%) for the dollar value leveraged by closed loans in the commercial and industrial sectors. Although the number of commercial/industrial loans was in line with expectations, projects were much larger than anticipated. The Loan Fund per-project cap remained unchanged, but the loan amounts were larger than projected.

Table 3-15. New York Energy $martSM Loan Fund and Financing Program – Long-Term Goals and Achievements for Commercial/Industrial Projects



Achieved July 1, 2006 through

December 31, 2007

% of Goal Achieved

Customers receiving assistance (closed commercial/industrial loans) 500 161 32%

Participating lenders (signed participation agreements) 75 102 136%

Leveraged loan amount (for closed commercial/industrial loans) $60 million $57.8 96%


This section highlights key program outputs as identified through the logic model development work and associated market progress. All values reported are cumulative since program inception. Table 3-16 presents the key outputs for the Loan Fund and Financing Program through December 31, 2007. Table 3-17 presents a sample of key logic model-driven indicators of program success, especially those related to market progress, as tracked by the evaluation and program activities.

Table 3-16. Loan Fund and Financing Program – Key Program Outputs for Commercial/Industrial Projects


Number of loans closed 523

Value of loans closed $131 million

Average loan value $250,724

Number of lenders with signed participation agreements 102

Number of lenders actively processing loans 26

Number of lenders with multiple loans 106a

Number of lenders with statewide coverage 16

a Includes some early residential activity.

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Table 3-17. Loan Fund and Financing Program Program – Key Market Indicators and Program Cumulative Progress

Topic Indicator Value (2005)

Increasing awareness among lenders about the financial benefits

of energy efficiency

85% of lenders surveyed have at least some familiarity with energy efficiency, compared to only 62% for renewable energy

Of those lenders claiming some knowledge, about two-thirds have become more familiar with the technologies and related

economics over the past five years

Awareness of the Loan Fund among contractors and vendors

More than half of borrowers (51% of commercial and 85% of residential) report that their contractor or vendor had either

referred them to the Loan Fund or was aware of the program.

Lenders are able to speak accurately about the economic

benefits of energy efficiency and renewable energy investments

35% of lenders consider it important (4 or 5 on a 5-point scale where 5 is the highest) that they understand “the technologies and economics related to energy efficiency equipment and measures” before making loans for new construction or renovation projects that incorporate high efficiency. Lenders have similar views on

renewable energy projects.

Awareness and Knowledge

Lenders include energy savings within cash flow analysis when

reviewing loans

11 out of the 21 commercial lenders surveyed “always” or “often” include energy costs in the cash flow analysis for new

construction and renovation projects

Value of energy efficiency investments is based on principles

similar to other business investments (e.g,, ROI, payback)

75% of commercial borrowers say they evaluate energy efficiency investments on the same basis as other business investments

Property owners perceive that renewable energy technology or efficiency products will provide

adequate payback

39% of commercial borrowers and 10% of residential borrowers were confident that high efficiency equipment would pay back

quickly enough without a financial incentive

Perceptions and Practices

Lenders have confidence that new renewable energy technology or efficiency products will improve ability of borrower to repay loan

Lenders were evenly split on the importance of reduced energy costs improving borrowers’ ability to repay loans, and only 7%

consider it “extremely important”


Table 3-18 presents cumulative annual net energy and demand savings for the program from inception through December 31, 2007. Realization rates are developed to account for differences in program reported savings and performance of actual installations. Attribution analysis determines, through various methods, whether the gross savings estimate should be further adjusted downward or upward for freeridership or spillover. Adjustments for realization rate, freeridership and spillover, and the ultimate program net-to-gross ratio are also shown in the table.


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Table 3-18. Loan Fund Cumulative Annual Energy and Peak Demand Savings (Through December 2007)


Realiza-tion Rate

Adjusted Gross

Savings

Freerider-ship Spillover Net-to-Gross

Ratio1 Net

Savings

MWh/year 114,290 0.81a 96,367 27% 20% 0.93 89,622

MW On-Peak 32.2 1.73a 50.3 27% 20% 0.93 46.8

MMBtu 379,605 1.59 603,572 27% 20% 0.93 591,322 1 Net-to-Gross Ratio = 1-Freeridership+Spillover. a. The realization rates calculated only apply to the custom measure kWh and kW savings. Savings arising from pre-qualified measures have a realization rate of 1.0.

3.8 Energy Smart Focus Program


Energy Smart Focus is a sector-specific effort to facilitate and encourage greater energy efficiency awareness and energy efficiency market penetration to the targeted sectors. The program is a marketing and information transfer effort that uses existing core New York Energy SmartSM programs and services to sponsor deployment, demonstration, research, and development projects in conjunction with sector customized strategies, including:

• Outreach and one-on-one interactions

• Targeted marketing materials and messages

• Training

• Partnerships with trade associations

• Integration with regional and national efforts

• Benchmarking

Efforts center on each sector’s core mission and increasing productivity while improving energy efficiency and reducing demand. Strategies vary by sector and will be developed to leverage non-energy benefits such as environmental benefits, indoor air quality, productivity, and maintenance savings, which often drive energy efficiency decisions. These efforts will be augmented by sector-independent Web support services.

The five-year program budget is $18.9 million.


Table 3-19 shows the Energy Smart Focus Program five-year goal for participants receiving assistance. The Program has achieved 5% of its goal. However, only the Energy Smart Schools Program element existed prior to July 2006 and, thus, services to other sectors are currently ramping up. Also shown are the Focus Program sector partnerships that have been developed. Partnerships include outside

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organizations, associations, agencies, utility account executives, supply chain partners etc. who have pledged to assist in the development, promotion, and execution of the Energy Smart Focus Program.

Table 3-19. Energy Smart Focus Program – Long-Term Goals and Achievements




% of Goal Achieved

Participants Receiving Assistance 21,000 1,030 5%

Focus Sector Partnerships1 NA 93 NA 1 This metric is new and was not part of the original SBC3 Operating Plan goals.


Energy Smart Focus is primarily a sector-based energy information and services program. Services provided vary by sector, but ultimately many customers will elect to participate in other New York Energy $martSM programs. Energy and demand savings that may be attributable to the Focus Program are tracked and reported under the other New York Energy $martSM programs.

3.8.4 Sector Highlights

As a sector-based energy information and services program, many aspects of the Focus Program cannot be quantified as a goal or achievement. However, these achievements can be more clearly presented in the context of sector highlights. While not quantifiable, these activities and achievements are indicative of success in penetrating the market and influencing the energy efficiency of individual sectors. As the Focus Program matures and the sector activities evolve, Sector Highlights will be revised to show these successes and milestones.

Focus on Commercial Real Estate

• Focus on Commercial Real Estate is collaborating with the Real Estate Board of New York (REBNY), the City of New York, the US Environmental Protection Agency (US EPA) and the National Resources Defense Council (NRDC). Additionally, the major Commercial Real Estate companies participating in this Focus effort include: SL Green Realty, Trinity Real Estate, OMNI Development and Cogswell Realty.

• Focus on Commercial Real Estate has benchmarked 76 buildings and provided energy scans to two additional buildings comprising over 60 million square feet of New York City office space.

Focus on Institutions

• The Energy Smart Schools Program, a component of Focus on Institutions was awarded the “2007 ACEEE Exemplary Energy Efficiency Program” award.

• The Energy Smart Schools Program has facilitated 22 ENERGY STAR Building Labels to date, out of a total of 99 in the entire State. The program is currently working with an additional 84 eligible schools to complete the EPA ENERGY STAR Building Label process. The Energy Smart Schools Program has also facilitated seven EPA ENERGY STAR Leader Awards in six school districts


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recognizing district-wide energy-efficiency improvements. This is 100% of all Leader Awards earned in all of New York State, and 16% of all Leader Awards earned nationally.

• Through the Energy Smart Schools Program, 25% of all eligible schools space has participated in the Benchmarking Service, totaling 681 buildings in 144 districts. This service has documented a 22% energy efficiency improvement in schools that have participated in the program over the past six years, which is equivalent to an average annual cost savings of approximately $38,000 for a typical 100,000 square foot school building.

Focus on Municipal Water and Wastewater

• Focus on Municipal Water and Wastewater has developed and convened an Infrastructure Alliance. This Alliance consists of 21 professional associations, state regulatory agencies, public and private technical assistance providers, and academic institutions, all pledging to assist the development, promotion, and execution of the focus effort. This assistance may include: marketing and conference suggestions, access to mailing lists and listservs, becoming trained and providing training, providing space for mailing, outreach, etc.

• Focus on Municipal Water and Wastewater is partnering with the New York State Department of Environmental Conservation (DEC) and New York State Department of Health (DOH) to develop energy efficiency operator training. Focus is working to have this training integrated into the Basic Training Curriculum for Wastewater Operators this year with plans to add new, intermediate and advanced operator training in future years. This training will provide new operators with exposure to the benefits and opportunities of energy efficiency in their plants, with an emphasis on identification of easily implemented energy efficiency improvements.

• The Focus on Municipal Water and Wastewater has developed a partnership with the New York Environmental Facilities Corporation (EFC). The partnership is piloting an energy-efficient design review process for wastewater treatment facilities receiving funding through the EFC-Administered New York Clean Water State Revolving Fund Program (CWSRF). The incremental costs of implementing the energy efficiency options identified in the study would be funded under the CWSRF.

Focus on Hospitality

• Focus on Hospitality was launched at the International Hotel, Motel, and Restaurant Show at the Javits Center in New York City in November 2007. The initiative was presented to the Board of the New York State Hospitality and Tourism Association (NYSHTA) with several board members agreeing to serve on an industry roundtable to be chaired by the Focus on Hospitality contractor and NYSERDA. Likewise, NYSERDA has been invited to serve on an energy panel and to exhibit at the next NYSHTA annual conference in March 2008. Additionally, Focus on Hospitality has sent out more than 1,200 benchmarking solicitations to members of NYSHTA, inviting them to provide data to determine their baseline scores.

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3.9 High Performance New Buildings Program


The High Performance New Buildings Program objective is to create long-term changes in design practices by mainstreaming energy efficiency and green building concepts.13 The program is structured upon a performance-based approach in which incentives are determined by total building performance and are tiered to reward progressively more efficient designs. Through design-team incentives and recognition, the program promotes Green building projects and LEED® certification. Enhancements under the High Performance New Buildings Program include prescriptive and fast-track approaches using detailed custom analysis tools to ensure that smaller, simpler projects can be reviewed and incentives quickly awarded.

This mature and multi-faceted program addresses a complex and technically sophisticated market segment. NYSERDA program staff has been working within the design and new construction community since 1999, and the program has evolved to better meet the unique needs of this market segment. The 13-year program budget is $164.4 million.

Program Accomplishments

Table 3-20 shows the Program’s five-year goals and performance over the most recent 18 months. The Program is progressing well at this point in the five-year period.

Table 3-20. High Performance New Buildings Program – Long-Term Goals and Achievements

Activity

Program Goals (July 1, 2006




Customers receiving assistance (completed projects) 750 170 23%

Construction market affected (square feet) 75 million 19.9 million 27%

Participating A&E firms (completed projects) 800 272 34%


This section highlights key program outputs as identified through the logic model development work and associated market progress. All values reported are cumulative since program inception. Table 3-21 presents the key outputs for High Performance New Buildings through December 31, 2007. Table 3-22

13 The New Construction Program (NCP) was established to encourage energy-efficient design and building practices among architects and engineers and to urge them to inform building owners about the long-term advantages of building to higher energy standards. The program was renamed the High Performance New Buildings Program in 2006. Within this section, the old program name (NCP) is used when discussing evaluations that occurred prior to the name change. The name change to High Performance New Buildings reflects greater emphasis on whole building approaches to energy efficiency and green concepts.


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presents a sample of key logic model-driven indicators of program success, especially those related to market progress, as tracked by the evaluation and program activities.

Table 3-21. High Performance New Buildings Program – Key Program Outputs


Number of buildings participating 1,625 active projects (1,049 with encumbered dollars)

Square footage for active projects 171.7 million

Number of completed projects 797

Number of projects receiving TA studies 983

Number of projects receiving commissioning 218

Table 3-22. High Performance New Buildings Program – Key Market Indicators and Program Cumulative Progress

Topic Indicator Initial Value (2003, unless noted)

Follow-Up (2006, unless noted)

Most Recent (2007, unless noted)

Awareness of NYSERDA among non-participating A&E firms and owners

A&Es: 58% A&Es: 81% Owners: 73%

Not available, results expected for Q1 2008

A&E firm familiarity with energy efficiency measures and designs

Participant: 88% (n=44) Non-participant: 89% (n=85)


Participant: 95% (n=60)1 Non-participant: Not available


Building owner familiarity with energy efficiency measures and designs

Participant: 92% (n=26) Non-participant: 61% (2004)


Participant: 77% (n=60)1 Non-participant: Not available, results expected for Q1 2008

Importance of technical assistance for achieving savings according to participating designers and owners

Designers: 38% critically important or important (n=40) Owners: 76% critically important or important (n=31)

Designers: 67% critically important or important (n=48) Owners: 88% critically important or important (n=48)

Designers: 67% extremely or somewhat important (n=60) 1 Owners: 65% extremely or somewhat important (n=60) 1 Value of

Program Services

Importance of incentives for achieving savings according to participating designers and owners

Designers: 70% said incentives were important or critically important (n=44) Owners: 80% said incentives were important or critically important (n=32)

Designers: 98% said incentives were helpful or critical (n= 48) Owners: 90% said incentives were helpful or critical (n= 48)

Not available, question series no longer asked

Market Penetration

Percentage of New York market participating in the program.

0.4-2% (2000)

12% (2005)

32% (2007)


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Follow-Up (2006, unless noted)


Percentage of top architecture and engineering firms, by dollar value and number of projects, participating in the program

50% of architects by dollar value 60% of architects by number of projects 40% of engineers by dollar value and number of projects

80% of architects by dollar value 40% of architects by number of projects 60% of engineers by dollar value 50% of engineers by number of projects

90% of architects by dollar value 60% of architects by number of projects 40% of engineers by dollar value 60% of engineers by number of projects

1 Wording of the survey question addressing this indicator changed slightly from prior studies.

High Performance New Buildings Market Characterization Findings

In March 2008, the Summit Blue team completed a market characterization analysis for the non-residential new construction market. Results are summarized in this section.

New Construction Market Activity

As shown in Table 3-23, during the eight-year period ending December 31, 2007, nearly 54,000 non-residential new construction projects14 representing more than 532 million square feet of building area and more than $105 billion in project value were completed in New York. During this timeframe, new construction activity as measured by these three metrics was cyclical in nature. The market experienced a modest growth cycle in the early 2000s before moderating in 2003. This was followed by a stronger growth cycle during the years 2004 – 2006 with activity again moderating in 2007 but remaining at levels greater than those experienced in the early 2000s. Average annual project size, as calculated by dividing Area by Number of Projects, tended to decrease during the eight year period ending December 31, 2007; however, average annual project value, as calculated by dividing Value by Number of Projects, tended to increase during the timeframe, which is consistent with trends observed in the wider economy in terms of increased raw material and associated construction costs.

14 For the remainder of this section, the term “new construction” will encompass the following three project types which are eligible to participate in the HPNB program: new construction, additions to existing buildings, and substantial alterations/renovations to existing buildings.


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Table 3-23. Summary of new construction activity in New York, 2000-2007

Year Number of Projects Area (millions of ft2)

Value ($ billions)

2000 5,627 57.46 $10.29

2001 5,001 64.48 $12.01

2002 6,125 58.74 $11.31

2003 4,647 52.24 $9.36

2004 7,502 65.57 $11.72

2005 8,574 79.29 $13.88

2006 8,619 85.33 $18.83

2007 7,714 69.24 $17.61

Total 53,809 532.36 $105.02

Source: McGraw-Hill Construction Dodge New, Addition, and Alteration Database

Market Penetration by Geographic Area

As of December 31, 2007, over 1,600 projects representing nearly 172 million square feet of non-residential building space were participating in the HPNB program.15 These participating projects are distributed throughout New York generally in proportion to statewide new construction activity in terms of both number of projects and building area. As with statewide new construction activity, participating HPNB projects are concentrated in the Con Edison and National Grid utility service areas. When new construction activity associated with participant projects is considered in relation to statewide new construction activity, it becomes apparent that the HPNB program has achieved a significant market impact, a finding that is confirmed when the program’s market penetration is examined in terms of geography and structure type. That said, it is important to note that additional untapped market opportunities remain, particularly in the downstate region, and the HPNB program appears well positioned to leverage several convergent market forces to generate additional impacts.

As noted previously, more than 532 million square feet of building area was constructed in New York during the eight-year period ending December 31, 2007. During this same timeframe, HPNB program records indicate that nearly 172 million square feet of new construction activity participated in the program. This level of program activity corresponds to a market penetration of 32% in terms of building area since program inception, a rate that is within the range of penetration rates reported for similar programs operating in other jurisdictions.16 For example, the Energy Trust of Oregon’s Business Energy Solutions: New Buildings Program achieved a 12% penetration rate in terms of building area since

15 Participating projects are defined as: (1) projects that have been completed and received an incentive award from the HPNB program; and (2) active projects that currently have encumbered incentive dollars assigned to them. Projects that applied into the HPNB program but were subsequently cancelled are not included in the participating project definition. This definition is consistent with that used in the past to determine market penetration. Data obtained from the HPNB Program Quarterly Report through 12-31-07. 16 The McGraw-Hill Construction Dodge data likely underestimates the total size of the new construction market due to the difficulty of capturing data regarding smaller, lower-value projects that do not require construction permits. Thus, market penetration rates presented in this section may slightly overstate program accomplishments.


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program inception (2004-2007)17 and the California Savings by Design Program achieved a 47% penetration rate in terms of building area since program inception (1999-2005)18.

As shown in Figure 3-1, the HPNB program’s market penetration (calculated on the basis of building area) varies by utility area, and ranges from a high of 48% in the RG&E utility area to a low of 26% in the Con Edison utility area.19 This is true even though nearly half of program-reported impacts (78.6 million ft2 or 46% of cumulative program impact) occur in the Con Edison utility area, and is representative of the greater market activity occurring in the Con Edison area. Similar trends are present when HPNB market penetration is considered from the downstate/upstate regional perspective.

Figure 3-1. HPNB market penetration (building area) by utility area, cumulative 2000-2007

26%

45%

30% 48% 42% 35%-

25

50

75

100

125

150

175

200

225

250

275

300

325

Con Edison NGRID NYSEG RG&E CHG&E O&R

Tota

l Are

a (m

illio

ns of

squa

re fe

et)

HPNB Participating Projects Non-HPNB Projects Percentages indicate HPNB market penetration Sources: McGraw-Hill Construction Dodge New, Addition, and Alteration Database and HPNB Program Quarterly Report through 12-31-07

Market Penetration by Structure Type

An analysis of market penetration by structure type reveals that the HPNB program is performing well in engaging projects across building sectors. The program has had participating projects in each of the major structure types tracked by McGraw-Hill Construction Dodge and has influenced over half of the new construction activity in terms of building area that has occurred in the Government Service Buildings (69%), Miscellaneous Nonresidential Buildings (69%), and Schools, Libraries, and Labs (52%) building sectors during the 2000-2007 timeframe (Figure 3-2). The program has also influenced over one-third of the cumulative new construction activity in terms of building area that has occurred in the Commercial –

17 ACEEE, Compendium of Champions: Chronicling Exemplary Energy Efficiency Programs from Across the U.S., February 2008. 18 Itron, NRNC Market Characterization and Program Activities Tracking Report, 2005, Final, July 2006. This is the latest data available for this project. 19 The Program’s impact in the Con Edison service area is limited by the fact that many government buildings and schools located in New York City are not eligible for the System Benefits Charge programs. Furthermore, the prevalence of multifamily buildings in New York City is now primarily served by NYSERDA’s Multifamily Building Performance Program, further reducing the HPNB Program’s penetration in this area.


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Wholesale/Retail (39%), Industrial/Manufacturing (35%), and Hospitals and Health Treatment (34%) building sectors during this same timeframe.

Figure 3-2. HPNB market penetration by structure type, cumulative 2000-2007

13%

39%

52%

35% 34% 69% 69%0

20

40

60

80

100

120

140

160

180

200

Apartments Commercial -Wholesale/Retail

Schools, Libraries, & Labs Industrial/Manufacturing Hospitals & Health Treatment

Misc. Nonresidential Buildings

Government Service Buildings

Tota

l Are

a (m

illio

ns o

f squ

are

feet

)

HPNB Participating Projects Non-HPNB Projects Percentages indicate HPNBmarket penetration Sources: McGraw-Hill Construction Dodge New, Addition, and Alteration Database and HPNB Program Quarterly Report through 12-31-07

Focus on Green Buildings/LEED Market20

As of December 31, 2007, approximately 5,000 LEED accredited building professionals and four USGBC chapters were active in New York. The four local USGBC chapters are: New York Chapter (New York City), New York Upstate Chapter, Long Island Chapter, and New Jersey State Chapter.21 A review of the local chapter membership lists reveals that representatives from many influential design firms and professional organizations, including Arup, the Durst Organization, Cook + Fox Architects, the Croxton Collaborative, and the New York City Mayor’s Office of Long-Term Planning and Sustainability, are participating in the local USGBC chapters. Thus, as is discussed in more detail below, these local chapters likely represent leverage points to help the HPNB program gain additional traction in architecture studios and other professional and university programs, particularly in the downstate region

As of December 31, 2007, there were 37 LEED certified and 346 LEED registered projects in New York.22 A qualitative review of these projects reveals that the buildings represent a balanced mix of commercial, multi-family residential, retail, and public space, ranging in size from large downstate skyscrapers to small commercial retail establishments. While LEED activity in New York as measured

20 Several options exist for green building certification services; however, the USGBC’s LEED certification process is widely accepted as the benchmark for the design, construction and operation of high performance green buildings. As a result, this report uses metrics from the USGBC LEED program to characterize green building activity in New York. 21 NYSERDA assisted in the formation of the New York Chapter and the New York Upstate Chapter, and indirectly assisted in the formation of the Long Island Chapter. 22 Includes projects in the following LEED rating systems: New Construction, Core and Shell, Commercial Interiors, Schools, and Retail.


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by the number of LEED certified projects has been significant, it has lagged behind activity levels experienced in several comparison states (Figure 3-3). However, current and likely future LEED activity in New York as measured by the number of LEED registered projects appears strong, with New York trailing only California in terms of the current number of LEED registered projects. This trend becomes less pronounced when the LEED data are normalized by 2007 population estimates per state, as most states, including New York, have normalized values of approximately 0.02 LEED registered projects per capita (Figure 3-4). The exceptions to this trend are Oregon and Washington which have normalized values of 0.05 and 0.04 LEED registered projects per capita, indicative of a pronounced environmental mindset that permeates many aspects of the Pacific Northwest as well as the long history of energy efficiency programs run by electric utilities and other entities (e.g., the Energy Trust of Oregon, the Northwest Energy Efficiency Alliance, etc.) in the region. As noted in a report recently prepared for the Northwest Energy Efficiency Alliance, it is widely recognized that the Pacific Northwest is among the most progressive regions in the country in its acceptance of green building and energy efficiency.23

Figure 3-3. State-level comparison, LEED certified and registered projects

138

3772 84

52 65 53

830

346

282 277 260

196165

0

100

200

300

400

500

600

700

800

900

CA NY WA PA IL OR MA

State

Num

ber o

f LEE

D Pr

ojec

ts

Certified

Registered

Notes: (1) Includes projects in the following LEED rating systems: New Construction, Core and Shell, Commercial Interiors, Schools, and Retail. (2) Projects in the NYPA and LIPA service areas are included in the New York statewide totals to enable accurate and consistent comparisons with activity in other states. (3) Comparison states were selected on the following basis: California, Washington, Oregon, and Massachusetts because they have active energy efficiency programs similar to New York; Illinois because Chicago was an early city to pursue a “green” strategy; and Pennsylvania to provide comparison to another large mid-Atlantic state with big cities that has not historically had active energy efficiency programs. Source: U.S. Green Building Council, LEED Projects Directory (Data through 12/31/07)

23 PWP, BetterBricks Design and Construction Initiative, Market Progress Evaluation Report, April 2007.


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Figure 3-4. State-level comparison, LEED certified and registered projects, normalized by 2007 population

0.0040.002

0.011

0.0070.004

0.017

0.008

0.023

0.018

0.044

0.0220.020

0.052

0.026

0

0.01

0.02

0.03

0.04

0.05

0.06

CA NY WA PA IL OR MA

State

Num

ber o

f LEE

D Pr

ojec

ts P

er C

apita

(200

7 Po

pulat

ion

in 1

000s

)

Certified

Registered

Notes: (1) Includes projects in the following LEED rating systems: New Construction, Core and Shell, Commercial Interiors, Schools, and Retail. (2) Projects in the NYPA and LIPA service areas are included in the New York statewide totals to enable accurate and consistent comparisons with activity in other states. (3) Comparison states were selected on the following basis: California, Washington, Oregon, and Massachusetts because they have active energy efficiency programs similar to New York; Illinois because Chicago was an early city to pursue a “green” strategy; and Pennsylvania to provide comparison to another large mid-Atlantic state with big cities that has not historically had active energy efficiency programs. Sources: U.S. Green Building Council, LEED Projects Directory (Data through 12/31/07) and U.S. Census Bureau, 2007 Population Estimates

The HPNB program has had a significant influence to date on LEED activity in New York with nearly three-quarters of the LEED certified projects (74%) and over half of the LEED registered projects (57%) in the state having participated in the HPNB program.24 The HPNB program’s penetration into the LEED certified market is similar between the downstate and upstate regions, although the program has been slightly more successful engaging LEED certified projects in the upstate region. The HPNB program’s penetration into the LEED registered market is more dichotomous when considered from the downstate/upstate regional perspective, with the discrepancy between the program’s penetration rates in the two regions becoming more pronounced. However, it is important to note that all locations in the state with LEED registered projects have also been touched to some degree by the HPNB program; that is all have a portion of LEED registered projects that have participated in the HPNB program.

These results imply that the HPNB program has made substantial inroads to date into the LEED/green building market in New York but that opportunities remain for increased program penetration, especially

24 Market penetration in the LEED/green building market is calculated based on number of projects instead of building area due to data availability.


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in the downstate region. Sustained networking with the design teams and professional organizations most active in the New York City area will be essential for increasing program penetration downstate. In particular, HPNB program staff should continue cultivating relationships with the New York USGBC Chapter located in New York City, as well as with the other local USGBC chapters active throughout the state. If the HPNB program is successful in this endeavor, it is not hard to envision that the local USGBC chapters become primary conduits for identifying eligible green building projects throughout the state and steering those projects to the HPNB program.

Most Active Market Actors – Program and Statewide

The HPNB program has touched large numbers of design teams and building owners to date, and is well positioned to expand its participant base given its established track record and the growing market interest in the energy efficiency and green building strategies promoted by the program.

As of December 31, 2007, more than 1,600 projects representing nearly 172 million square feet of non-residential building space were participating in the HPNB program. According to program records, a diverse mix of market actors were involved with these projects including approximately 750 unique A&E firms25 and more than 1,100 unique building owners/managers. Approximately 37% of the unique A&E firms that have participated in the HPNB program are associated with more than one participating project (Figure 3-5), which is indicative of high levels of program satisfaction and an increased capacity for those firms to deliver quality projects that produce reliable benefits. In addition, repeat participation in the program increases the likelihood that the A&E firms will gain the experience and confidence necessary to replicate design strategies learned through the program in other new construction projects, thereby improving access to energy efficiency services for end-use customers and potentially generating spillover benefits attributable to the program. Given these benefits, HPNB program staff should continue to actively encourage repeat participation among participant A&E firms through the development and maintenance of strong relationships with the firms and associated professional organizations. Strong relationships with the design community represent a significant opportunity to enlist A&E firms to serve as de facto program sales agents that will enhance program outreach given limited available resources. Strong relationships will also assist in identifying new construction projects eligible for program participation early in the design process, which is critical to achieving designs that incorporate higher levels of energy efficiency.

25 Many active project records in the HPNB Program Tracking Database (Buildings Portal) do not have A&E firms specified, so the number of unique firms that have participated in the program may be higher.


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Figure 3-5. Participating A&E firms classified by number of HPNB projects

64%

30%

4%2% 0% 1%

0%

10%

20%

30%

40%

50%

60%

70%

1 2 - 5 6 - 10 11 - 15 16 - 20 > 20

Perc

ent o

f Par

ticip

atin

g A&

E Fi

rms

Number of HPNB projects

Source: HPNB Program Tracking Database (Buildings Portal)

The most active A&E firms statewide in terms of cumulative project value and number of projects during the timeframe January 1, 2006 – December 31, 2007 was also examined. A brief review of these data reveals that:

• Nine of the top ten architectural firms by statewide project value have participated in the HPNB program

• Six of the top ten architectural firms by statewide number of projects have participated in the HPNB program

• Four of the top ten engineering firms by statewide project value have participated in the HPNB program

• Six of the top ten engineering firms by statewide number of projects have participated in the HPNB program


Table 3-24 presents cumulative annual net energy and demand savings for the program from inception through December 31, 2007. Realization rates are developed to account for differences in program reported savings and performance of actual installations. The realization rate of 1.06 is applicable to the entire program period, and indicates that the program records were slightly under-estimating the actual energy savings. Attribution analysis determines, through various methods, whether the gross savings estimate should be further adjusted downward or upward for freeridership or spillover. The net-to-gross ratio for the High Performance New Buildings Program is 1.22, meaning that freeridership that is


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occurring is outweighed by spillover.26 Adjustments for realization rate, freeridership and spillover, and the ultimate program net-to-gross ratio are also shown in the table.

Table 3-24. High Performance New Buildings Cumulative Annual Energy and Peak Demand Savings (through December 2007)

Program-Reported Savings1

Realiz-ation Rate

Adjusted Gross

Savings


Net-to-Gross Ratio2

Net Savings

MWh/year 253,345 1.06 268,546 40% 85% 1.22 327,626

MW On-Peak 58.1 1.06 61.6 40% 85% 1.22 75.2

1 Update of program database in progress, 3rd quarter savings shown here. 2 Net-to-Gross Ratio = 1-Freeridership+Spillover (a weighted average of the NTG ratios estimated in the previous MCAC analysis and this current analysis is shown here).

Non-Energy Impacts

Non-energy impacts (NEIs) for the New Construction Program were last evaluated in 2005. The study found that customers valued NEIs at 40% of the value of the energy savings achieved in their new buildings. This value is similar to the value of NEIs found in an earlier study on the Program.


The June 2007 process evaluation report by Research Into Action cited several recommendations for program improvement.27 Each of these recommendations and responses or actions by program staff is noted below:

• While the Program already encourages whole building design and LEED® certification to increase per-project savings, it should consider building more personal strategic relationships with owners and design firms. These outreach efforts should be person-to-person wherever possible. Targeted marketing materials are important tools to support personal approaches, but cannot substitute for them.

The NCP has always used person-to-person outreach and interaction. During the second and third quarter of 2007, the program has increased the number of Technical Assistance providers from 10 to 14 and has added internal staff in an effort to influence projects earlier in the design process on an individual basis. The number of design charettes and presentations has also increased. In addition, new targeted marketing DVDs have been completed for upstate and New York City customer audiences, and a new, more user friendly PON is under development. These marketing enhancements will support the increased strategic, personal outreach described above.

26 The MCAC team continued its Integrated Data Collection (real-time data collection on all projects at the time of project completion) but found that results were similar enough to those reported in the 2006 New Construction Program MCAC evaluation that no modifications to the freeridership or spillover estimates were recommended. 27 Research Into Action, Best Practices Review New Construction Programs, Prepared for NYSERDA, June 2007. The old program name is referenced in this study.


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• Increase leveraging of market opportunities and trends. One of the key market opportunities resulting from new construction programs is support for more stringent energy codes (e.g., programs by California, MidAmerican, and Xcel). This, in turn, provides programs the opportunity to push for higher levels of efficiency. Other key trends to leverage include the building community’s greater concern for the environment and innovative training opportunities.

The NCP is working to capture additional program participation and savings due to recent heightened market interest in green/sustainable building designs. Market interest in LEED certification is on the rise. The NCP is attempting to bring more industry leaders into the program and highlight accomplishments on their projects that others can emulate. This strategy has worked particularly well in certain end use sectors such as libraries and grocery stores.

• Make service delivery as effective as possible. The NCP should further investigate the single-contractor approach used for Energy Trust, MidAmerican, and Xcel programs to see if this approach, in whole or in part, could be useful for improving the efficiency of service delivery. Findings suggest the single-contractor approach may also foster greater customer satisfaction, market penetration, and higher savings per project.

NCP staff feels that outsourcing program implementation will not necessarily increase the efficiency and effectiveness of service delivery, nor is an outside implementer the only way to achieve these ends. Outsourcing has several drawbacks including: possible increased costs, loss of the credibility that NYSERDA’s direct involvement lends when owners and designers are considering energy efficiency options, loss of institutional knowledge, and a steep initial learning curve. Furthermore, given the scale, scope, and levels of participation in the Program, the single-contractor approach is not practical. The Program processes between 300 and 400 project applications per year with the support of 14 Technical Assistance providers. However, NCP staff recognize that efficiency gains are possible under the current program delivery scheme, and would like to implement more sophisticated project tracking, coordination and communication systems. More internal support, especially in the area of information technology, is necessary to achieve this.

• Get projects off to a good start. The NCP should consider using enhanced project screening to help manage the project stream. It should also revisit its scoping meeting process to ensure it supports the best brainstorming of efficiency ideas, ongoing and clear interaction among the partners, and a strong commitment to meeting project schedules.

NCP staff feels they have addressed this recommendation with several recent changes including the development of a simplified analysis tool for custom measures, work on a new measure pricing tool/data set, and the planned elimination of pre-qualified measures. The upgrade to the custom measure analysis approach was completed in early 2007 and rolled out to all TA contractors with complete training on its use. The streamlined tool provides project savings and economic benefit outputs in a one-step process, allowing a more efficient and less costly TA study to be completed at the beginning of a project (often times, the TA studies can be generated for under $5K using this tool, thus there is no required customer contribution). The measure pricing tool/data set will help TA consultants complete their analysis more rapidly, and eliminate the need to refer to Means or other data for every project. The elimination of pre-qualified measures will foster the program’s efforts to support the best energy efficiency designs, and will match with the market’s heightened interest in a more holistic approach to energy efficiency in new and substantially renovated building.

• The NCP managers should continue to review materials from other leading programs to gather new ideas. They should also initiate greater communication with other program managers to exchange lessons learned and to explore venues for ongoing communication.

29BFlexTech Technical Assistance Program

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NCP staff continues to review best practices and benchmark their efforts against other programs nationally. A review of other programs’ application forms was recently conducted as part of the development of the new PON document.

3.10 FlexTech Technical Assistance Program


The FlexTech Technical Assistance Program is a consolidation of services previously offered under the FlexTech, Technical Assistance, and the Energy Audit Programs. This change is part of a continuous stream of evolutionary revisions the program has undergone for the past eight years.

The purpose of the Program is to provide customers with objective and customized information to facilitate wiser energy efficiency, energy procurement, and financing decisions. The Program is available to all commercial and industrial sectors. The Program strives to increase productivity and economic competitiveness by identifying and encouraging the implementation of cost-effective energy-efficiency measures. Studies also include operations management, energy procurement, and on-site Combined Heat and Power (CHP). Cost-shared assistance is provided for detailed studies from energy engineers and experts. Small customers are eligible for quick walk-through energy audits, with the cost share reimbursed upon implementation of recommendations. Participants may use NYSERDA-contracted or customer-selected consultants.



Shown in Table 3-25 is the FlexTech Technical Assistance goal and progress in terms of the number of customers served. With 26% of its five-year goal achieved, the Program is performing as expected 18 months into the measurement period.

Table 3-25. FlexTech TA Program – Long-Term Goals and Achievements

Activity Program Goal



2007

% of Goal Achieved

Customers receiving assistance (approved proposals) 3,000 770 26%


This section highlights key program outputs and market progress. All values reported are cumulative since program inception. Table 3-26 presents the key outputs for the FlexTech Technical Assistance Program through December 31, 2007.


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Table 3-26. FlexTech TA Program – Key Program Outputs


Customers receiving assistance (approved proposals) 4,096

Number of studies completed 3,725

Total funds committed $28,300,000

Customer cofunding of studies $27,300,000

Participating allies (ESCOs and engineering firms) 227


Table 3-27 presents cumulative annual net energy and demand savings for the program from inception through December 31, 2007. Realization rates are developed to account for differences in program reported savings and performance of actual installations. As the TA Program recommends much more savings than are implemented, the program-reported savings shown here have the adoption rate and realization rate already incorporated. Attribution analysis determines, through various methods, whether the gross savings estimate should be further adjusted downward or upward for freeridership or spillover. Adjustments for realization rate, freeridership and spillover, and the ultimate program net-to-gross ratio are also shown in the table.

The Technical Assistance Program database received an in-depth review by the Impact Assessment team for discrepancies in project entries, for example, high $/kWh, missing savings, etc. Those findings have been shared with program staff and will be integrated into the database.

Table 3-27. FlexTech TA Program Cumulative Annual Energy and Peak Demand Savings (through December 2007)1


Realization Rate

Adjusted Gross

Savings


Net-to-Gross Ratio2

Net Savings

MWh/ year 699,148 1.0 699,148 25% 48% 1.14 797,029

MW 130.0 1.0 130.0 25% 48% 1.14 148.2

MW Enabled 9.7 1.0 9.7 25% 48% 1.14 11.1

MMBtu 2,822,667 1.0 2,822,667 25% 48% 1.14 3,217,840 1 In the 3rd quarter report, savings were incorrecly reported with the net-to-gross ratio applied twice. This has been fixed for this report. 2 Net-to-Gross Ratio = 1-Freeridership+Spillover (a weighted average of the NTG ratios estimated in the previous MCAC analysis and this current analysis is shown here).

Non-Energy Impacts

NEIs for the Technical Assistance Program were evaluated in 2004. The study found that customers valued NEIs at 37-55% of the value of the energy savings achieved on their projects.

29BFlexTech Technical Assistance Program

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The May 2007 Technical Assistance Program MCAC evaluation report by Quantec and Summit Blue Consulting cited recommendations for program improvement.28 Each of these recommendations and responses or actions by program staff is noted below:

• To potentially aid in and increase the adoption of recommended measures, TA Program staff should ensure that the technical assistance studies contain an executive summary that can be readily understood by non-technical management. Respondents indicated that management is typically the ultimate decision-maker, and is often motivated by the economics of the project. The executive summary, therefore, should clearly indicate the cost-effectiveness of each of the recommended measures.

• Because the confidence in the findings of any evaluation is directly related to the quality of the data used in conducting the evaluation, the TA databases should be regularly maintained and used to produce the quarterly reports. Currently, the quarterly reports are based on projections, not on actual Program data and participation rates.

TA staff noted that based on ongoing evaluation work, both of the above recommendations were implemented prior to the completion of the Technical Assistance Program MCAC Evaluation report.

• Recommendations were also made regarding improved reliability of the program’s reported non-electric savings, measurement of the adoption rate curve as it changes from year to year, and revisions to the savings realization rate based on site inspections and adjusted impact calculations.

These recommendations will be addressed through current and future impact evaluations.

28 Quantec, LLC and Summit Blue Consulting, LLC, Technical Assistance Program MCAC Evaluation Report, Prepared for NYSERDA, May 2007.

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4 Residential and Low-Income Programs

4.1 Overview of the Residential and Low-Income Programs

4.1.1 Residential Programs

The residential energy efficiency programs are designed to influence decisions regarding electricity use and to reduce households’ energy bills. The programs also address natural gas and petroleum use as part of a comprehensive energy service package. Progress on the residential programs, briefly described below, is discussed in this section. More complete program descriptions can be found in the System Benefits Charge Proposed Plan for New York Energy $martSM Programs (2006-2011).1

Single Family Home Performance Program. This program, which addresses one- to four-unit homes, includes the Home Performance with ENERGY STAR® Initiative (HPwES) for existing homes, and the New York ENERGY STAR Labeled Homes Initiative (NYESLH) for newly constructed homes. On the supply side, these initiatives support market development through recruitment, training and incentives for builders and contractors, in order to encourage them to offer energy efficient options. On the demand side, these initiatives market the benefits of energy efficiency to residential consumers in order to increase demand for efficient products and services. Both HPwES and NYESLH have low-income components providing additional incentives for low-income households.

Multifamily Building Performance Program. The Multifamily Building Performance Program provides a single point of entry for multifamily building owners and developers interested in improving the energy efficiency of new and existing buildings. The ENERGY STAR Multifamily Building Initiative (EMP) – the track for new buildings (and complete gut-rehabilitation projects) – concentrates on providing technical assistance to mid-stream market participants and incorporates renewable technologies, advanced metering technologies, real-time pricing strategies, and combined heat and power systems, especially for electrically-heated buildings with base domestic hot water loads. The Multifamily Building Performance Initiative – the track for existing buildings – develops market-based business opportunities for building auditors, financial packagers, designers, architects, and construction inspectors in order to enhance the energy services infrastructure. The Multifamily Building Performance Initiative also has a low-income component, providing technical and financial assistance to low-income building owners and their tenants to make energy efficiency improvements, thus reducing energy bills and providing increased health and safety benefits to building occupants.

Market Support Program. The New York Energy $martSM Market Support Program provides support services to the building performance and low-income programs by increasing the availability of energy-efficient products and by increasing consumer demand. There are three major components to the Market

1 Found on NYSERDA’s Website at: www.nyserda.org/publications/sbcOperatingPlan2006.pdf.


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Support Program: 1) the New York Energy $martSM Products Initiative, which seeks to increase the availability and sales of residential energy-efficient appliances, lighting and home electronics products; 2) the Program Marketing Initiative, which provides marketing for the Single Family Home Performance Program, the Multifamily Building Performance Program, the summer and winter tips campaigns, and leveraged campaigns such as “Change a Light, Change the World,” as well as marketing assistance to mid-stream partners; and 3) the GetEnergySmart.org Website, which provides consumers with information about programs, names of contractors and retailers, and energy efficiency tips, and provides potential program partners with participation information, serving as a communication tool with current partners.

Communities and Education Program. The Communities and Education Program offers market infrastructure development for both short-term program support and long-term market development for residential energy efficiency, with the aim of helping to develop an energy-conscious society. The two major components are the Energy Smart Students (ESS) Initiative and the New York Energy $mart Communities (NYE$C). ESS provides energy efficiency curricula for teachers of students in grades K-12. ESS is part of NYSERDA’s effort to offer comprehensive services to K-12 schools, including educational curriculum support, facilities improvements, and transportation efficiency improvements. ESS offers teacher workshops to introduce hands-on, project-based lessons aligned with the New York State teaching standards. NYE$C facilitates bringing organizations and agencies together to develop and support local projects that serve as demonstrations of energy efficiency and renewable technologies and show how these projects create economic, social, and environmental benefits. NYE$C also provides face-to-face education to the community on various energy topics and New York Energy SmartSM

programs. Finally, NYE$C has primary responsibility for recruiting mid-stream partners for New York Energy SmartSM residential programs.

4.1.2 Low-Income Programs

The low-income programs are designed to reduce the energy burden of low-income households by improving energy efficiency and providing energy management and aggregated energy procurement services. Evaluations of the following low-income programs are discussed in this section:

EmPower New YorkSM. The EmPower New YorkSM program provides energy efficiency services to utility customers earning less than 60% of the State median income and households enrolled in utility low-income payment assistance programs, targeting both owners and tenants of one- to four-family homes and multifamily buildings with fewer than 100 units. The program coordinates with the delivery of federal weatherization services through New York State Division of Housing and Community Renewal (DHCR).

Buying Strategies and Energy Awareness Program. The Buying Strategies and Energy Awareness Program consists of four initiatives: 1) the Buying Strategies Initiative, which assists the Office of Temporary and Disability Assistance to negotiate discounts on purchases of home heating oil by the Low-Income Home Energy Assistance Program, and also includes a preventive maintenance component for oil-fired heating systems; 2) the Targeted Marketing and Outreach Initiative, which seeks to increase participation in all NYSERDA, State, federal, utility, and community-based low-income energy efficiency and energy assistance programs, by targeting hard-to-reach (HTR) customers such as the elderly, the low-income population, and the non-English speaking population; 3) Low-Income Forum on Energy (LIFE), which provides a forum – large statewide conferences, smaller regional meetings, and steering committee meetings – where energy industry professionals, policy makers, agencies serving the low-income population, and energy program implementers can discuss energy issues relevant to the low-

31BResidential and Low-Income Evaluation Activities

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income sector; and 4) contributions of funding to the Energy Smart Students (ESS) Initiative (described above).

4.2 Residential and Low-Income Evaluation Activities

Table 4-1 provides a snapshot of all recently completed, in-progress, and planned evaluation activities for the Residential and Low-Income sector programs. The evaluation activities completed in 2007 are highlighted within Section 4, and were used along with results from past evaluations to inform the overall findings and conclusions presented in this report.2 For evaluation projects currently underway or planned, the anticipated completion date shown in Table 4-1 coincides with when NYSERDA expects to feature results in future New York Energy $martSM quarterly or annual evaluation and status reports.

Table 4-1. 2007 Residential and Low-Income Program Evaluation Activities

Program Name Evaluation Activities Completed in 2007 Evaluation Activities Underway or Planned (Anticipated Completion Date)

Residential Sector Program Logic

NY Oversample to the 2006 National ENERGY STAR Survey

New York City Market/Process Evaluation (Q3 2008)

Low-Income Sector Program Logic None Planned

Single Family Home Performance Program

Measurement & Verification Update on Home Performance

Market Characterization for Home Performance

Market Assessment for Home Performance (Q1 2008)

Prospective Benefits for Home Performance (Q1 2008)

Market Characterization and Assessment for ENERGY STAR Homes (Q2 2008)

Year-End Impact Evaluation Database Review1 for Home Performance (Q1 2008)

Multifamily Building Performance Program

Initial Process Evaluation (Program Design Issues)

Phase 1 Process Evaluation Year-End Impact Evaluation Database

Review for AMP 1

None Planned

Market Support Program

Program Logic Market Share & Lighting Evaluation Study Update of Market-Based Program Savings

Update of Market-Based Program Savings (Q1 2008)

Communities and Education Program Phase 1 Process Evaluation

Phase 2 Process Evaluation (Q2 2008) Phase 3 Process Evaluation (Q4 2008)

2 Program logics were all completed in the first three quarters of 2007. Thus, the program logic diagrams themselves are not reprinted in this report.


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Program Name Evaluation Activities Completed in 2007 Evaluation Activities Underway or Planned (Anticipated Completion Date)

EmPower New York Full Process Evaluation

Full Measurement & Verification Study

Non-Energy Impacts Study on Arrearage Reduction (Q2 2008)

Year-End Impact Evaluation Database Review1 (Q1 2008)

Buying Strategies and Energy Awareness Program

Program Logic None Planned


4.3 Residential and Low-Income Evaluation Findings

Significant progress is being made by the Residential and Low-Income portfolio. This section summarizes key evaluation findings from the latest set of evaluation activities, and from the cumulative body of work conducted by NYSERDA and its evaluation contractors over the past several years.

4.3.1 Energy, Peak Demand and Fuel Savings

Through NYSERDA’s Impact Evaluation activities, independent third-party contractor teams assessed the energy and peak demand savings reported for its Residential and Low-Income programs. Methods used in this assessment included on-site verification of equipment installation and functionality, and review of NYSERDA’s files and engineering estimates for reasonableness and accuracy. Based on this review, the contractors adjusted the savings reported by NYSERDA. In turn, the contractors further adjusted these figures, based on primary research, to account for freeridership and spillover.

Table 4-2 through Table 4-4 summarize the estimated electricity savings, peak demand reductions, and fuel savings for each Residential and Low-Income program. Savings for the Low-Income program elements are broken out in the footnotes to each table.

Several long-term goals were set for the third New York Energy $martSM Program funding cycle. These goals established levels to reach, by June 30, 2011, for energy and peak demand savings as well as several other key metrics of program success. Overall, in the first 18 months of the five-year measurement period, two out of six Residential and Low-Income programs have achieved expected electricity savings (i.e., 30% of the five-year goals). Three out of five programs have reached expected levels on the goals for other fuel savings. There is no goal for peak demand reduction in this sector. Progress toward the five-year goal is shown for each applicable program in Table 4-2 and Table 4-4. A few key programs are either progressing more slowly than planned or have not yet reported progress toward goals. Reasons are as follows:

• The Multifamily Building Performance Program for Existing Buildings has reached 3% of the electricity savings goal and 2% of the other fuel savings goal. This program is still in the process of significant change, combining the three former programs into one streamlined program offering. This emphasis on program development, and a transition to a new implementation contractor, have slowed intake somewhat.

32BResidential and Low-Income Evaluation Findings

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• The Multifamily Building Performance Program for New Buildings has not yet reported any electricity or other fuel savings, although the program did have 67 applications comprising 4,745 housing units in the design phase by the end of December. This is a completely new program launched in November 2006.

Table 4-2. Residential and Low-Income Program Electricity Savings through December 31, 2007 and Progress toward Five-Year Goals



June 30, 2006

December 31, 2007

Five-Year Goal through June 30, 2011

Progress Toward

Five-Year Goal (%

achieved)1

Single Family Home Performance Program: Existing Homes2 Con Edison

13.5

0.2

16.9

0.3

26.1

N/A

13%

N/A

Single Family Home Performance Program: New Homes Con Edison

7.3

0.7

14.8

0.9

8.9

N/A

85%

N/A

Multifamily Building Performance Program: Existing Buildings3 Con Edison

31.0

19.0

37.4

23.7

225.5

N/A

3%

N/A

Multifamily Building Performance Program: New Buildings Con Edison

0

0

0

0

24

N/A

0%

N/A

Market Support Program Con Edison

539.1a 305.2

647.0b 359.4b

200 N/A

54% N/A

EmPower New York4 Con Edison

20.1 1.6

34.2 3.6

51.1 N/A

28% N/A

Con Edison Residential & Low-Income Total 326.7 388.0 N/A N/A

Statewide Residential & Low-Income Total 610.9 750.3 N/A N/A

a This baseline savings figure does not match the 2nd quarter 2006 published value. The impacts for Energy Star Products are derived annually from market data, and the 2nd quarter savings value was estimated retrospectively to provide a more accurate baseline for measuring progress. b Savings for the New York Energy $martSM Products Program are estimated based on market data, survey research, and deemed savings values. The last update, completed and applied in Quarter 1 2007, added electricity, demand, and fuel savings for both 2005 and 2006. The cumulative annual savings do not yet reflect additions for 2007 from the New York Energy $martSM Products Program. Additions for 2007 will be applied, to the extent possible, in the Quarter 1 2008 report. 1 Percentage represents the difference between the June 30, 2006 and December 31, 2007 achievements divided by the five year goal. 2 Savings for the low-income Assisted Home Performance Program (6.0 GWh) are included in this row. 3 Savings for the low-income Assisted Multifamily Program (19.5 GWh) are included in this row, the remainder are savings from the closed Residential Comprehensive Energy and Direct Install programs. 4 Savings for the closed program Weatherization Network Initiative (8.2 GWh) are included in this row. N/A – Not Applicable


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Table 4-3. Residential and Low-Income Program Peak Demand Reductions through December 31, 2007

Demand Savings (MW)


June 30, 2006 December 31, 2007


2.0 0.0

2.4 0.0


0.9 0.2

4.5 0.3


3.9 1.7

26.7a 2.5


N/A N/A

0 0


104.3 56.4

121.6b 69.0b

EmPower New York3 Con Edison

2.5 0.0

4.9 0.6

Con Edison Residential & Low-Income Total 58.3 72.5

Statewide Residential & Low-Income Total 113.7 160.1

Note: No goals were set for peak demand savings. 1 Savings for the low-income Assisted Home Performance Program are included in this row. They represent 0.8 MW of these savings. 2 Savings for the low-income Assisted Multifamily Program are included in this row. They represent 24.4 MW of these savings. 3 Savings for the closed program Weatherization Network Initiative are included in this row. They represent 1.3 MW of these savings. a During the third quarter of 2007 a large project with Rochester Housing Authority, with 2,400 units in 200 buildings was completed. b Savings for the New York Energy $martSM Products Program are estimated based on market data, survey research, and deemed savings values. The last update, completed and applied in Quarter 1 2007, added electricity, demand, and fuel savings for both 2005 and 2006. The cumulative annual savings do not yet reflect additions for 2007 from the New York Energy $martSM Products Program. Additions for 2007 will be applied, to the extent possible, in the Quarter 1 2008 report. N/A – Not Applicable


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Table 4-4. Residential and Low-Income Program Fuel Savings through December 31, 2007 and Progress toward Five-Year Goals



June 30, 2006 December 31, 2007

Five-Year Goal through June 30, 2011

Progress Toward

Five-Year Goal (%

achieved)1


454,958a

8,599

728,052b

13,833

1,199,000

N/A

23%

N/A


376,103c

30,088

563,106

33,786

518,500

N/A

36%

N/A


43,932

12,581

183,667

67,957

6,014,500

N/A

2%

N/A


N/A

N/A

0 0

649,000

N/A

0%

N/A


341,920 184,945

420,464d 227,429d

N/A N/A

N/A N/A

EmPower New York Con Edison

59,341 0

125,136 497

108,500 N/A

61% N/A

Con Edison Residential & Low-Income Total 236,212 343,502 N/A N/A

Statewide Residential & Low-Income Total 1,276,254 2,020,425 N/A N/A 1 Percentage represents the difference between the June 30, 2006 and December 31, 2007 achievements divided by the five year goal. 2 Energy savings for the low-income Assisted Home Performance Program are included in this row. They represent 262,100 MMBtu of these savings. 3 Energy savings for the low-income Assisted Multifamily Program are included in this row. They represent all of these savings. a This value does not match an earlier published value due to changes made to the program tracking database in response to evaluation completed by the M&V contractor. b The fuel savings for a small number (550) of non-SBC projects funded under the National Grid utility rate settlement are included in this figure. All non-SBC savings will be removed for the Quarter 1 2008 report. c This value does not match earlier published values as the realization rate for MMBtu was reassessed during this period to a lower level and applied retroactively in order to accurately reflect progress made during the year. d Savings for the New York Energy $martSM Products Program are estimated based on market data, survey research, and deemed savings values. The last update, completed and applied in Quarter 1 2007, added electricity, demand, and fuel savings for both 2005 and 2006. The cumulative annual savings do not yet reflect additions for 2007 from the New York Energy $martSM Products Program. Additions for 2007 will be applied, to the extent possible, in the Quarter 1 2008 report. N/A – Not Applicable


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4.3.2 Summary of Other Key Program Impacts and Results

Across the programs, 26 additional five-year goals were set for other key metrics besides energy savings, such as the number of customers receiving assistance, funds leveraged, allies participating, and outreach activities completed. Overall, the programs are making progress with respect to these other goals. Performance on eight out of the 26 goals has reached expected levels (approximately 30% or more achieved) 18 months into the five-year period. Four of the goals have already been surpassed. The results of each program’s progress toward its stated goals are shown in table format in the subsequent sections.

Select longer-term achievements and evaluation findings are as follows:

• More than 11,000 ENERGY STAR labeled homes have been built, and more than 18,000 existing homes have received energy efficiency measures. Considering cumulative participation in Home Performance with ENERGY STAR of 18,158 completed projects, market penetration is currently calculated at between 9.5% and 15.3% of the eligible market.

• As detailed in Section 4.3.3 below, more than 58,300 low-income households have been served by the New York Energy $martSM Program.

• As described in Section 4.3.4 below, in 2006, 64% of customers within the NYSERDA Program area reported recognizing the ENERGY STAR label without being prompted, and 81% reported recognizing the ENERGY STAR label with prompting. While the 64% unaided recognition for 2006 was a small increase over the 2004 percentage of 62%, the 81% aided recognition percentage represents a statistically significant increase over the 2004 value of 72%.

• Nearly 630 retail store fronts and almost 30 manufacturer partners are participating in the Market Support Program.

• Since program inception, 169 existing multifamily properties comprising 47,747 individual units have received efficiency services under the Multifamily Building Performance Program. A total of 72 new construction multifamily projects compromising 5,080 individual units have applied to receive services.

• The process evaluation team found that the new Multifamily Building Performance Program was well-positioned to begin. The program design is both streamlined and more market-based than in the past. Although several recommendations were made, a second process evaluation study found the record in the first eight months of the program to be impressive, and the Partners interviewed were all quite satisfied.

• Since its inception, the Communities and Education Program has helped train 2,393 teachers on teaching about energy issues at 128 workshops. An estimated 234,601 students have been reached. More than 800 meeting and outreach sessions have been held, attracting more than 97,000 attendees.

• More than 800 oil vendors are participating in the Buying Strategies and Energy Awareness Program.

4.3.3 Low-Income Customers Served

In total, more than 58,000 low-income customers have been served by the New York Energy $martSM Program. Approximately one-third of the customers served are in the Con Edison utility area where the


4-9

low-income population is concentrated in larger multi-family buildings. Table 4-5 shows the distribution of low-income customers served by program and utility service area.

Table 4-5. Number of Low-Income Households Served by Program and Utility Area

Utility Service Area Assisted Multifamily

Program

EmPower Weatherization Network Initiative1

Assisted Home

Performance

Direct Install1

Total

Central Hudson Gas & Electric

712 371 97 86 388 1,654

Con Edison 5,928 1,882 1,292 122 9,612 18,836

National Grid 4,698 9,276 2,026 979 0 16,979

NYSEG 861 7,661 775 4,583 0 13,880

Orange & Rockland 0 212 54 18 235 519

Rochester Gas & Electric

4,617 902 357 591 0 6,467

Total 16,816 20,304 4,601 6,379 10,235 58,335 1 Closed programs.

4.3.4 NYSERDA Oversample to National ENERGY STAR Survey

In recent years, the Consortium for Energy Efficiency (CEE) has conducted an annual survey of households across the nation to examine awareness and purchase of ENERGY STAR products. In 2001, 2004 and 2006, NYSERDA elected to fund an over-sample within the New York Energy $martSM service area.3 This provided an opportunity to collect time series data for the NYSERDA area and to draw comparisons to the national results.

Throughout this discussion, both national results excluding the sample from the NYSERDA area (“national excluding NY”) and national results including the sample from the NYSERDA area (“national total”) are presented. The national results, excluding New York, are provided to allow a ready comparison between the results for NYSERDA area respondents and results for respondents from the rest of the country; the national total results are provided to offer an overview and trends for the nation as a whole. As in previous years’ studies, to consider the effect of publicity on national awareness, the designated metropolitan areas (DMAs) in the national sample frame were classified into high and low publicity areas. Select findings from this evaluation include:

• In 2006, 64% of customers within the NYSERDA area reported recognizing the ENERGY STAR label without being prompted by a description or visual image of the label, and 81% reported recognizing the ENERGY STAR label with prompting (i.e., after being shown a visual image of the label). While the 64% unaided recognition for 2006 was a small increase over the 2004 percentage of 62%, the 81% aided recognition percentage represents a statistically significant increase over the 2004 value of 72%.

3 This study was also summarized in the June 2007 Quarterly Evaluation and Status Report. For the full report, please see Summit Blue Consulting, New York Energy $martSM Products Program Market Characterization, Assessment and Causality Evaluation, Prepared for NYSERDA, June 2007.


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• Open-ended responses were used to measure understanding of the ENERGY STAR label. By far, the message that respondents most commonly associated with the label in 2006 was “energy efficiency or energy savings,” which is considered “high” understanding of the label. In the NYSERDA over-sample, 54% of households associated this message with the ENERGY STAR label, which was very similar to the result in 2004 when 56% of the households associated “energy efficiency or energy savings” with the label. In the 2006 national (total) survey, 57% of households associated this message with the ENERGY STAR label, significantly higher than the 2004 national result when only 51% gave this response.

• Nationally (excluding New York), 33% of the respondents who reported purchasing an ENERGY STAR labeled product said that they were “very much” influenced by the presence of the ENERGY STAR label; in NYSERDA’s area, 37% gave the same response. A total of 79% of the national (excluding New York) respondents reported that they were influenced “very much, somewhat, or slightly” by the ENERGY STAR label, while 88% of NYSERDA respondents reported being influenced at the same level. The difference between the percentage of respondents nationally (excluding New York) and the percentage in NYSERDA’s area who said that they were influenced to some extent is statistically significant at the 90% level.

• Fully half of NYSERDA respondents (50%) and close to half of national respondents (excluding New York) (45%) reported that they would be “very likely” to recommend ENERGY STAR products to a friend. These values both represent statistically significant differences from the 2004 results at the 90% level. In 2006, 78% of both NYSERDA and national (total, as well as excluding New York) respondents reported that they were at least “somewhat likely” to recommend ENERGY STAR products to a friend.

4.4 Single Family Home Performance Program


The Single Family Home Performance Program addresses one- to four-unit homes through the New York ENERGY STAR® Labeled Homes Initiative (NYESLH) for newly constructed homes, and the Home Performance with ENERGY STAR Initiative for existing homes. Both of these efforts are market-based. On the supply side, these initiatives use recruitment, training, and incentives to encourage builders and contractors to offer energy efficient options. On the demand side, the initiatives market the benefits of energy efficiency to residential consumers to increase demand for products and services that make homes more efficient.

NYESLH provides technical assistance and financial incentives to one- to four-family home builders to encourage the adoption of energy-efficient design features and the selection and installation of more energy-efficient equipment in new construction and substantial renovation projects. Participating builders construct New York ENERGY STAR labeled homes that use approximately 30% less energy than homes built to the current energy code. In addition, the program is an enhanced version of the EPA’s ENERGY STAR Labeled Homes Program, because in order to earn the New York ENERGY STAR home label, these homes must include a qualified ventilation system; have electrical savings measures (either ENERGY STAR lighting or appliances) that produce annual electricity savings of 600 kWh, compared to standard efficiency measures; and have their performance verified by a certified Home Energy Rating System Rater (HERS) who acts as the independent third party, ensuring that these homes meet program performance criteria.

33BSingle Family Home Performance Program

4-11

The Home Performance with ENERGY STAR (HPwES) Initiative is designed to enhance the current market capacity for delivering comprehensive energy efficiency services to existing one- to four-family residences. The program seeks to create a “one-stop shopping” experience for consumers looking to make energy efficiency improvements to their homes. This is accomplished by requiring the participating contractor who provides the comprehensive home assessment to have the capability to prepare a scope of work and install the energy efficiency measures. The program also fosters consumer protection by offering training, a robust quality assurance/quality control (QA/QC) process and a one-year warranty, and by requiring certification and accreditation for participating contractors.

Energy efficiency improvements covered by HPwES include building shell measures such as air sealing and insulation, electric measures like ENERGY STAR refrigerators, heating measures such as boilers and furnaces, cooling measures such as ENERGY STAR room or central air conditioners, and certain renewable energy technologies. Eligible homeowners can elect to receive financing from the New York Energy $martSM Loan Fund or the New York ENERGY STAR financing option.

Integrated with these market-based efforts is the Low-Income Single Family Initiative, which includes the Assisted Home Performance with ENERGY STAR effort and the Assisted New York ENERGY STAR Labeled Homes effort. This initiative provides additional incentives for low-income households, in some cases up to 50% of the approved work scope. In addition, participants can use the New York Energy $martSM Loan Fund to further offset costs. The “Assisted” components of the Single Family Performance Program are available to residents with up to 80% of Area Median Income, or 80% of State Median Income, whichever is higher for the county (as compared to the 60% of state median income criterion used for participation in the federally-funded Weatherization Assistance Program). Logic models for ENERGY STAR Homes and Home Performance can be found at the end of Section 4.

The 13-year program budget is $185.8 million, which includes $78.3 million for low-income.



Table 4-6. Single Family Home Performance Program – Long-Term Goals and Achievements




December 31, 2007

% of Goal Achieved

New York ENERGY STAR Labeled Homes Initiative

New ENERGY STAR Labeled Homes built 10,750 3,572 33%

New low-income ENERGY STAR Labeled Homes built 4,000 9 <1%

Home Performance with ENERGY STAR Initiative

Existing homes served (receiving treatment) 16,125 6,262 39%

Existing low-income homes served (receiving treatment) 10,500 2,029 19%


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This section highlights key program outputs as identified through the logic model development work and related market progress. All values reported are cumulative since program inception. Table 4-7 presents the key outputs for Single Family Home Performance buildings through December 31, 2007. Table 4-8 and Table 4-9 present a sample of key logic model-driven indicators of program success, especially those related to market progress, as tracked by the evaluation and program activities.

Table 4-7. Single Family Home Performance Program – Key Program Outputs



Number of completed projects by type 11,058 projects completed including: 10,090 Certified Single-family labeled homes 248 Assisted NYESLHs 542 Model homes 178 Display homes

Number of “active” participating builders (built at least one home) 161

Dollar value of incentives paid $14.5 million

Home Performance with ENERGY STAR Initiative

Number of homes treated 18,105

Number of participating BPI-certified contractors and firms 550 BPI-certified technicians 176 Participating BPI-accredited firms

Dollar value of incentives paid $11.4 million in participating contractor incentives


4-13

Table 4-8. ENERGY STAR Labeled Homes Program – Key Market Indicators and Program Cumulative Progress



Consumer awareness of the ENERGY STAR label for new homes

59% of participating home buyers (those who purchased a NYESLH) were aware of the ENERGY STAR label for homes 52% of non-participating home buyers are aware of the label

92% of participating home buyers were aware of the ENERGY STAR label for homes


Builder familiarity with energy efficiency measures and equipment

82% of participating builders reported that their familiarity had increased significantly (29%) or somewhat (53%) as a result of the program (2004 IDC survey)

85% of the participating builders reported that their familiarity had increased significantly (31%) or somewhat (54%) in the last few years 65% of the non-participating builders reported increasing familiarity

Availability of New York ENERGY STAR homes

73% of NYESLH purchasers in 2002-2003 reported that NYESLHs were very or somewhat available

72% of NYESLH purchasers in 2004-2005 reported that NYESLHs were very or somewhat available

Energy efficiency measures showing changes in availability

Not Available Builders reported that efficient lighting (93% of participating builders), water heaters (92%), central ACs (86%), and furnaces/boilers (83%) had all shown substantial increases in availability during the last few years

Availability of Services

Availability of HERS raters Not Available Fewer than half of the non-participating (36%) and participating (43%) builders stated that HERS raters were very or somewhat available

Market Share and Sales

Market penetration of New York ENERGY STAR Homes (including single and 2-4 family markets)

0.3% in 2001 3% in 2002 7.8% in 2003

11.1% in 2004 11.1% in 2006


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Table 4-9. Home Performance with ENERGY STAR Program – Key Market Indicators and Program Cumulative Progress


Follow Up (2005, unless noted)

Homeowner familiarity with energy efficiency measures and equipment

Not Available 81% of the participating home owners reported that their familiarity had increased either significantly or somewhat during the last few years More than half of these participants said “all” or “most” of the increase was due to their participation in the HPwES Program

Contractor familiarity with energy efficiency measures and equipment

Not Available 89% of the contractors said their familiarity had increased significantly or somewhat during the last few years 87% said “all” or “most” of this increase was due to their participation in the HPwES Program


Homeowner awareness of BPI

Not Available 38% of participants had heard of the BPI

Homeowner views on the importance of BPI certification

Not Available Among those who had heard of the BPI, 82% considered BPI certification very or somewhat important in their selection of a contractor

Contractors viewing BPI as a selling point

Not Available 36% view BPI as a strong selling point and 30% see it as a moderate selling point

Perceived Value

Homeowner satisfaction with the HPwES program contractors

Not Available 75% of the participating homeowners were very or somewhat satisfied with their contractors

Contractor promotion of HPwES Program

Not Available 89% of the participating contractors indicated that they were very (53%) or somewhat (36%) actively promoting the HPwES Program


Participating contractor views on availability of energy efficiency measures and equipment

58% reported that energy-efficient measures and equipment are very available

82% reported that energy-efficient measures and equipment are very available


Penetration of the HPwES Program in the home remodeling market

0.2-0.3% in 2001 0.7-1.1% in 2002 1.7-2.7% in 2003

1.7-2.7% in 2004 2.1-3.3% in 2005

Home Performance with ENERGY STAR Market Characterization Findings

Market Definition

The MCA Team used both secondary data and estimation techniques to assess the size and specific attributes of the statewide residential existing homes market for energy-efficient equipment and practices.


4-15

According to the latest available US Census data, there are more than 3.4 million single family homes, of one to four units, in the state of New York, representing slightly more than 55% of the state’s total residential home market. The growth rate of the existing home market is driven by the rate of new construction and it is estimated that there are an additional 20,000 to 25,000 new one- to four-unit homes constructed in New York each year.4 The residential market consists of two submarkets: new construction and existing homes.5 Counties in downstate New York, including Westchester, Kings, Queens, Bronx, Richmond and Orange counties have experienced considerable growth beyond that of upstate New York counties from 2000 to 2006.6 This heavily concentrated area of growth in the residential home market presents a potentially untapped opportunity for additional energy efficiencies.

Table 4-10 shows the annual total building stock of single-family (one- to four-unit) homes in New York State for the period 2001 through 2007 and associated market participation in NYSERDA’s HPwES Program. As can be seen in this table, the 2007 program participation rate ranges from 2.2% to 3.6% of eligible homes. Considering cumulative participation of 18,158 completed projects, market penetration is currently calculated at between 9.5% (18,158/191,903) and 15.3% (18,158/118,631) for the eligible market. In conclusion, it is clear that the market remains plentiful for future participants.

Table 4-10. Total Eligible Building Stock and Penetration Rate 2001-2007 HPwES Program

2001 2003 2005 2007

Building Stock 2,730,529a 2,752,088a 2,776,734a 3,489,152d

Eligible Homes (3.4%-5.5% of total building stock)b

92,838 – 150,179 93,571 – 151,364 94,409 – 152,720 118,631 – 191,903

Participating Households Installing Measures (Not Cumulative)c

350 2,459 3,161 4,301e

Percent of Eligible Homes Installing Measures under Home Performance with ENERGY STAR

0.2% – 0.3% 1.6% – 2.7% 2.1% - 3.3% 2.2% – 3.6%

a Source: McGraw-Hill Construction Dodge Building Stock Database. Based on single-family and 2-4 unit multifamily residences. b Based on 2003 MCAC mail survey. c Source: CSG HPwES Quarterly Report, 4th Quarter 2005. d Source: US Census 2006 Database of owner-occupied single/2-4 unit multifamily residences inflated at 0.2% (average growth 2001-2006). e Source: NYSERDA database

Note: For summary purposes, this table includes only odd years. Years 2001-2007 are available in the full Summit Blue report.

4 New York ENERGY STAR® Labeled Homes, Market Characterization, Assessment and Causality Report by Summit Blue Consulting and Quantec, LLC, May 2006, page 34. Original source: The Dodge New, Addition and Alteration Database. 5 According to the latest available US Census data, in 2006 there were slightly more than 3.4 million single family homes, of one to four units, in the state of New York, representing approximately 55% of the state’s residential sector energy usage.. According to the Dodge, New Addition and Alteration Database, in 2005, there were fewer than 2.8 million single-family, one to four unit homes in New York State, representing approximately 50% of the state’s residential sector energy usage at that time (6,000 GWH/year). This discrepancy between the numbers of homes reported between these two sources cannot be rectified. Thus, for the purposed of this evaluation we will refer to data from both the Dodge, New Addition and Alteration Database, and the US Census Data, for this analysis. 6 Analysis of growth trends from US Census database.


4-16

HPwES Accomplishments and Market Penetration

It was reported in 2007 that 866 comprehensive energy assessments (CHAs) were conducted, with 276 CHAs conducted in 2006 and 167 CHAs conducted in 2005.7 However, many participating contractors only report and provide CHA information to the HPwES program administrator when the CHA results in the installation of actual measures in the homes, so the number of total CHAs is likely greater than those reported.

As shown in Table 4-11 below, as of the end of December 2007, 18,158 projects have been completed through this program, including 11,626 market-rate projects and 6,532 assisted projects.8 When calculated against the total number of participants, the percent of assisted customers has steadily decreased each year, from a high of 48% in 2002, to a low of 31% in 2007. During this same period (since 2002), the percent of market-rate customers has increased steadily, from a low of 52% to a high of 69% in 2007. These percentages can be seen more clearly in Figure 4-1.

The breakdown of projects between single family (one unit) and multifamily (two to four units) is presented in Table 4-12 for the years 2006 and 2007. As can be seen from this table, single family home projects dominate (over 90% of total projects), and are up nearly 32% through the end of 2007 compared to 2006. During this time, multifamily projects increased at a slower rate of 25%. Overall program activity increased 31% over this same time period.

Table 4-11. Breakdown of complete HPwES projects – by Program Type

Year Number of Participants Market-Based Assisted

2001 350 349 1

2002 1,091 979 112

2003 2,459 1,322 1,137

2004 2,561 1,334 1,227

2005 3,161 1,952 1,209

2006 4,235 2,727 1,508

2007 4,301 2,963 1,338

Total 18,158 11,626 6,532

7 CHA data report from NYSERDA. 8 All data noted in Market Characterization summary section was derived from the NYSERDA database as of 2/17/2008.


4-17

Figure 4-1. Market and Assisted Jobs Percentage, 2004-2007

62%

52%

69%64%

48%

38%31%36%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2004 2005 2006 2007

MarketAssisted

Table 4-12. Breakdown of completed HPwES projects by Home Type

Home Type 2006a 2007b

Single Family 13,010 17,110

Multifamily (two-four family) 844 995

Total 13,854 18,105c

a CSG 4th quarter Report 2006. b CSG 4th Quarter Report 2007. c This value, 18,105 was compiled using CSG Quarterly Report numbers and is less than the 18,185 value reported in Table 4-11 that was derived through NYSERDA’s program database. This discrepancy is likely due to the fact that program databases are constantly updated with new information, and depending on when data are pulled from the database, updated values for the same metric may result.

The stock of existing residential single and multifamily homes in New York State has been growing at an annual rate of approximately 0.4% over the period from 2000 to 2006, based on an average of 20,000 to 25,000 new homes constructed each year.9 The HPwES program targets a portion of this base of existing single family and multifamily (one- to four-unit) homes – ones that are in the market for home improvements, remodeling projects and additions. It is estimated that 3.4% to 5.5% of New York’s residential homes existing building stock falls within this targeted market.10 Overall, from 2001 to 2007, the growth rate for new additions, home improvements and remodeling projects within New York’s single family and multifamily existing homes base has been 0.5% per year or less.11

9 US Census database, American Survey for the State of New York. 10 Target market range from 2005 HPwES program evaluation report. 11 Data references the McGraw Hill Dodge New Addition and Alteration Data base 2001 – 2007.


4-18

Upstate vs. Downstate12

Through analysis of US Census data for 2006 and NYSERDA’s program database, it was determined that counties in downstate New York (Kings, Queens, Bronx, Richmond, Orange and Westchester) represent 24% of the total eligible market for the HPwES Program, yet to date account for 2% of total program participation (see Figure 4-2). The market penetration of HPwES in New York’s downstate area (excluding Nassau and Suffolk Counties) is 0.44%; although this penetration is below the Program’s average market penetration rate statewide, it is representative of the program’s penetration in an overwhelming majority of the counties located in New York’s upstate regions. The growth rate of the unit population of single family and multifamily homes in downstate counties has been substantially (13%) higher than the 0.4% average statewide growth rate.

Of the remaining counties in downstate New York, Orange County has seen a 16% increase in building stock, and Richmond County has increased 13% from 2000 to 2006. Bronx and Kings Counties have experienced growth rates of 8% and Queens County housing stock has increased by 6%. The average age of housing stock in New York is similar for upstate and downstate regions, with the exception of Westchester County, which has seen an infusion of newer housing stock due to a 75% growth rate in housing from 2000 to 2006. This heavily concentrated area of growth in the downstate residential homes market represents a potential underserved area and opportunity for additional energy efficiency. It is important to note, however, that program participation to date in New York’s Westchester County is 1.5% - the highest participation rate among all of the downstate and most of the upstate counties (with their individual county-level participation rates of less than 1% each).

Figure 4-2. Distribution of Eligible Market

Distribution of Eligible Market

Kings 0.033

Queens 0.098

Bronx 0.027

Richmond 0.022

Orange 0.022

Downstate, 24%

Westchester 0.047

Upstate 0.76

Participating Contractor Characterization

According to CSG Quarterly and year-end program reports, the number of participating contractors increased substantially during the first three years of the Program, with 52 contractors in 2001 and 103 contractors by the end of 2003. As shown in Table 4-13, the number of participating contractors leveled

12 All data and analysis is generated from US Census data and NYSERDA database program information data, unless otherwise stated.


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off, and actually decreased slightly in 2004. This was despite a dramatic increase that year in the number of projects completed.13 In December 2007, there were 144 participating contractors identified in NYSERDA’s HPwES program database. Of these, 119 were deemed actively participating contractors that completed at least one job during the year, as determined in the database. This current number of contractors is below the program goal of 275, and different than the number of participating contractors reported in the CSG December 2007 HPwES program report.14

Table 4-13. Contractor participation by year

2001 2002 2003 2004 2005 2006 2007

Number of Participating Contractors

52 84 103 99 109 127 144

As noted previously, in 2007 there were 119 contractors who completed one or more projects. The actual number of HPwES projects varies greatly by participating contractor. For example, as shown in Figure 4-3, only ten (or 5%) of the participating contractors completed 100 projects or more, while another fourteen (7%) of the contractors completed more than 50 to 99 projects. Fifteen of the 2007 participating contractors completed only one project during the calendar year.

Figure 4-3. Distribution of Projects by Contractors



13 2006 4th Quarter HPwES report, CSG and 2007 4th Quarter HPwES report, CSG. 14 This discrepancy is likely due to the fact that program databases are constantly updated with new information, and depending on when data are pulled from the database, updated values for the same metric may result.


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In 2007, a measurement and verification update was completed for the Home Performance Program. Recommendations resulting from this work are summarized in Section 4.4.5.

Table 4-14. Single Family Home Performance Program Cumulative Annual Energy and Peak Demand Savings (Through December 2007)


Realization Rate

Adjusted Gross

Savings Freeridership Spillover

Net-to-Gross Ratio1

Net Savings


MWh/year 11,534 1.10 12,688 28% 47.6% 1.17 14,845

MW On-Peak

1.7 2.32 3.8 28% 47.6% 1.17 4.5

MMBtu 650,389 0.74 481,288 28% 47.6% 1.17 563,106

Home Performance with ENERGY STAR

MWh/year 15,104 1.00 15,104 26% 41% 1.12 16,916

MW On-Peak

2.0 1.04 2.1 26% 41% 1.12 2.4

MMBtu 755,868a 0.86 650,046 26% 41% 1.12 728,052

Single Family Home Performance Program – Total


MW On-Peak

3.7 N/A 5.9 N/A N/A N/A 6.8

MMBtu 1,406,257 N/A 1,131,334 N/A N/A N/A 1,291,158

1 Net-to-Gross Ratio = 1-Freeridership+Spillover (a weighted average of the NTG ratios estimated in the previous MCAC analysis and this current analysis is shown here). a The fuel savings for a small number (550) of non-SBC projects funded under the National Grid utility rate settlement are included in this figure. All non-SBC savings will be removed for the Quarter 1 2008 report.

Non-Energy Impacts

The MCAC team examined non-energy impacts (NEIs) for ENERGY STAR Labeled Homes in 2005, and NEIs for Home Performance were last studied in 2003. Results from the most recent evaluations are shown in Table 4-15.

Table 4-15. Single Family Home Performance NEI Results


ENERGY STAR New Homes (2005) 51%

Home Performance with ENERGY STAR (2003) 50%


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4.4.5 Follow-Up on Evaluation Recommendations

Home Performance with ENERGY STAR

The June 2007 Home Performance with ENERGY STAR measurement and verification report by Nexant identified four recommendations for program improvement.15 These recommendations, along with responses or actions from program staff, follow below:

• Billing release forms and billing data should be collected for all homes in the program. While the billing analysis produced results with wide variations in energy use and savings, the collection of data on additional external factors will increase the usefulness of this evaluation tool.

• The program should require contractors to obtain baseline billing data and enter annual baseline consumption into HomeCheck and TREAT. Both software modeling packages have the ability to use billing data as an input when calculating energy savings. At least one full year of data would be preferable, but even partial year data would be helpful in calculating and verifying modeled savings.

Customer billing release forms have been collected for every completed project since May 2005; however gaining approval to collect billing data from utilities has not occurred. NYSERDA’s Comprehensive Residential Information System (CRIS) database has been designed to house participant billing and consumption data when the data becomes available. Program and evaluation staff will continue to pursue this data.

• In addition to information obtained during the QA inspection, the program should track the persistence of CFLs at various intervals after project completion.

Quality assurance evaluations for the HPwES Program occur shortly after job completion; given high program volume and current staffing levels, re-entering a home to conduct a follow-up inspection is not feasible. Program and evaluation staff agrees this task would be best tracked by NYSERDA’s evaluation contractors as part of other HPwES evaluation activities. Program staff suggest conducting a similar analysis on other measures, too.

• The program database should maintain the utility account information for all homes in the program. Information for both electric and fossil fuel accounts are unique identifiers for a home. Additionally, for multi-family units, all utility account information should be included so that homes with multiple meters can be easily identified.

A field was added to the CRIS database in 2006 for account numbers and this data (collected starting May 2005) has been added. Staff acknowledges this issue on the multifamily side and is looking into this recommendation.16 NYSERDA’s evaluation staff will continue to monitor progress in collecting utility data for multifamily units.

15 Nexant, M&V Evaluation Home Performance with ENERGY STAR, Prepared for NYSERDA, June 2007. 16 The volume of 2-4 family homes participating in the HPwES Program is very small.


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New York ENERGY STAR Labeled Homes

The June 2007 NYESLH measurement and verification report by Nexant identified four recommendations for program improvement.17 These recommendations, along with responses or actions from program staff, follow:

• Revise the current program reported baseline water heating gas use in the CSG database for each climate zone. The billing analysis provides actual energy use information that can be applied to adjust the baseline Model Energy Code (MEC) ‘93 energy use, see Equations 1 and 2 of the above referenced report. To implement the recommended change, the baseline water heating values in the CSG database must be adjusted by the percent change listed in Table 6 of the report. The water heating baseline use for each climate zone should be multiplied by a factor of 0.34 before reporting.

NYSERDA staff is aware of the savings discrepancies and is working with the designers of the modeling software and the program database to reach a conclusion as how to best address the problem.

• A comparison of standards and energy consumption for homes built to MEC ’93, Energy Conservation Construction Code of NY (ECCCNY), and International Residential Code ’04 should be undertaken. The baseline energy consumption and the reference expanded HERS score for a MEC ’93 and ECCCNY home should be adjusted based on the findings to accurately calculate energy savings for labeled homes.

The NYESH Program uses a nationally recognized and approved software to rate and score homes completed through the Program. This software, REM/RATE, is continually updated to reflect national building code changes. These issues are being addressed by RESNET, the owner of Architectural Energy Corporation. NYESLH program staff have agreed to share findings from RESNET’s investigation of savings discrepancies with NYSERDA’s evaluation team.

• Billing release forms and billing data should be collected for all homes in the program as part of program participation.

NYESLH program staff does not have a direct relationship with the customer making it difficult to obtain billing data. NYESLH program staff continues to attempt to gather this information and NYSERDA evaluation staff will monitor progress on this effort.

• Data from REM/RATE files should be included in CSG’s database for all homes, including detailed equipment and appliance information and square footage of each home. CSG indicated that this recommendation will be incorporated into a future version of the program database. In addition, NYSERDA should periodically conduct quality control checks to verify that the information in the database is correct.

This recommendation has been implemented. Quality control of REM/RATE files occurs when participating homes go through the quality assurance process to highlight any discrepancies. In addition, a detailed review of REM/RATE output files, such as the qualifications, combustion/safety testing and home energy rating certification forms is conducted by NYSERDA and its incentive processing contractor when projects are evaluated for incentive payments.

17 Nexant, M&V Evaluation ENERGY STAR Labeled Homes, Prepared for NYSERDA, June 2007.

34BMultifamily Performance Program

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4.5 Multifamily Performance Program


The Multifamily Performance Program has two tracks: the New Construction component for new construction and complete gut-rehabilitation projects, and the Existing Buildings component.

Before 2007, construction of new multifamily buildings was addressed through what was then the New Construction Program (now the High Performance New Buildings Program). Because multifamily buildings differ from non-residential buildings, and because market penetration for multifamily buildings was lower compared to other building types, NYSERDA now addresses new multifamily building construction in the residential program portfolio. The New Construction component provides technical assistance to mid-stream market participants, addressing renewable technologies, advanced metering technologies, real-time pricing strategies, and combined heat and power systems, especially for electrically-heated buildings with base domestic hot water loads. Training regarding the rationale for energy efficiency measures is also provided for engineers, architects, building owners, building maintenance staff, and tenants.

The Existing Buildings component focuses on enhancing the energy services infrastructure. This involves developing market-based business opportunities for building auditors, financial packagers, designers, architects, and construction inspectors. It consolidates several previous multifamily initiatives in order to provide “one-stop shopping” and allow multifamily building owners and developers to find appropriate NYSERDA services more easily. The previous initiatives now incorporated into the Existing Buildings component include the following:

• The Assisted Multifamily Program (AMP) offered technical assistance and financial packaging to install comprehensive workscopes to improve the energy efficiency of low-income projects. AMP provided needs-based, gap grants for projects to assist in the financing of these workscopes.

• The Residential Technical Assistance (ResTech) Program, which improved the operation of multifamily housing by identifying and encouraging the implementation of cost-effective energy-efficiency measures that also enhance health, safety, and comfort. Activities supported included: feasibility studies, computer-assisted building modeling, energy-efficiency technical training, and commissioning.

• The Residential Comprehensive Energy Management (CEM) Program, which promoted the acquisition and installation of energy management and advanced metering systems. This program helped position residential customers to take advantage of retail competition, while enabling program implementers to access customers’ energy-use data.

• The New York Energy $martSM Loan Fund (Loan Fund) program, which supports the implementation of energy efficiency measures within buildings. The multifamily component of the Loan Fund provided reduced-interest financing for energy-efficiency measures and related facility improvements. Lending institutions and borrowers in the commercial, industrial, institutional, municipal, multifamily, and residential markets (including building owners and tenants) were all targeted by the program. The Loan Fund provided interest reductions on loan amounts up to $5 million for multifamily homes for up to five years.

Both initiatives in the Multifamily Performance Program have low-income components. The low-income component for new buildings provides financial assistance during the design and construction phase to


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help owners complete the construction process, provides training and education to building owners and managers, and monitors energy savings.

The low-income component for existing buildings provides technical and financial assistance to building owners and tenants to make energy efficiency improvements, thus reducing energy bills and providing increased health and safety benefits to building occupants. The low-income component of the Multifamily Performance Initiative incorporates many of the features of a previous program, the Assisted Multifamily Program (AMP). The Multifamily Performance logic model can be found at the end of Section 4.

The 13-year program budget is $204.5 million. The majority of the budget ($160.0 million) is allocated to the low-income program elements.


Table 4-16 shows the Program’s five-year goals and performance over the most recent 18 months. Reasons for slower than expected progress were noted earlier in Section 4.3.1.

Table 4-16. Multifamily Performance Program – Long-Term Goals and Achievements

Activity

Program Goals

(July 1, 2006 through

June 30, 2011)


December 31, 2007

% of Goal Achieved

Number of existing market rate multifamily units receiving energy efficiency services (completed projects) 39,000 0 0%

Number of new market-rate multifamily units receiving energy efficiency services 7,500 0 0%

Tenant energy savings per year (at $250/unit) $34,875,000 0 0%

Number of existing low-income multifamily units receiving energy efficiency services (completed projects) 148,200 10,003 7%

Number of new low-income multifamily units receiving energy efficiency services 12,700 0 0%

Low-income tenant energy savings per year (at $195/unit) $31,375,500 $1,950,585 6%


This section highlights key program outputs. Program highlights include the following:

• Since program inception, 169 existing multifamily properties comprising 47,747 individual units have received efficiency services.

• A total of 72 new construction multifamily projects compromising 5,080 individual units have applied to receive efficiency services.


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Table 4-17 presents cumulative annual net energy and demand savings for the program from inception through December 31, 2007. Realization rates are developed to account for differences in program reported savings and performance of actual installations. Attribution analysis determines, through various methods, whether the gross savings estimate should be further adjusted downward or upward for freeridership or spillover. Adjustments for realization rate, freeridership and spillover, and the ultimate program net-to-gross ratio are also shown in the table. The Assisted Multifamily Program database received an in-depth review by the Impact Assessment team for discrepancies in project entries, for example high $ / kWh, missing savings, etc. Those findings have been shared with program staff and will be integrated into the database.

Table 4-17. Multifamily Performance Program Cumulative Annual Energy and Peak Demand Savings (Through December 2007)


Realization Rate

Adjusted Gross

Savings

Free-ridership Spillover

Net-to-Gross Ratio1

Net Savings

Assisted Multifamily Program (AMP)

MWh/year 23,891 0.97 23,174 27% 15% 0.84 19,455

MW On-Peak

23.1 1.26 29.1 27% 15% 0.84 24.4

MMBtu 218,781 1.0 218,781 27% 15% 0.84 183,667

Comprehensive Energy Management (CEM) Program2

MWh/year 5,712 0.97 5,541 2% 18% 1.16 6,408

MW On-Peak

0.3 1.77 0.5 2% 18% 1.16 0.6

Low Income Direct Installation2

MWh/year 11,494 1.0 11,494 0% 0% 1.0 11,494

MW On-Peak

1.6 1.0 1.6 0% 0% 1.0 1.6

Multifamily Performance Program – Total


MW On-Peak

25.0 N/A 31.3 N/A N/A N/A 26.7

MMBtu 218,781 N/A 218,781 N/A N/A N/A 183,667 1 Net-to-Gross Ratio = (1-Freeridership) * (1+Spillover). 2 Closed program.

Non-Energy Impacts

The MCAC team has examined non-energy impacts for both elements of the combined Multifamily Building Performance Program. The Assisted Multifamily Program was studied in 2003, while the Comprehensive Energy Management Program was the focus of an evaluation in 2004. Results are shown in Table 4-18.


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Table 4-18. Multifamily Performance NEI Results


Assisted Multifamily Program (2003) 54%

Comprehensive Energy Management Program (2004) 22-55%

4.5.5 Multifamily Performance Program Process Evaluation

Initial Process Evaluation (Program Design Issues)

This evaluation provided the results of a preliminary assessment of the New York Energy $martSM Multifamily Performance Program (MPP). The MPP is a new comprehensive program that combines all NYSERDA efforts that address multifamily buildings. This evaluation conducted in-depth interviews with three staff, two contractors, and eight building owners, and fielded surveys to 34 participants and 33 partial participants from early multifamily programs.

The evaluation team found that the MPP is well-positioned to begin. The program design is both streamlined and more market-based than in the past. The most important modification is the shift of responsibility from NYSERDA to the building owners for hiring and managing the building performance specialists (BPS) who supply technical assistance. The incentive structure provides funding for technical support and subsidizing of capital expenditures, while also including a performance reward for buildings achieving exceptional savings levels. An important innovation to the program is the addition of a tiered approach that sets the incentive award levels differently, depending upon the current efficiency of the buildings. The evaluation recommends that the implementation team track progress in order to be able to modify marketing and incentive levels so that program demand and the implementation capacity grow in concert.

This process evaluation was completed in June 200718 and was previously summarized in the NYSERDA, New York Energy $martSM Program Quarterly Evaluation and Status Report, Quarter Ending March 31, 2007, May 2007.

Process Evaluation

This evaluation, developed by the process evaluation team, provides early feedback on the MPP during its first year of implementation. For this process evaluation, two staff members and four implementation contractors were interviewed. In-depth interviews were conducted with 15 Energy Partners and 22 participant building owners and managers connected to the MPP.

The MPP is newly reformulated and is attempting to create an industry of building energy performance professionals, the Partners, who can shepherd building owners and developers through the entire process of assessing the appropriate mix of energy-efficient measures, helping them to secure financing, specifying the equipment, and overseeing the project implementation. The MPP changes the way that NYSERDA interacts with the Partners and building owners by requiring that the building owner finds and hires the Partner, and that the building owner and Partner establish their own contractual arrangement. All payments are made to the building owner, who then pays the Partner. Incentive levels are higher than

18 Research Into Action, Inc., Process Evaluation of the New York Energy $martSM Multifamily Performance Program, Final Report, Prepare for NYSERDA, June 2007.


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they were in early programs; they are released in four payments to assist in cash flow, encourage the faster completion of projects, and to reward buildings that achieve more than the required minimum savings of 20% of total building energy consumed.

The record in the first eight months of the program is impressive. The MPP is attracting the interest of owners of both new and existing multifamily buildings across the state. As of February 3, 2008, the MPP has received 255 applications, covering 53,594 units. The MPP is also successfully bringing in new trade ally firms to serve as Partners. They have already expanded the pool of available firms from the five available in the previous program to 45 certified firms. The Partners interviewed were all quite satisfied with the professionalism, level of organization, and responsiveness of the program implementer –TRC Energy Services (TRC) – to their inquiries, and TRC’s and NYSERDA’s attention to issues. There was a nearly universal feeling among Partners who had participated in earlier NYSERDA multifamily efforts, or in programs in other parts of the country, that the MPP in theory and practice is far superior to the other programs.

An important contributor to the program’s early success has been the attention given to communication among NYSERDA, TRC, and the Partners. The Comprehensive Residential Information System (CRIS) is an effective tool for both tracking program progress and informing all parties of progress made through the program process, called “the pipeline.” The Partner Portal allows each Partner to see all of the same information about each of their projects on CRIS. The monthly telephone conference calls, new Partner orientations, statewide meetings, and posting of questions and responses on the Website all serve to keep Partners informed and to provide valuable program feedback.

This attention to communication has allowed the MPP to inform Partners about the program and enhancements that have been introduced. Many of these program enhancements have been the direct result of Partner feedback as part of the communication process. Most of the issues identified in the interviews with Partners by this evaluation were simultaneously revealed to NYSERDA and TRC through these communication outlets. As a result, most of these issues have already been or are in the process of being resolved.

One such example involves a recommendation to develop an alternative approach for getting new Partners into the pool. The interviews with building owners and Partners suggested that the Partners are at or close to their capacity to provide MPP services, and that there were some rural areas with poor program coverage. The MPP recognized these same concerns and a need to service small apartment complexes that are too small for most of the large engineering firm Partners. The MPP is now encouraging home performance professionals to migrate to small multifamily projects. For those home performance contractors without sufficient multifamily experience, the MPP will provide mentoring to help them learn the process.

The evaluation considered two additional recommendations: establish a practice that limits the effect of program changes on existing projects, and allow alternative modeling software to be used. However, the MPP has already taken action on these issues, grandfathering projects from program changes and allowing the Partners to use any established analytic approach the Partner chooses.

Conclusions and Recommendations

The findings lead to the following conclusions and recommendations.

1. Conclusion: The development of an energy Partner industry will necessarily require enlargement of the existing collection of firms now serving the multifamily sector. Expanding the pool of Partners to 45 firms represents an important accomplishment of the program to date. However, as


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the program continues to attract new multifamily projects, the availability of trained professionals poses the biggest challenge to the long-term success of the MPP. NYSERDA recognizes the need to expand the field and has, independent of the MPP, initiated a training program through the state community college network. Expanding the number of engineers and technicians with building performance capabilities will have lasting benefit to the state.

On a shorter development timeframe, many of the existing Partners described problems in dealing with some of the program aspects. In most cases, the firms expressing problems with the modeling software and the program filing requirements were those least experienced in working with NYSERDA. TRC currently spends a large amount of time supporting the learning curve of these firms, through the more costly one-on-one technical support that is needed to bring the new Partner’s first submissions into compliance.

Recommendation: The MPP should consider additional training activities especially geared towards the specific requirements of the program. The current training for the modeling software is conducted by the software firm and is designed as a general introduction to the software. Sessions that are specifically targeted to the needs of the program would be more helpful and would reduce the need for iterative refilling of program Energy Reduction Plans (ERP) and other filing requirements. To be successful, these training sessions should be focused on hands-on sessions using actual case studies that show attendees exactly how to perform a particular program requirement.

2. Conclusion: The MPP has concentrated on developing communication links between the program administrators and the Partners, and this linkage seems to be working well according to all parties. The only communication-related issues that were voiced in the interviews were made by building owners and managers. For most interviewed building owners, the Partners were doing a good job of keeping the building owners informed. In a few cases, the building owners were less educated about matters than they thought they should be. What most building owners seem to need is a more specific idea of how the program works before they select a Partner and where their project is in the pipeline once they have applied. The MPP has already recognized that a clearer description of the payment process is needed and has already eliminated one area where the described process and the actual process differed.

Recommendation: The MPP should consider strengthening its communication to building owners. In general, the philosophy of depending on the Partner to educate and inform the building owner is working, but there are times when a building owner needs independent information or wants to seek answers that a Partner is not supplying. The MPP should consider developing a Building Owner Portal that would give building owners access to information about their projects and archive questions and answers, as is done for Partner questions.

3. Conclusion: Getting buildings to invest in tenant spaces remains an issue. MPP planners are hoping that the 20% threshold will compel building owners to place emphasis on tenant spaces that they may not have been inclined to do. This does not always occur, especially when a building replaces its heating system.

Recommendation: To further encourage tenant space investment, the MPP should consider raising the incentive level for tenant space investment. In addition, there could be a sliding scale supplemental benefit based on the percentage of units actually treated. NYSERDA could help encourage greater investment in tenant spaces in public housing, where owners making these types of major capital improvements can often get permission to raise the rent.

35BMarket Support Program

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4. Conclusion: Calls coming in to TRC from building owners, managers, and parties other than the Partners are not currently logged. Having a record of these inquiries could be valuable in protecting the program’s interests and in generating future marketing leads.

Recommendation: TRC should log the name and contact information of all inquiries received by phone or email from non-Partner entities.


In its June 2007 report, Research into Action (RIA) noted that the Multifamily Performance staff should monitor the financial support issue19. Participants in the Pilot see current support as too low and participants in the Assisted Multifamily Program (AMP) struggled with financing, and cited difficulties in acquisition of financing as the principal reason why firms withdrew from the AMP. Early pipeline numbers shows that people are interested in participating, so this concern may be unfounded.

In the same report, RIA recommended that the program distinguish between investments that serve common areas and lower the owner’s energy costs, and measures in tenant spaces that lower tenants’ energy bills. Greater financial support is needed, and justified, to accomplish the latter, but if all financial incentives are lumped together, building owners are unlikely to maximize investment in tenant spaces. RIA recommended that program staff consider offering higher incentives for investments made to tenant spaces. This issue will be researched in a Process evaluation scheduled for completion in 2008.

4.6 Market Support Program


The New York Energy $martSM Market Support Program provides support services to the building performance and low-income programs by increasing the availability of energy-efficient products, and by providing residential program outreach and marketing services to recruit midstream participants and build consumer demand. The three initiatives involved in this program are the New York Energy $martSM Products Initiative, the Program Marketing Initiative, and the GetEnergySmart.org Website.

The New York Energy $martSM Products Initiative, established in 1999, seeks to increase sales of residential energy-efficient appliances, lighting and home electronics products. This initiative works on both the supply and demand sides of the market. Its goals are: 1) to increase the supply of products through partnerships with retailers, manufacturers and distributors, and 2) to create demand for high-efficiency and ENERGY STAR products through consumer awareness and understanding of the ENERGY STAR label.

The Program Marketing initiative provides marketing assistance to mid-stream partners, develops and distributes brochures and advertising aimed at consumers, and places advertising. This initiative also performs market research and leverages regional and national initiatives that meet program needs. Program Marketing provides support for the following New York Energy $martSM residential efforts: Single Family Home Performance Program, Multifamily Building Performance Program, summer and winter energy-saving tips campaigns, and leveraged campaigns such as the “Change a Light, Change the World” campaign.

19 Ibid.


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The GetEnergySmart.org Website was initially developed to provide consumers with an on-line tool to assess the energy efficiency of their homes, as well as to provide recommendations on how to improve this efficiency. As the Website evolved, it also came to provide consumers with program and partner information and energy efficiency tips, and to provide potential program partners with participation information. On-line marketing campaigns and e-mail newsletters were increasingly used to bring consumers to the Website. The Website has become an essential communication, marketing and education tool for residential programs.




Table 4-19. Market Support Program – Near-Term Goals and Achievements

Activity



Achieved July 1, 2006 through September 30,


New manufacturing partners signed up 20 13 65%

New retail partners (independent) signed up 100 213 213%

New retail partners (big box, mass merchandisers) signed up 6 4 67%

ENERGY STAR market share increase on targeted products (on average, across products)

25% 9% 36%


This section highlights key program outputs and market progress. Table 4-20 presents the key outputs for the Market Support Program through December 31, 2007. Table 4-21 presents a sample of key logic model-driven indicators of program success, especially those related to market progress, as tracked by the evaluation and program activities. Data on product availability and market share and sales through 2007 will be available in early spring 2008. Table 4-20. Market Support Program – Key Program Outputs


Number of retailer participants 628 (store fronts)

Number of manufacturer partners 28

Dollars spent on cooperative advertising, market share incentives and special promotions

$16.6 million


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Table 4-21. Market Support Program – Key Market Indicators and Program Cumulative Progress

Topic Indicator Initial Value (Date)

Follow Up (2006, unless noted)

NY consumer awareness of the ENERGY STAR label

34% (aided awareness from NYSERDA mail survey, 1999)

77% (unaided awareness from NYSERDA telephone survey,

2005) Awareness and Knowledge

Consumer understanding of the ENERGY STAR label

35% (1999) 47% (2003)

87% (2005)

Percent of models on display at partner retailers that are ENERGY STAR qualified See Figure 4-4 for interim data points on appliances.

Refrigerators – 14% (1999) Clothes Washers – 16% (1999)

Dishwashers – 18% (1999) RACs – 26% (1999)

CFL Bulbs1 – 16% (1999) All Fixtures – 0-4% (1999)

Refrigerators – 40% Clothes Washers – 48%

Dishwashers – 89% RACs – 54%

CFL Bulbs1 – 24% All Fixtures – 0-33%

Product Availability

Percent of models on display at non-partner retailers that are ENERGY STAR compliant

Not available CFL Bulbs1 – 14%

CFL Fixtures – 5-39%

ENERGY STAR refrigerator market share

28% NY Partners (2001) 16% National Partners in NY2 (2001)

47% NY Partners 52% National Partners in NY2

ENERGY STAR dishwasher market share



ENERGY STAR clothes washer market share



Market Share & Sales

ENERGY STAR RAC market share



Incremental Cost

Simple average incremental cost of ENERGY STAR products - % more than non-ENERGY STAR

Refrigerators – $465 - 62% (2004) Clothes Washers – $410 - 89% (2004)

Dishwashers – $174 - 47% (2004) RACs – $44 - 18% (2004)

Refrigerators – $473 – 45% Clothes Washers – $384 - 89%

Dishwashers – $178 - 43% RACs – $56 - 20%

1 Compared to all competing bulbs. 2 Participating National EPA ENERGY STAR Partner Sales Data, Collected by D&R International.


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Figure 4-4. Percent of Appliance Models on Display at Partner Stores that are ENERGY STAR Compliant

The percentage of ENERGY STAR-labeled RACs on display declined in 2000, as shown in Figure 4-4, due to a change in federal minimum efficiency standards. While this percentage increased after that time, it has been declining since 2003 due to the conclusion of the Keep Cool RAC Bounty Program. Although display of ENERGY STAR RACs has declined, market share of ENERGY STAR RACs remains high among New York retailers (at 76%) relative to other appliances.



For the ENERGY STAR Products and Marketing program element, unit sales attributable to the program were determined based on market research, industry data, and deemed savings values. This procedure is described in more detail in Section 4.6.5.

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1999 2000 2001 2002 2003 2004 2005 2006

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STA

R c

ompl

iant

RefrigeratorsClothes WashersDishwashersRACs


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Table 4-22. Market Support Program Cumulative Annual Energy and Peak Demand Savings (Through December 2007 unless noted)


Realiza-tion Rate

Adjusted Gross

Savings

Free-ridership Spillover

Net-to-Gross Ratio1

Net Savings

New York Energy $martSM Products and Marketing (2006) 2

MWh/year n/a n/a n/a n/a n/a n/a 604,843

MW On-Peak n/a n/a n/a n/a n/a n/a 107.4

MMBtu n/a n/a n/a n/a n/a n/a 404,155

Keep Cool

MWh/year 5,159 1.0 5,159 18% 15% 0.94 4,865

MW On-Peak 8.8 1.0 8.8 18% 15% 0.94 8.3

Bulk Purchase

MWh/year 19,451 2.03 39,486 10% 5% 0.95 37,314

MW On-Peak 3.9 1.62 6.4 10% 5% 0.95 6.0

MMBtu 24,307 0.71 17,258 10% 5% 0.95 16,309

Market Support Program – Total

MWh/year n/a n/a n/a n/a n/a n/a 647,022

MW On-Peak n/a n/a n/a n/a n/a n/a 121.6

MMBtu n/a n/a n/a n/a n/a n/a 420,464 1 Net-to-Gross Ratio = (1-Freeridership) * (1+Spillover). 2 Savings for the New York Energy $martSM Products Program are estimated based on market data, survey research, and deemed savings values. The last update, completed and applied in Quarter 1 2007, added electricity, demand, and fuel savings for both 2005 and 2006. The cumulative annual savings do not yet reflect additions for 2007 from the New York Energy $martSM Products Program. Additions for 2007 will be applied, to the extent possible, in the Quarter 1 2008 report.

Non-Energy Impacts

The MCAC team has examined non-energy impacts for CFLs and clothes washers. Results from the most recent direct query analysis on both of these measures are shown in Table 4-23.

Table 4-23. Market Support Program NEI Results


Clothes Washers (2004) 27%

CFLs (2005) 60%


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4.6.5 New York Energy $martSM Products: Market Share Update and Lighting Evaluation Summary

Market Share Update

During 2006-2007, the MCAC team provided an update on ENERGY STAR appliance and lighting market share and estimated savings.20 Select findings from the evaluation include:

• An estimated 1.5 CFLs per household were purchased in the New York Energy $martSM area in 2005, higher than the national average of 0.8 CFLs per household, and substantially higher than the average of 0.4 CFLs per household in non-program areas.

• Over 18 million ENERGY STAR CFLs were sold in the New York Energy $martSM area in 2005-2006, approximately 7.5 million of which were attributable to the New York Energy $martSM

Products Program after accounting for expected baseline sales. The bulbs attributable to the Program during these two years result in expected annual savings of close to 358 GWh and over 31 MW.

• In addition to CFL sales, a total of 78,715 lighting fixtures and ceiling fans with lights were sold by participating retailers in 2005-2006, resulting in expected annual savings of close to 9 GWh and over 0.5 MW.

• For 2006, approximately 498,000 appliance units were credited to the Program, leading to annual savings of 30.3 GWh.

• The cumulative annual program savings shown in Table 4-22 reflect these most recent additions to the program accomplishments.

Lighting Market Evaluation

As part of this evaluation, the MCAC team conducted an in-depth evaluation on the lighting component of the Program in order to address the Program’s increased implementation efforts in the lighting arena, as well as some of the gaps in previous lighting market evaluation efforts.21 Select findings from this evaluation include:

• In 2006, approximately 86.2 million light bulbs and 8.8 million lighting fixtures were sold to the residential market in the New York Energy $martSM Program area.

• The majority of bulbs are sold through home improvement stores (36%), department stores (32%), and grocery stores (24%). The majority of fixtures are sold through home improvement stores (61%) and department stores (20%).

• The current program requirement that retail partners must sell multiple ENERGY STAR products, plus the sales data requirement, has limited retailer participation: NYSERDA retail partners represent only 2% of all bulb sales and 4% of all fixture sales.

20 This study was also summarized in the June 2007 Quarterly Evaluation and Status Report. For the full report, please see Summit Blue Consulting, New York Energy $martSM Products Program Market Characterization, Assessment and Causality Evaluation, Prepared for NYSERDA, June 2007. 21 Indicators covering a broad range of ENERGY STAR products were also examined. These include ENERGY STAR awareness and perceptions, pricing and incremental cost, and market share analysis.

36BCommunities and Education Program

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• The primary market barriers to the sale of ENERGY STAR compact fluorescent light (CFL) bulbs and fixtures include high first cost, lack of awareness, and insufficient style options.

• In 2006, the market share for ENERGY STAR CFLs was approximately 11%, while the average market share for all types of ENERGY STAR permanent (hard-wired) fixtures was approximately 6%.

• Awareness among non-participating retailers of ENERGY STAR lighting and the New York Energy $martSM Products Program was low: only 42% of non-participating retailers reported being familiar with the ENERGY STAR Logo for compact fluorescent light bulbs, and only 12% were aware of the Program. Few retailers (18% of participants and 6% of non-participants) understood the difference between ENERGY STAR and non-ENERGY STAR CFLs.

• Both participant and non-participant retailers who were familiar with ENERGY STAR CFLs or fixtures perceived that fewer than half of their customers were aware of energy efficient lighting products. Despite the low awareness, the retailers – particularly the participants –reported that customer demand and sales of ENERGY STAR lighting products were increasing.

• All (100%) of the retailers that were aware of ENERGY STAR lighting products, including both participants and non-participants, indicated that ENERGY STAR CFLs and/or permanent lighting fixtures are just as readily available as the non-ENERGY STAR versions.

• In site visits to 20 non-participating lighting retailers, 17% of the total display area was devoted to some combination of ENERGY STAR and non-ENERGY STAR qualified CFLs. The majority of this CFL display area--84%--was used specifically for ENERGY STAR CFL displays. Some stores had over 25 models of CFLs.

• Only four of the 11 non-participating fixture retailers that were visited carried ENERGY STAR fixtures. The percent of ENERGY STAR fixtures on display at these stores ranged from 5% to 39%.

4.7 Communities and Education Program

4.7.1 Program Description The Communities and Education Programs provide face-to-face contact with New York residents on energy efficiency topics and NYSERDA programs through schools, local seminars and workshops, and events. The ultimate goal of the program is to help develop an energy-conscious society in New York with the desire and capability to create more efficient and sustainable communities. More immediate goals of the programs include: 1) educating teachers, students, homeowners, renters, representatives of community-based organizations, and community leaders on various energy topics, including energy efficiency and the relationship between energy, sustainability, and economic development in their communities; and 2) making them aware of New York Energy $martSM

programs that can be combined with local, State, and federal resources to reduce energy consumption in their communities. The two initiatives making up these programs are Energy Smart Students (ESS) and New York Energy $martSM

Communities (E$C). Beginning in 2004, ESS introduced energy and energy efficiency curricula to New York’s K-12 teachers and students. ESS offers hands-on, project-based lessons, which are aligned with the New York State Learning Standards for math, technology, language arts, science, and social studies. ESS has also


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introduced building sciences to vocational schools, laying the groundwork for the growth of the building performance specialists industry. EES offers one-day workshops for classroom teachers and other educators on energy literacy, science of energy, energy efficiency at home and at school, and more specialized topics, such as bio-diesel and hydrogen. Teachers attending the workshops are provided with a curriculum for grade levels K-12. The curriculum offers teachers the ability to select modules of varying lengths based on the needs of the students. ESS also sponsors an annual Energy Educator Conference to provide more intensive training to teachers willing to commit to assisting ESS with the training of other teachers. ESS offers teachers mini-grants to fund innovative energy projects in the classroom and community. The program also produces Energy Smarts, a bi-monthly newsletter devoted to energy education. In addition, the program participates in statewide teacher conferences and organizations, including the New York State Technology Educators Association and the Science Teachers Association of New York State. In 2001, E$C was developed as a partnership with the U.S. Department of Energy’s Rebuild America Program. This initiative provides a regional E$C Coordinator (E$CC). The Coordinator educates consumers and community leaders on the benefits of energy efficiency and renewable resources, and their ability to impact their own energy costs, using the community infrastructure to increase message reach and impact. The E$CC also provides ready access to New York Energy $martSM programs by referring building owners and managers to appropriate program entry points. The initiative includes nine partnerships throughout New York: Western New York, Finger Lakes Region, Central New York, Southern Tier, North Country, Capital Region, Mid-Hudson, and two partnerships in New York City. Throughout the year, the regional partnerships sponsor seminars and workshops, meet with community leaders, and staff the NYSERDA booth at local events, for the following purposes: to educate the public on saving energy at home and in the workplace; to provide public forums for the discussion of energy issues important to their community; and to work with planners in their communities to ensure that energy is addressed in local ordinances and growth plans. In addition, NYE$C has primary responsibility for recruiting builders, contractors, retailers, realtors, code officials, architects, engineers, and others into the residential programs as mid-stream partners, thus eliminating the need for multiple program implementation contractors to recruit partners within the same regions, and reducing confusion and redundancy in the marketplace.



Seven of the initial E$C regions were solicited through RFPs after a five year contract period concluded. All of the contractors chosen were new, but four of the regional coordinators were retained by the new contractors. The current contractors are expected to focus more on promoting residential programs including seasonal campaigns as well as contractor recruitment. The New York City regions will be expanded by one in 2008 as the New York City contracts conclude in spring of 2008. The following highlights a major activity (regional project) within each region, promoted by the E$C Coordinator. It is only a snapshot of the type of events and regional planning that occur regularly via the Energy $mart Communities program.

North Country - The (Adirondack Park) Energy Smart Parks Initiative, which is a result of a collaborative effort of more than twenty non-profits and municipalities in and around the Adirondack Park, is preparing a proposal to DEC for consideration of a Smart Growth grant to fund development of a park wide Energy Master Plan. This plan will consider all market sectors that rely on the healthy economy of the Park and will focus on the energy needs and efficiency of the residents and businesses in the area.


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NYC- Bronx: Coordinator worked with the Turner School of Construction Management to help attract minority and women contractors to an eight week, 16 session training course on different aspects of the construction industry to help contractors improve their businesses. For the first time, the Coordinator helped incorporate energy efficiency in two classes leading to contractors signing up for the Home Performance with ENERGY STAR® Building Analyst training course.

NYC- Pratt: Met with representatives from the Clinton Foundation. The meeting was significant as there is great potential for leveraging future efficiency measures from the Clinton Foundation alongside NYSERDA programs.

Mid-Hudson: Participated in the Pace University Environmental Career. The Coordinator’s participation helped raise awareness of BPI training programs as a viable career development tract. It is important to reach educated, motivated individuals entering the workforce as agents of change as well as for future workforce development.

Southern Tier: The E$C program was the recipient of a $10,000 grant from Municipal Electric and Gas Alliance in October 2007 to fund municipal energy projects. Coordinators offered ten- $1,000 grants to communities for Holiday Lighting upgrades to promote the use of LED lighting.

Central NY: The Syracuse City School District (SCSD) has embraced NYSERDA’s Excellence in Energy Innovation after the Coordinator introduced the Director of Science and Technology to the Energy Smart Schools program. The SCSD is working with the NYSERDA project manager regarding the implementation process. The SCSD has 35 schools and 19,864 students.

Western Region: Teaming up with the NYSERDA Products contractor, the Coordinator was able to get a NYSERDA products partner to donate thousands of dollars for a display of energy efficient products that will not only help to promote an economically depressed area but can serve as a model for neighboring communities. A post energy use evaluation is planned.

Finger Lakes and Capital Saratoga Regions: Coordinators in both regions have been scheduling multiple outreach and recruitment events in their regions. Schenectady has been an active partner in efficiency programs and hosted a 2007 Conference on the Environment in which all of the Coordinators participated. In addition, the new Finger Lakes Coordinator has focused outreach and training on residential programs in Rochester and surrounding counties.



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Table 4-24. Communities and Education Program – Long-Term Goals and Achievements

Activity

Program Goals(July 1, 2006



2007

% of Goal Achieved

Teachers trained 5,000 1,000 20%

Total students reached Portion of total estimated to be low-income students

150,000 100,000

76,475 30,590

51% 31%

Community events held statewide 1,000 92 9%

Recruiting seminars held statewide 500 12 2%

Home performance contractors, technicians, builders and raters recruited for the Single Family Home Performance Program

800 201 25%

Building analysts, designers, energy consultants, equipment installers, etc. recruited for Multifamily Building Performance Program

100 14 14%


This section highlights key program outputs as identified through the logic model development work and associated market progress. All values reported are cumulative since program inception. Program highlights include the following:

• Since its inception, there have been 2,393 teachers trained at 128 workshops on teaching about energy issues. All 128 workshops received free use of space and promotional assistance from the host organization. In addition, 24 workshops received funding from utility and government.

• An estimated 234,601 students have been reached.

• More than 800 meeting and outreach sessions have been held, attracting more than 97,000 attendees.

Table 4-25 presents the key logic model-driven outputs for the Communities and Education Program through December 31, 2007.


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Table 4-25. Communities and Education Program – Key Program Outputs


Energy Smart Students Initiative

Number of teacher conferences held to promote ESS 33

Number of workshops 128

Number of teachers (including administrators) trained on energy education topics 2,393

Number of student-centered events attended 24

Number of energy education projects awarded through mini grants) 39

4.7.4 Energy Smart Communities Process Evaluation

This evaluation, developed by the process evaluation team (Research Into Action), consists of a multi-phased approach that will provide early and continued feedback on the New York Energy $martSM

Communities program (Energy $mart Communities). This synopsis provides a brief summary of the process evaluation objectives and methodology.

Energy $mart Communities is a program originally brought to NYSERDA under the U.S. Department of Energy’s Rebuild America program. Energy $mart Communities’ goal is to bring together organizations and agencies in communities to develop model projects demonstrating how energy efficiency and renewable energy create economic, social, and environmental benefits. All of these efforts are guided by the Energy $mart Communities Coordinators (Coordinators) in each of nine designated regions: Capital/Saratoga; Central New York; Finger Lakes; Mid-Hudson; North Country; Southern Tier; Western New York; and two in New York City.

In 2006, a new contract was signed to provide services and support to the program. NYSERDA envisioned that this would reduce the work load of the project managers and enhance the support available to the regional Coordinators. Changes in the program management structure at NYSERDA also occurred in late 2007, consolidating responsibility for the Coordinators under one manager rather than two. These changes frame the research issues for this evaluation, which is designed to assess the effects of these transitions on the Coordinators in 2007 – early in the transition period – and at two points in 2008, following execution of several program campaigns under the new structure.

The first phase of the three-phase process evaluation was completed in January 2008. The focus of the first phase was to assess the impact of changes in program structure, management, support, and implementation. In-depth telephone interviews were conducted with 12 individuals in December 2007; these included two NYSERDA project managers and seven of the regional Coordinators, representing six regions (three of the regions either had Coordinators too new to the position to comment on the program transitions or the position was vacant). Interviews were also conducted with four staff of the services and support contractor, including one project manager, two senior program support representatives, and one program support representative.

Preliminary results were reviewed with two NYSERDA program staff and one member of NYSERDA’s evaluation team. These results are intended to provide NYSERDA staff with information that might alert


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them to any issues needing immediate attention and to provide a baseline from which to compare evaluation results at two later points, when staff, Coordinators, and the contractor have had the opportunity to further develop program activities under the new support and management structure.

A second round of interviews with the Coordinators will occur in spring 2008, and a third round of interviews, including program staff, services and support contractor staff, and Coordinators will be conducted in fall 2008. A final report documenting each phase of the process evaluation will be submitted in December 2008.

4.8 EmPower New YorkSM


The EmPower New YorkSM Program is part of NYSERDA’s portfolio of New York Energy $martSM programs that serve low-income households in the State. Customers of SBC-participating utilities with incomes below 60% of State Median Income and households enrolled in utility low-income payment assistance programs are eligible for services. Both property owners and tenants may be served, and the program targets one- to four-family homes and multifamily buildings with fewer than 100 units. Priority is given to:

• Households participating in utility low-income programs

• Seniors referred by Offices for the Aging due to financial hardship

• Eligible households receiving services that are coordinated or co-funded by the Weatherization Assistance Program (WAP, run by the New York Division of Housing and Community Renewal, and funded by the U.S. Department of Energy), so as to create comprehensive work scopes that include appropriate electric reduction measures

• Eligible households in buildings not eligible for services through WAP

• Smaller buildings eligible for the Multifamily Building Performance Program that NYSERDA determines are better served through EmPower NewYorkSM

EmPower New YorkSM prioritizes cost-effective electric efficiency measures, particularly lighting and refrigerator replacements. Home performance services, such as insulation, heating system repair and replacement, and air-sealing, are provided in situations where they offer the best means of improving energy affordability. Health and safety measures, such as carbon monoxide (CO) detectors and emergency repairs, are also implemented as the need arises. Whenever possible, services are coordinated and cost-shared with WAP.

All customers who are referred to the program and are not targeted for in-house energy services receive a package of information with educational materials, three CFL light bulbs, a water temperature thermometer, and a nightlight. These households are called “partial participants.” Households expected to benefit from more comprehensive treatments receive energy audits and in-home energy education, and additional electric reduction measures (e.g., CFLs and ENERGY STAR-compliant refrigerators) or home performance measures as appropriate. These households are “full participants.” There is no cost to the customer for these services and equipment. In rental situations, measures that directly benefit the eligible tenant may be installed without a landlord contribution. Additional measures generally require a 25% landlord contribution. The program also provides free workshops on energy use and financial

37BEmPower New YorkSM

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management offered to the general public by the Cornell Cooperative Extension and HeartShare of New York City. Program audit and installation services are provided through a network of weatherization agencies and private energy services contractors, all of whom are accredited by the Building Performance Institute (BPI).

Effective July 2006, the Weatherization Network Initiative was merged with EmPower New York. The Weatherization Network Initiative was launched in 2003 to deliver electric reduction measures through the statewide network of weatherization agencies in coordination with the Weatherization Assistance Program. A total of 4,581 households received services through the Weatherization Network Initiative. The total cost was $5,438,40822 with an average cost of $1,187 and average annual savings of $189 per household. As services are tailored to the needs of the household, actual costs and savings can vary. EmPower expanded the involvement of these weatherization agencies while adding private contractors to ensure cost-effective and timely services.

The combined Weatherization Network Initiative and EmPower New York budget through June 2011 is $58.3 million. In addition, the comprehensive nature of the program has allowed NYSERDA to leverage considerable non-SBC funds totaling $11.6 million to install efficiency measures for an additional 4,107 households. Table 4-26 displays details of the budget and goals of the non-SBC funding sources.

Table 4-26. Non-SBC Funds Leveraged Source Budget Unit Goal Expended Completions

Indian Point 2 Joint Proposal $2,200,000 2,200 $2,200,000 2,232

Western New York Environmental Projects $895,000 1,000 $535,000 667

National Grid Low Income Gas Customer Efficiency Program

Phase 1 $2,325,000 1,007 $2,325,000 1,007

Phase 2 $2,300,000 965 $284,071 135

AES Environmental Mitigation Project $255,000 255 $70,880 65

Con Edison Low Income Gas Customer Program

$1,000,000 370 $244 1

National Fuel Gas Conservation Incentive Program

$2,675,400 718 -- 0

Total $11,650,400 6,515 5,415,195 4,107

22 The total cost includes all implementation dollars spent.


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Table 4-27 shows the Program’s five-year goal and performance over the most recent 18 months.

Table 4-27. EmPower New YorkSM Program – Near-Term Goals and Achievements

Activity

Program Goal (July 1, 2006




Households served (completed) 31,500 12,495 40%



• The EmPower New YorkSM Program including the Weatherization Network Initiative (SBC funding) has served 24,885 low-income households in New York.

• The energy cost for the average low-income household served by the program has been reduced by $231 per year at an average cost of $1,227 per household.23

Table 4-28 presents a sample of key logic model-driven indicators of program success, especially those related to market progress, as tracked by the evaluation and program activities.

Table 4-28. EmPower New YorkSM Program – Key Market Indicators and Program Cumulative Progress (SBC-funded only)

Topic Indicator Most Recent (2007, unless noted)

Number of referrals to the Program 48,446

Number of participants selected for comprehensive audit, education, electric reduction, and Home Performance services

29,330

Number and types of community-based organizations working with Program

40 Offices for the Aging, 5 Local Department of Social Services, 20 Housing Agencies, and 35 other Community Based

Organizations

Number of WAP agencies working with Program 47

Number of utilities working with Program 6

Recruitment of Low-Income Households

Number of energy services contractors working with Program

81

Low-income Participants receiving print and in-home education 42,075

23 This savings amount includes therm savings in projects co-funded with the National Grid Gas Customer Efficiency Program.


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Topic Indicator Most Recent (2007, unless noted)

Households attending energy and financial management workshops

13,159 attendees in 1,676 workshops Households and Buildings Served

Number of low-income buildings with energy efficient measures installed

24,885


Table 4-29 presents cumulative annual net energy and demand savings for the program from inception through December 31, 2007. Realization rates are developed to account for differences in program reported savings and performance of actual installations. Adjustments for realization rate are shown in the table. Attribution analysis, which determines whether the gross savings estimate should be further adjusted downward or upward for freeridership or spillover, was not performed for this Program.

In 2007, a full measurement and verification study was conducted on the EmPower New York Program. The realization rates shown in Table 4-29 are reflect the results of this study. Further discussion of recommendations resulting from this study can be found in Section 4.8.6.

Table 4-29. EmPower New YorkSM Program Cumulative Annual Energy and Peak Demand Savings (Through December 2007)


Realization Rate Adjusted Gross Savings

Net-to-Gross Ratio Net Savings

EmPower New YorkSM

MWh/year 32,031 0.8 25,945 Not Evaluated 25,945

MW On-Peak 3.7 1.0 3.7 Not Evaluated 3.7

MMBtu1 125,136 1.0 125,136 Not Evaluated 125,136

Weatherization Network Initiative

MWh/year 8,242 1.0 8,242 Not Evaluated 8,242

MW On-Peak 1.3 1.0 1.3 Not Evaluated 1.3

Combined EmPower New YorkSM Program

MWh/year 40,273 N/A 34,187 N/A 34,187

MW On-Peak 4.9 N/A 4.9 N/A 4.9

MMBtu 125,136 N/A 125,136 N/A 125,136 1 This table includes therm savings for projects co-funded with the National Grid Gas Customer Efficiency Program. A total of 1,142 households received home performance measures through this funding mechanism, which resulting in an average savings of 30.7 MMBtu per home.

4.8.5 EmPower Program Process Evaluation

This evaluation provided the results of a process evaluation of the first two years of implementation of the EmPower New YorkSM Program (EmPower). The evaluation focused on the period of time that the program provided services to customers of two of the State’s major electric utilities (July 1, 2004, to June 30, 2006). In Fall 2006, the Program expanded to include other utilities and referral agencies. The


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process evaluation sought to provide NYSERDA with lessons learned from the first two years of implementation that could be used to modify and improve the program under the third cycle of SBC funding.

The evaluation team conducted 13 in-depth interviews with NYSERDA staff, the implementation contractor, and key stakeholders involved in EmPower, as well as telephone surveys with 25 contractors and agencies involved in the delivery of program.

The EmPower program has far exceeded the original referral and production goals established for serving customers of National Grid and the New York State Electric and Gas Company (NYSEG). Originally solely SBC-funded, the addition of monetary support from other sources has enabled EmPower to serve more customers sooner than anticipated, as well as to provide more treatments to customers served through the program. At the same time, EmPower has been able to maintain a focus on the original program targets set for National Grid and NYSEG, and was on track to meet these targets ahead of schedule in 2007. Table 4-30 summarizes the original program objectives from June 2004 and their status based on the findings from this evaluation.

Table 4-30. Summary of Original Program Objectives and their Achievement

Program Objectives1 Status

Provide cost-effective energy efficiency measures with a focus on electric reduction for participants in the Niagara Mohawk [National Grid] and NYSEG low-income programs. Achieved

Provide energy use management education services and energy efficiency measure retrofits to at least the same number of customers currently being served by the utility programs. Achieved

Develop an effective referral mechanism to EmPower (formerly called LEAP) to target energy efficiency services to customers with high energy burdens. Achieved

Demonstrate that low-income energy efficiency services are effective from both a demand-side perspective, as well as an affordability strategy.

Beyond scope of this study

Provide efficiency services in a consistent and timely manner, and ensure the services are completed in accordance with accepted standards of quality. Achieved

Develop a network of energy service providers that can provide quality services in a timely manner. Achieved

Improve coordination of complementary low-income energy programs, including the Weatherization Assistance Program and the Home Energy Assistance Program, to maximize the resources available to customers.

Achieved

Adopt a “whole house/fuel neutral approach” as appropriate and within budgetary constraints to address affordability issues when services through the Weatherization Assistance Program cannot be accomplished within the time limits adopted by EmPower.

Achieved

Improve efficiency of Program administration to maximize resources available to serve more customers by substituting a single administrator for two. Achieved

1 As stated in the Final Plan for a Low-Income Energy Affordability Program (LEAP), submitted by NYSERDA to the NYSPSC, dated June 14, 2004.

As a result of this success, the Program has achieved significant levels of success in terms of numerical goals, as well as a strong level of flexibility toward accommodating various key stakeholder groups while


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maintaining high quality services. As the Program expands, further adjustments that increase consistency and reduce complexity will be valuable and the recommendations that emerge from this process evaluation are intended to further program consistency and simplification.

This process evaluation was completed in June 200724 and was previously summarized in the NYSERDA, New York Energy $martSM Program Quarterly Evaluation and Status Report, Quarter Ending June 31, 2007, August 2007.


In their April 2007 report, Nexant made several recommendations to Program staff to improve the Program and assist in determining savings.25 Each of these recommendations and responses or actions by Program staff is noted below:

• The locations where the three compact fluorescent lamps (CFLs) mailed to each customer are installed by the contractor are not indicated on the “as-built” documents. Nexant recommended reporting the installed locations of these bulbs along with the baseline and retrofit watts per bulb in the as-built documents to assist in more accurately determining savings. Since that report was released, the Program strategy has changed to eliminate mailing of CFLs to customers who receive energy efficiency services; in these instances contractors are now responsible for installing all CFLs on location in high-usage areas and reporting their locations. In EmPCalc, the program audit software, the number of hours of usage per bulb is downgraded as more bulbs are installed per home.

• Devise a methodology to automate the electronic transfer of results from the EmPower New YorkSM Calculator to the EmPower New YorkSM database. Program staff has begun discussions with the Department of Housing and Community Renewal on their TIPS software and Performance System Development for the TREAT software in order to pull the best features of each into a single auditing tool. Therefore, work on this particular recommendation is on hold pending the outcome of these efforts.

• Devise a methodology to incorporate the AHAM26 baseline energy usage data, adjusted for degradation for refrigerators and freezers in to the EmPower New YorkSM Calculator to avoid the manual data entry errors that occur while transferring results from the REFRIGERATION® software to the EmPower New YorkSM Calculator. This recommendation will also be addressed with the possible upgrade in software mentioned above.

• Research and quantify energy savings realized from the customer’s implementation of actions presented in the education package. Develop a survey to analyze and evaluate the customer’s behavior after receiving the education package. The Quality Assurance function performed by Conservation Services Group has been enhanced to

24 Research Into Action, Inc., Process Evaluation of the EmPower New YorkSM Program, Final Report, Prepared for NYSERDA, June 2007. 25 Nexant, M&V Evaluation of EmPower New YorkSM Program, Prepared for NYSERDA, April 2007. 26 Association of Home Appliance Manufacturers.


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include a survey of what actions the customer has taken since the work was completed. No action required by Program staff at this point; however, any evaluation surveys will be designed with their assistance.

Research into Action completed a Process Evaluation on the EmPower program in July 2007 and developed a number of recommendations for consideration.27 Each of these recommendations and responses or actions by Program staff is noted below:

• Consider further improvements to the Comprehensive Residential Information System (CRIS) database, so that it is easier to account for multiple services that are delivered to one address. This would help NYSERDA better track interactions between its programs. The program database has been modified to allow for screening of previously served households. NYSERDA will be developing software for tracking interaction between programs.

• Consider implementation of electronic invoicing to eliminate the primary source of remaining paperwork bottlenecks. Other information that is currently tracked in hardcopy may also be considered for scanning and sending/storing as PDF or other electronic files. An electronic invoicing system is in development.

• Consider working with the utilities – NYSEG and National Grid – to jointly sponsor and fund an impact evaluation that will examine the effect of the program on energy affordability and payment behaviors so that the full impacts and benefits of the EmPower program can be captured. The Impact Assessment contractor is conducting an arrearage study. Under this work, utility cooperation will be sought.

• Consider investigating the program impacts being realized from a sample of households that only received the referral packet, as this evaluation suggests that energy savings may be in evidence and worth quantifying. As part of this recommendation, considering having Honeywell conduct follow-up surveys of a portion of package-only customers to quantify actions taken and measures installed before embarking on a more thorough impact study. These customers could also be asked at that point why they elected not to submit the questionnaire and apply for more services. A similar recommendation had been made on the Impact evaluation side; it currently is not a high priority research item.

• Consider leveraging Building Performance Institute (BPI) resources to conduct field inspections of contractors when Honeywell regional resources are stretched, since it is already one of BPIs stated roles regarding recertification. The program determined that BPI field inspections were not an appropriate substitute for a robust Quality Assurance and Quality Control system directly answerable to the program. Accordingly, the program retained the services of an independent third-party QA contractor. QC activities and related contractor training responsibilities continue to reside with the Program Implementer. In addition, the program took steps to support independent BPI field inspections through the application process:

27 Research Into Action, EmPower Process Evaluation, Prepared for NYSERDA, July 2007

38BBuying Strategies and Energy Awareness Program

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participants are given the option to allow EmPower to share their contact information with BPI for the purpose of conducting BPI-initiated QA inspections.

• Revisit Program rules regarding reassignment of jobs from contractors and agencies that are taking a long time to reach customers with the initial home visit to make sure they are applied to both private firms and agencies. This will ensure that backlogs are minimized and customers are served expeditiously regardless of what type of entity is providing service under the program. Honeywell has increased contractor enrollment, which is allowing for redistribution of jobs in areas where the primary contractor has been slow to respond. Further development of the contractor network is in progress. All contractors go through the same training process regardless of whether they are a private firm or a weatherization agency.

4.9 Buying Strategies and Energy Awareness Program


The Buying Strategies and Energy Awareness Program is part of NYSERDA’s portfolio of New York Energy $martSM programs serving low-income households in the state. The Buying Strategies and Energy Awareness Programs consist of four initiatives:

• Buying Strategies – This initiative works with the Office of Temporary and Disability Assistance (OTDA) to secure discounts on purchases of home heating oil for customers of the federally funded Low Income Home Energy Assistance Program (LIHEAP) customers.28 The initial Buying Strategies pilot program was launched in 2003 and tested a variety of strategies for securing reduced prices for home heating oil. Using “margin over rack” (MOR) and “discount off retail” (DOR) buying strategies, the Program has increased the buying power of LIHEAP funds for heating oil by four to 11 percent, saving about $50 per year per household. Based on the successes of the earlier pilot efforts, OTDA committed to a three-year phased implementation of the program, the roll out of this Program is shown in Table 4-31. During the 2005-2006 heating season, the Buying Strategies Program included 20 counties, and 200 oil vendors participated in the Program. During the 2006-2007 heating season, the program expanded to 39 counties, with a total of 317 participating oil vendors. The Program expanded its offerings statewide for the 2007-2008 heating season, operating in all 62 counties with 724 oil vendors providing MOR or DOR priced heating oil to HEAP clients. An additional 79 oil vendors are providing heating oil to HEAP clients through price protection plans and/or service contracts.

Table 4-31. Buying Strategies Program Evolution

Heating Season Number of Participating Counties Number of Oil Vendors

2005 – 2006 20 200

2006 – 2007 39 317

2007 - 2008 62 724

28 Customers whom have an annual household income of 60% or less than the State Median Income.


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The Buying Strategies initiative includes a preventive maintenance component for oil-fired heating systems. Under LIHEAP, recipients are offered heating repair and replacement assistance for inoperable furnaces, but they are not offered preventive maintenance services. The Buying Strategies maintenance component addresses this gap by providing maintenance services, resulting in increased efficiencies for operating heating systems and reduced health risks and safety problems due to malfunctioning systems. The “Clean & Tune” service is currently available to LIHEAP customers of participating oil vendors as an incentive to offer the discount on oil purchases.

• Targeted Marketing and Outreach – This initiative works to increase participation in all NYSERDA-, State-, federal-, utility- and community-based low-income energy efficiency and energy assistance programs. The initiative targets hard-to-reach (HTR) customers such as the elderly, the low-income population, and the non-English speaking population, delivering messages specifically tailored for these groups to make sure they can make informed choices about their options for reducing energy costs. The initiative supplements existing marketing activities and distributes information through events, seminars and meetings sponsored by community-based organizations (CBOs). It also places print advertisements and articles in publications and newspapers that are specifically designed to reach low-income and other HTR populations, as well as radio advertising.

• Low-Income Forum on Energy (LIFE) – LIFE provides a forum where energy industry professionals, policy makers, low-income serving agencies, and energy program implementers can discuss issues relevant to the low-income sector. LIFE conducts large statewide conferences, smaller regional meetings, and steering committee meetings to share information about emerging issues and best practices.

• Energy Smart Students – The Buying Strategies and Energy Awareness Program contributes funding to the Energy Smart Students (ESS) Program, which is described in Section 4.8 above.

The Program budget is $16.6 million.


Table 4-32 shows the Program’s five-year goals and performance over the most recent 18 months. The Program has already surpassed three of its four goals.

Table 4-32. Buying Strategies and Energy Awareness Program – Long-Term Goals and Achievements

Activity

Program Goals(July 1, 2006



December 31, 2007

% of Goal Achieved

Funds leveraged through Buying Strategies initiative $20 million $2.5-3.2 million 15%

Additional low-income individuals reached via newsletters, weekly newspapers, etc. (readership) 5 million 5,786,313 116%

Additional low-income individuals reached via seminars and workshops (attendees) 15,000 32,395 216%

Additional contractors and other partners recruited in low-income districts 50 225 450%

38BBuying Strategies and Energy Awareness Program

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• One hundred and twenty-one companies have signed Participation Agreements to participate in the Clean and Tune service under Buying Strategies.

• Based on data from the 2006-2007 heating season, the price savings per gallon of fuel delivered through the Buying Strategies Initiative averaged 15 cents, assuming an average LIHEAP grant of $400, the average out-of-pocket savings per LIHEAP client for the heating season is about $60. Savings estimates for the 2007-2008 heating season are not yet available.

• An estimated 21,000 low-income students will benefit from improved energy education as a result of workshops held by the Energy Smart Students Program in the past 18 months.

Table 4-33 presents the key outputs for the Buying Strategies and Energy Awareness Program through December 31, 2007.

Table 4-33. Buying Strategies and Energy Awareness Program – Key Program Outputs


Buying Strategies

Total number of participating oil vendors 803

Number of clean and tune contractors enrolled 121

Number of clean and tune services 1,182

Number of oil buying educational material distributed (includes materials sent out by OTDA and NYSERDA)

100,000

Low-Income Forum on Energy (LIFE)

Numbers of LIFE Steering Committee members 24 member organizations

Number of LIFE meetings and conferences held 33 regional meetings, 5 statewide conferences

Number of attendees at LIFE meetings and conferences 2,501

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5


5.1 Overview of the Research and Development Programs

NYSERDA’s Research and Development (R&D) activities are concerned with five primary areas: energy resources, transportation and power systems, environment, industry, and buildings. Projects in these areas address technologies and mechanisms that affect energy supply and meet the needs of end users. As a result, crosscutting issues such an environmental protection, waste management, energy product development, and renewable energy technologies are addressed in several programs. More complete program descriptions can be found in the System Benefits Charge Proposed Plan for New York Energy $martSM Programs (2006-2011).1 Public Benefit Power Transmission and Distribution Research. The Public Benefit Power Transmission and Distribution Research Program support transmission and distribution (T&D) research that has broad statewide benefits. Projects provide improvements to power reliability, quality and security, and reduce the cost of energy and energy delivery. The New York State Independent System Operator (NYISO) and the New York State Reliability Council (NYSRC) are key stakeholders in the T&D research program, and NYSERDA will coordinate with both of these entities. Clean Energy Infrastructure. The previous End-Use Renewables (EUR) Program provided the foundation for the creation of the Clean Energy Infrastructure Program. Clean Energy Infrastructure efforts will be closely integrated with other SBC-funded efforts, such as Distributed Energy Resources, to develop and commercialize clean energy technologies. The ultimate goal of these programs is to reach a point where the value of the technology is worth the investment required by the consumer, and the market infrastructure is in a position to deliver and support the technology over the long term. This program is complementing efforts under the Renewable Portfolio Standard (RPS) by supporting training, education and market development for RPS-eligible technologies such as photovoltaics. The Clean Energy Infrastructure funds may also be used to reduce the installation and operating cost of systems not eligible for RPS funding. Power Systems Product Development. The goal of this program is to work with New York technology companies to develop distributed generation and storage products, and expand the number of marketable competitive products that reduce peak load, improve power quality, and provide improved cost-effective

1 Found on NYSERDA’s Website at: www.nyserda.org/publications/sbcOperatingPlan2006.pdf.


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environmental performance. The Power Systems Product Development Program supports New York businesses in all aspects of product development necessary to create and commercialize power generating products that are clean, efficient, reliable, and cost effective, as well as other products that reduce peak demand or improve end user power quality. Additionally, the Program focuses on New York specific issues such as economic development and job creation in the State; targets technologies and opportunities that are not being addressed by the market; addresses regulatory barriers to the adoption of superior new technologies; and, emphasizes the development of economically-competitive options for end users.

DG-CHP Demonstration. The DG-CHP Demonstration Program will contribute to support the growth of combined heat and power and other distributed generation applications in New York. The Program provides funding for site-specific feasibility studies and demonstrations, and seeks to improve awareness of end-users and project developers of DG-CHP. The Program also seeks to address DG-related issues such as DG permitting; Standard Interconnection Requirements (SIR); utility standby service; tariffs; technology risk; renewable fuel options such as anaerobic digester and landfill gas; and the impact of fluctuating prices of natural gas. The Program uses financial incentives to encourage customer-sited DG using commercially available DG technologies such as reciprocating engines. The Program will be coordinated with similar offerings from RPS Customer-Sited tier and Con Edison’s System Wide Demand Reduction programs. Demand Response and Innovative Rate Research. This new initiative supports participation by small customers in the NYISO’s wholesale demand response and time-sensitive retail electric pilots. Residential and small commercial loads constitute a small percentage of participants in these programs because of their relatively small loads, the high cost of aggregation, and the lack of flexible metering options and other load control technologies. The Program promotes the development, demonstration, and adoption of end-use technologies that have flexible load capabilities, such as air conditioners and lighting that are enhanced with features that allow remote access and group control for easier load reduction in response to peak demand and price signals. Additionally, the Program’s time-sensitive pilots promote the development of innovative electric service rates by energy services companies. The program concentrates on the New York City metropolitan area where capacity is particularly constrained and load reductions are more valuable and necessary.

Electric Transportation. This Program supports emerging technologies from inception through field testing and pre-commercial deployment. The benefits of the Electric Transportation Program will include peak load reduction in the New York City load pocket and permanent energy use reductions. These reductions will result in cost reductions to the subway and commuter rail systems and reduced transmission congestion in the region. Additionally, many projects are expected to reduce transportation costs and emissions from petroleum-fueled vehicles. Environmental Monitoring, Evaluation, and Protection. The Environmental Monitoring, Evaluation and Protection Program (EMEP) commenced in the late 1990s in an effort to increase understanding of the environmental impacts of electricity production. EMEP initiatives are building on past efforts and evolving to support policy-relevant research in five primary areas: ecosystem response to sulfur, mercury, and nitrogen deposition; health- and energy-related research on air quality, particulate matter, ozone, and co-pollutants; climate change; environmental impacts of alternative energy; and crosscutting environmental science and technology projects. The Program is guided by a steering committee comprised of major stakeholder groups. In addition a separate science advisory committee continues to provide technical review. The Program has maintained a robust science and policy communication component to deliver program findings to policy-makers, scientists, and the public. The EMEP closely collaborates with regional and national entities to leverage funds for pertinent research projects.

R&D Program Evaluation Activities

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Industrial Process & Product Innovation (formerly known as Industrial Research, Development, and Demonstration). The Industrial Process & Product Innovation (IPPI) Program supports feasibility studies and technology demonstrations that: (1) improve energy productivity and competitiveness of New York manufacturers (minimize cost per unit output), (2) encourage capital investment and employment growth in New York facilities, (3) introduce New York manufactured goods into new markets, and (4) encourage adoption of process changes that minimize waste. Cost-shared demonstration projects reduce risk and encourage manufacturers to adopt innovative and used process alternatives. IRDD is a collaborative effort of Industrial and Environmental R&D and Energy Efficiency Services.

Municipal Water and Wastewater Efficiency. The Municipal Water and Wastewater Efficiency initiative is a collaborative effort between NYSERDA’s R&D and Energy Efficiency Services programs. Since 2000, the ongoing water and wastewater initiative has supported projects that accelerate the use of energy-efficient and innovative technologies by municipal water and wastewater systems in New York through demonstrations, technology transfer, and feasibility studies. All projects have had strong technology transfer components. Additionally, the municipal water and wastewater treatment sector has been integrated into the Enhanced Commercial/Industrial Performance Program.

Next Generation and Emerging Technologies. This Program emphasizes discrete and integrated end-use technologies for buildings, daylighting applications, solar thermal applications, and emerging technologies for industry and buildings not covered elsewhere in NYSERDA’s New York Energy $martSM portfolio of programs. The bulk of funds for this Program are being administered through narrowly defined competitive solicitations possibly focusing on advanced building demonstrations, discrete building technologies, solar thermal applications, daylighting applications, and emerging technologies. The Program emphasis is on funding developers and producers of energy-efficient technologies that would be commercially available to end users. Demonstration solicitations are open to all end-use customers, particularly those with high electric loads.

Regional Greenhouse Gas Initiative. On August 28, 2007, NYSERDA was directed by the Public Service Commission to make available up to $3 million in SBC funds for implementation of critical components of the New York State Carbon Dioxide (CO2) Budget Trading Program, designed to meet the ten-state RGGI objectives. Specifically, NYSERDA was directed to help finance the initial RGGI auction and the start-up costs of RGGI, Inc. (i.e., the Regional Organization created in New York City to help implement RGGI). Activities to be funded include: development of an emission allowance tracking system, development of an auction platform, development of protocols for verification of emission offsets, and start-up program costs of RGGI, Inc. NYSERDA was directed to seek recovery of such funds once the auction of emissions allowances begins. An RFP was issued, and World Energy Solutions, Inc. was selected to provide services related to the design and implementation of a regional allowance auction.

5.2 R&D Program Evaluation Activities

Table 5-1 provides a snapshot of all recently completed, in-progress, and planned evaluation activities for the R&D programs. The evaluation activities completed in 2007 are highlighted within Section 5, and were used along with results from past evaluations to inform the overall findings and conclusions presented in this report. For evaluation projects currently underway or planned, the anticipated completion date shown in Table 5-1 coincides with when NYSERDA expects to feature results in future New York Energy $martSM quarterly or annual evaluation and status reports.


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Table 5-1. R&D Program Evaluation Activities

Program Name Evaluation Activities Completed in 2007 Evaluation Activities Underway or Planned(Anticipated Completion Date)

R&D Portfolio Program Logic

Phase 1 R&D Program Macroeconomic Impact Evaluation

Phase 2 R&D Program Impact Evaluation (Q4 2008)

Public Benefit Power T&D Research Program Logic None Planned

Clean Energy Infrastructure

Program Logic Process Evaluation Update (End-Use

Renewables) Process Evaluation (PV)


None Planned

Power Systems Product Development None None Planned

DG-CHP Demonstration

Program Logic Year-End Impact Evaluation Database Review1


Demand Response and Innovative Rate Research

Program Logic Measurement & Verification Update

None Planned

Electric Transportation Program Logic None Planned

EMEP None None Planned

IPPI Program Logic None Planned

Municipal Water and Wastewater Efficiency Program Logic None Planned

Next Generation and Emerging Technologies Program Logic None Planned


5.3 R&D Program Evaluation Findings

Significant progress is being made by the Research & Development portfolio. This section summarizes key evaluation findings from the latest set of evaluation activities, and from the cumulative body of work conducted by NYSERDA and its evaluation contractors over the past several years.

R&D Program Evaluation Findings

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5.3.1 Energy, Peak Demand and Fuel Savings and Clean Generation

Through NYSERDA’s Impact Assessment activities, independent third-party contractor teams assessed the energy and peak demand savings and clean generation reported for its R&D programs. Methods used in this assessment included on-site verification of equipment installation and functionality, and review of NYSERDA’s files for reasonableness and accuracy. Based on this review, the contractors adjusted the savings reported by NYSERDA. In turn, the contractors further adjusted these figures, based on primary research, to account for freeridership and spillover. Table 5-2 summarizes the estimated electricity savings and clean generation for each of the applicable R&D programs. Table 5-3 summarizes peak demand reductions. Table 5-4 shows other fuel savings for the R&D programs.

Table 5-2. R&D Program Electricity Savings through December 31, 2007



June 30, 2006 December 31, 2007

DG-CHP Demonstration Program

Con Edison

82.7

42.0

101.1

52.4

Renewable Energy Production

Con Edison

103.8

0.5

106.2

0.9

Overlap Removed 6.6 8.1

Con Edison R&D Total 42.5 53.3

Statewide R&D Total 179.9 199.1

Table 5-3. R&D Program Peak Demand Reductions through December 31, 2007

Demand Savings (MW)


June 30, 2006 December 31, 2007

DG-CHP Demonstration Program

Con Edison

18.1

8.5

23.7

11.5


Con Edison

137.2

68.6

99.0a

21.0

Renewable Energy Production

Con Edison

8.1

0.4

9.8

0.5

Overlap Removed 1.3 1.7

Con Edison R&D Total 77.4 33.0

Statewide R&D Total 162.1 130.8

a MW enabled under the SBC2 program Enabling Technologies for Price Responsive Load were not required to persist beyond the period of the contract. As such, the available MW have steadily declined since the program’s close.


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Table 5-4. R&D Program Fuel Savings through December 31, 2007



June 30, 2006 December 31, 2007

DG-CHP Demonstration Program1

Con Edison

-571,310

-266,937

-778,866

-404,017

Con Edison R&D Total -266,937 -404,017

Statewide R&D Total -571,310 -778,866 1 Because the electricity saved by the DG-CHP projects replaces electricity formerly purchased from the grid, the program has reduced fuel used at central generating stations, for a net decrease statewide due to greater efficiency of the DG-CHP systems at sites where imported fuel is used. The fuel avoided at the central generating plant is determined from the electricity generated by the DG-CHP installations. Furthermore, at additional projects such as wastewater treatment plants, electricity generation is powered fully or partially by digester gas produced on site. Such fuel switching achieves natural gas conservation above and beyond what is achieved through efficiency alone.

5.3.2 Macroeconomic Impact Evaluation of Product Development Activities – Phase One

Background and Analytic Approach

A primary goal of NYSERDA’s Research and Development (R&D) programs is to improve the economic environment in New York. R&D projects categorized as product development are designed to increase the manufacturing and sale of new products in the marketplace. Sales of new products set off a ripple effect that impacts many sectors of the New York economy. NYSERDA staff, working with the Impact Evaluation Team, is developing a multi-faceted approach to quantify these effects.

NYSERDA modeled the impact of new product sales using an econometric modeling program called Policy Insight, developed by Regional Economic Models, Inc. (REMI) of Amherst, Massachusetts. Policy Insight generates year-by-year estimates of the total regional effects of specific policy initiatives. A wide range of input variables are available to predict economic and demographic effects.

Estimates of product sales from the projects were entered into the modeling tool and the sales were mapped to the Policy Insight sector that most closely resembled the characteristics of the new product. Model output measured the statewide year-by-year changes in macroeconomic variables, including: net employment, net employment income, gross state product (GSP),2 and capital investment.

Sales were estimated based on recoupment payments received by companies that were awarded NYSERDA funding. In general, recoupment agreements state that companies must repay NYSERDA at a rate of 1.5% of sales revenues until the full funding amount is repaid. The repayment amounts by year were obtained from NYSERDA’s financial records. Because the repayment amount is capped, and because sales were estimated using the repayments, the sales used in the analyses represent the lower limits on sales.3

2 GSP, also known as value added, includes the components of labor income (employee compensation and proprietor income) plus property income (interest, rental income, royalties, dividends, and profits) and indirect business taxes (primarily sales and excise taxes). 3 Work is currently underway that will allow estimation of sales that would occur beyond the repayment obligation.


5-7


Initial Results

Recoupment amounts are shown in Figure 5-1 for the 124 companies that made recoupment payments from 1997 through 2007. The average repayment amount is $54,994 whereas the median amount is $9,768 and the highest repayment amount is $580,000. These payments were used to estimate sales in the years 1997 to 2007. The estimated sales amounts are shown in Figure 5-2. Sales by sector are shown in Figure 5-3.

Figure 5-1. Recoupment Payment Amounts (1997 to 2007)

Recoupment Payment Amounts

$-

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

1 7 13 19 25 31 37 43 49 55 61 67 73 79 85 91 97 103 109 115 121

Individual Firms

Rec

oupm

ent A

mou

nt

Mean recoupment amount: $54,997 (Std. deviation = $104,311)Median recoupment amount: $9,768


5-8

Figure 5-2. Sales by Year (1997 to 2007)

Estimated Sales

$-

$20

$40

$60

$80

$100

$120

$140

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Mill

ions

($20

07)


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Figure 5-3. Sales from New Products (1997 to 2007) by Sector

Sales by Sector

$- $20 $40 $60 $80 $100 $120 $140 $160 $180

Transp equip mfg. exc. motor veh

Support activities for mining

Plastics, rubber prod mfg

Rental, leasing services

Oil, gas extraction

Prof, tech services

Chemical mfg

Agriculture

Motor vehicle mfg

Waste mgmnt, remed services

Nonmetallic mineral prod mfg

Miscellaneous mfg

Fabricated metal prod mfg

Computer, electronic prod mfg

Electrical equip, appliance mfg

Machinery mfg

Mill

ions

($20

07)

The output from the model is presented in Table 5-5. For the 11-year period from 1997 through 2007, the years for which sales were reported, on average, GSP rose by $39.2 million per year, net employment rose by 322 jobs per year, employment income rose by $19.4 million per year, and capital investment rose by $3.4 million per year.


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Table 5-5. Net Impacts on the New York State Economy from NYSERDA-funded Product Development Projects

Gross State Product1

(Millions 2007$)

Net Employment(Number of jobs)

Employment Income (Millions 2007$)

Capital Investment(Millions 2007$)

1997 $15.6 149 $7.1 $0.4

1998 $55.0 523 $26.4 $1.6

1999 $51.5 483 $25.2 $3.1

2000 $37.3 343 $19.9 $3.5

2001 $39.1 348 $20.8 $4.0

2002 $31.2 251 $16.4 $3.6

2003 $26.7 202 $14.2 $3.3

2004 $26.2 194 $14.0 $3.5

2005 $35.9 259 $17.4 $3.9

2006 $46.7 318 $21.1 $4.5

2007 $75.7 476 $31.3 $5.8

Average (1997 to 2007) $39.2 322 $19.4 $3.4

Present Value (1997 to 2020) in 2007

$513.6a

1 Gross State Product, also known as value added. a Includes ripple effects that extend through 2020. Future benefit streams were discounted at 3%; past benefit streams were compounded at 3%.

The impact of the product sales on GSP extends beyond 2007 due to economic ripple effects. The present value of the incremental GSP for the period 1997 to 2020, also shown in Table 5-5, is $513.6 million. To assess cost effectiveness, the change in GSP was compared to NYSERDA spending on product development. The lag between the time a company receives NYSERDA funding and sales of new products was assumed to be five years. Thus, economic impacts from sales that occurred from 1997 through 2007 were assumed to have resulted from funding during the period 1992 to 2002.

Product development funding for the period 1992 to 2002 is shown in Figure 5-4 and includes SBC and non-SBC funding sources. SBC funding for product development started in 1999. Due to similarities in the types of projects funded, the ratio of economic benefits to NYSERDA spending is presumed to be the same for both funding sources. The present value of this funding, compounded at 3%, is $166.2 million in $2007. This spending, compared to the present value of the change in gross state product of $513.6 million in $2007, results in a benefit/cost ratio of 3.1. This preliminary analysis shows that every one dollar spent on product development projects leads to an increase in the GSP of $3.1. This benefit/cost ratio is conservative in that it does not account for product sales beyond the recoupment obligation nor the associated energy benefits.


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Figure 5-4. Product Development Funding (1992 to 2007)

Product Development Funding

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Mill

ions

(Nom

inal

)

Non-SBC SBC

Costs represented in benefit-cost analysis

Also shown in Figure 5-4 is the NYSERDA funding for product development projects for the period 2003 to 2007 from both SBC and non-SBC sources. Total product development funding declined in recent years, but increased in 2007, and is expected to grow.

Survey of Firms with Reported Sales

To further examine the economic impact of product development funding, firms that have submitted recoupment payments will be surveyed. The survey will obtain information about:

• Product benefits

• Sales revenues from NYSERDA-supported products and follow-on products

• Information on the current state of the products’ life cycle

• Sources and magnitude of investment capital

• Impact of NYSERDA funding on the products’ development and commercialization paths

• Total development and commercialization costs

The information will be used to refine the macroeconomic impacts.


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Exploratory Interviews

A preliminary survey, developed in early 2008, was used to conduct exploratory interviews with a small number of firms. The purpose of the exploratory inquiry was to determine the most effective and efficient manner of obtaining the information needed to evaluate product development projects. The process was expected to help determine how much of the needed information was actually available, how accurately participants could respond to questions, and how best to frame the questions.

Exploratory telephone interviews were conducted with four firms randomly selected from the 124 firms that have made recoupment payments to NYSERDA. NYSERDA provided primary contact information to the Impact Evaluation Team who sent them emails with information on the survey’s purpose and scope, along with a letter from NYSERDA that requested their cooperation. Phone calls were then made to schedule and conduct the surveys. Surveys were conducted with project managers or senior firm management; individuals who were familiar with the NYSERDA incentive, the product that was funded, and the impact of the incentive on the firm’s revenue and employment. Respondents were assured confidentiality and that data will be reported in a way that will not identify their organizations.

The surveys provided anecdotal information on the timing of funding, NYSERDA’s impact on New York’s economy, product development costs, market impacts, and the benefits of the product improvements. Although the small sample size does not allow for inferential methods, a brief summary of interview results is presented below.

Firm and funding characteristics

• The four firms produce materials and goods ranging from manufacturing inputs to final products sold to commercial or residential customers.

• NYSERDA funding was approximately $400,000 for three of the firms, and approximately $1 million dollars for the fourth.

Timing of NYSERDA funding

• One firm reported that NYSERDA provided funding at the product’s concept phase and two firms reported that the funding was provided at the product development phase. All three of these firms reported that NYSERDA’s funding was provided less than one year into the development of the product.

NYSERDA impact on development and commercialization

• All four firms reported that NYSERDA’s assistance had a positive impact on both the development and commercialization of the product. The impact on product development was greater than on product commercialization.

• Three of the four firms reported that NYSERDA’s support decreased the expected development timeline, and one firm reported that the funding decreased the development timeline by more than five years.

Patents

• Two of the firms have patents associated with their products, and one firm reported that NYSERDA’s involvement decreased the time needed to get the patent by two years.


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New York impact

• Three of the firms reported that all of the firm’s products are manufactured in New York. These firms also reported that all of the firm’s employees are in New York. The fourth firm, which was in New York when it received NYSERDA funding, has since relocated its manufacturing facilities.

• Three of the four firms reported that the company has expanded operations in New York due to the product associated with NYSERDA funding, and one reported that the firm expanded operations in New York due to follow-on products.

• Employment increased significantly since the time of NYSERDA’s funding for all of the firms surveyed, and three of the four firms stated that the employment increase was positively impacted by NYSERDA funding.

Sales in New York

• One firm reported that 100% of the product sales are in New York. Two firms reported New York sales to be between five and ten percent.

Product development costs

• Respondents estimated that development costs ranged from $1 to $5 million dollars.

• All four firms reported that other sources of funding were received after the NYSERDA funding.

• Three respondents stated that NYSERDA’s acceptance of the product was extremely important or important for obtaining the other sources of funds.

Market impacts

• All four firms reported that NYSERDA’s involvement was important in the development of the market.

• Two firms estimated the annual revenue at which sales will peak at $50 and $100 million.

• All of the firms reported that it is unlikely that the product will be replaced with a new product within ten years.

Product improvements

• The products offer improvements in efficiency and operating costs. In some cases, the products provide substantial reductions in operating costs and energy use. In other cases, the products offer other advantages including reliability and additional benefits that were not available with previous technologies.

The surveys provided preliminary information on the impacts that NYSERDA’s R&D funding has on product development, product improvement, and sales and employment in New York. The results of the interviews will be used to modify the preliminary survey and refine the survey implementation process.

The REMI analysis conducted in conjunction with the preliminary four interviews suggests that the recipients of NYSERDA R&D funding are having a significant positive economic impact in New York. The preliminary surveys also demonstrate that evaluators can collect information on the importance of


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NYSERDA funding to product development, job creation, and other ancillary economic and market impacts. The information gathered from the more extensive future survey will permit the verification and refinement of the inputs to the REMI model and should result in a more robust analysis.

Metrics Database Development

In 2007, NYSERDA staff, with the assistance of the Impact Evaluation Team, completed the design of a metrics database that will provide a mechanism to track the benefits of all R&D programs. This database incorporates key metrics that reflect R&D program goals, including energy savings, demand reductions, technology transfer, and economic indicators. At the time of this report, the database design is being implemented. Data collection using the new database will begin in the spring of 2008. It is envisioned that the database will allow for the routine collection of these metrics over time. This strategy will provide insight into the long-term effects of the R&D investments in a cost-effective manner. The combination of the data collected in the new system, the information currently collected in the recoupment database, and the results of on-going survey efforts should provide a sound basis for evaluating the R&D Portfolio.

5.3.3 Summary of Other Key Program Impacts

Across the programs, numerous five-year goals were set for other key metrics besides energy savings such as: the number of solicitations, studies, and projects; the number of workshops; the number of companies doing business in New York; new products developed and launched; and other important logic model-driven knowledge creation, information dissemination and commercialization progress metrics. Overall, the programs are also performing well with respect to these other goals. Results of each program’s progress toward its stated goals are shown in table format in the subsequent sections.

Key areas of progress in the past 18 months include the following:

• Under the Public Benefit Power Transmission and Distribution Research Program, 15 projects have been approved to provide 14 companies nearly $6 million to pursue development of advanced technologies that will improve the efficiency and delivery of power for electric customers across the state.

• The Clean Energy Infrastructure Program has supported 12 companies in their efforts to expand renewable business networks.

• Six solicitations have been issued that included EMEP funding. These solicitations focused on sequestration, impacts of renewable energy, ecosystems, and air quality.

• A total of 24 cost-shared demonstration projects were selected for funding under the Industrial Process & Product Innovation Program.

• Four solicitations were completed under the Next Generation and Emerging Technologies Program.

Longer-term progress since program inception includes the following highlights:

• Under the DG-CHP Demonstration Program, 45 systems are now operational, representing $21.8 million in program funding and $81.3 million in total system costs.

• The Electric Transportation Program’s Truck Stop Electrification Project developed infrastructure technology, sponsored initial demonstrations and created a New York-based business that allows

Public Benefit Power Transmission and Distribution Research

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long haul trucks to eliminate sleeper cab engine idling during mandatory rest periods. Systems developed for the program are currently being sold nationally and are eligible for State and federal incentives.

5.4 Public Benefit Power Transmission and Distribution Research

5.4.1 Program Description The new Public Benefit Power Transmission and Distribution Research Program will support T&D research that is not utility specific and has broad statewide energy efficiency and reliability benefits. Projects will be selected to provide improvements to power reliability, quality and security, and reduce the cost of energy and energy delivery. Examples of such T&D projects funded through the R&D program include: The NYISO and the NYSRC are key stakeholders in the T&D research program. NYSERDA will coordinate with the NYISO and the NYSRC to implement projects that provide significant statewide benefits for electric ratepayers. A T&D strategic plan was recently prepared by Electric Power Research Institute (EPRI) and identified several projects that should be initiated in cooperation with the NYISO and the NYSRC. These include:

• Developing fast simulation modeling systems to rapidly assess grid stability and anticipate and respond to power disturbances,

• Analyzing system modeling data, phasor measurements, and historical trends to develop real-time grid performance indices that can be displayed through a simplified graphical user interface,

• Monitoring of electric power frequencies to pinpoint and analyze disturbances, and

• Creating business models to promote sustainable investment in transmission and distribution infrastructure.

The five-year budget for this program is $10 million.


The Electric Power Transmission and Distribution Program (PON 1102) offered two funding rounds in 2007 to support transmission and distribution-related projects. All projects are aimed at improving the efficiency of the State’s electric grid, where energy losses in the power delivery system can amount to as much as 10 percent. By improving power delivery efficiency, demand for new generation may be reduced, thereby reducing air emissions and costs.

Table 5-6 summarizes accomplishments through year-end 2007 toward the specific five-year goals set for this program. To date, 15 projects have been approved to provide 14 companies nearly $6 million to pursue development of advanced technologies that will improve the efficiency and delivery of power for electric customers across the State.


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Table 5-6. Public Benefit Power Transmission and Distribution Research Program Goals achieved from July 1, 2006 through December 31, 2007

Shown in Figure 5-5 is the distribution of the types of projects. Of the $6 million awarded to date, nearly 70% was awarded for demonstration projects that are expected to result in installation of hardware or software, 8% was awarded for development and commercialization of new hardware manufactured in New York as well as software developed in New York State, 9% for engineering studies that could potentially support future demonstration projects, and 14% for studies that focus on business, regulatory, and public policy issues that need to be addressed in order to facilitate private investment and technology adoption within the electric power delivery system.

Figure 5-5. Funds Awarded From PON 1102 as of December 2007

Funds Awarded for T&D by Project Type

Demonstrations69%

Product Development

8%

Engineering Studies

9%

Research Studies

14%

Shown in Table 5-7 is the co-funding provided by the project 15 project participants. Overall, every $1 of NYSERDA funding is leveraged by $9.1 of outside funding.

Activity Program Goals (July 1, 2006 through June 30, 2011) Achieved July 1, 2006 through December 31, 2007

Issue annual solicitations 12 or more projects resulting in progress toward program objectives

A total of 15 projects have been funded through two solicitations.

Technology transfer Identify successful projects, undertake specific outreach and knowledge transfer activities aimed at utilities

This is an on-going activity. Upon completion of projects, NYSERDA will assess the outcome of the various projects that have commenced recently, and undertake specific outreach and knowledge transfer activities aimed at utilities, as appropriate. Greater detail will be provided as projects near completion and outreach can commence.

Public Benefit Power Transmission and Distribution Research

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Table 5-7. Co-Funding of T&D Projects Awarded (As of December 2007)

No. of

Projects Project cost NYSERDA funding Co-funding Co-funding Ratio

Demonstrations 6 $46,511,236 $4,103,785 $42,407,451 10.3

Product Development 1 $11,535,732 $500,000 $11,035,732 22.1

Engineering Studies 3 $847,132 $555,079 $292,053 0.5

Research Studies 5 $1,149,247 $814,858 $334,389 0.4

Total 15 $60,043,347 $5,973,722 $54,069,625 9.1

The projects range from first-of-a-kind superconductor cable installation in Manhattan, to transmission line fault-detecting software and a unique underground compressed-air energy storage project near Watkins Glen in the Finger Lakes Region. Together with matching funds from contractors, the collective program value is $60 million. Each of the 15 projects is in contract development and should begin work by the second quarter of 2008. Select projects are described below.

• The largest project, valued at $37.5 million, will demonstrate a new way to tie isolated Con Edison distribution load islands together with sophisticated cable that can significantly reduce customer power outages. Known as Project Hydra, it will be a first-of-its-kind demonstration of a superconducting cable that links two area substations within severely congested distribution networks. Con Edison is partnering with the U.S. Department of Homeland Security and American Superconductor to develop the cable technology that reduces distribution network energy loss and protects substation equipment from fault-currents (short-circuits). NYSERDA is contributing $1 million and anticipates that the technology could be applied in network distribution circuits in downtown Albany and Buffalo.

• The second largest project also involves superconducting cable development by SuperPower, Inc., Schenectady, unit of Royal Philips Electronics N.V. In this project, a prototype superconducting fault-current limiter for use in high-voltage transmission cable will be designed, built, and tested. This technology could significantly improve the overall reliability of the transmission system statewide. Teamed with SuperPower are Sumitomo Electric Industries, Linde Gas, American Electric Power, and Oak Ridge National Laboratory. The project makes use of SuperPower’s second generation of high-temperature superconducting material for transmission-level applications. NYSERDA is providing $500,000 toward this initiative.

• A $4.4 million Smart Grid pilot project with Orange and Rockland Utilities, Inc. (ORU) would upgrade West Nyack area substations and associated distribution circuits to perform as “intelligent” networks with advanced sensors, field devices, on-line decision-making software and improved communications. It would automatically restore power after disturbances, minimize losses, and maximize customer service reliability. NYSERDA is contributing $1 million to the project that will further complement ORU’s advanced metering initiative for customers throughout the service territory.

• A New York City local grid project, with Innoventive Power, LLC, Chevy Chase, MD, Con Edison, and Verizon, will enhance the ability of customer-owned demand-response resources, such as on-site emergency back-up generation, to reduce peak demand within critical load pockets. Thirty-two field sites of customer-owned resources, amounting to about 20 MW, will be coordinated using innovative software protocols to enhance grid reliability in lower Manhattan. NYSERDA is providing $999,665 toward the $2.4 million project and anticipates that its results could be applied statewide.


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• The fifth largest single project, with New York State Electric & Gas, is unique to the Finger Lakes Region and is valued at $373,923. At U.S. Salt Corp’s Watkins Glen facility, an engineering study for a Compressed Air Energy Storage (CAES) facility will be undertaken to determine if underground salt caverns can be filled with compressed air for later discharge to drive electric-generating turbines. This process would pump air into the cavern during low-cost, off-peak hours, to about 1000 psig and store it there until it was needed, replacing natural gas- fueled turbines during peak-demand periods, and providing a dispatchable levelizer to minimize the variability that intermittent wind power imparts on the T&D system.

• In addition to the electric projects, an environmental engineering and economic study will be performed by GE International, Inc. Energy Consulting, Schenectady, to identify and test five scenarios relating to greenhouse gas policy implementation. The electric power sector produces one-quarter of the State’s greenhouse gas emissions and analysis is needed to study the impact of the Regional Greenhouse Gas Initiative’s (10 Northeast states consortium) proposed regional carbon cap and trade program on the reliability of the electric power transmission system. The five cases will focus on variables such as fuel prices, new generation, emission prices, and transmission improvements and will weigh these against generation dispatch, transmission congestion, and changes in power imports into New York. NYSERDA is providing $198,750 toward the total study cost of $265,000.

5.5 Clean Energy Infrastructure

5.5.1 Program Description The success of the previous End-Use Renewables Program provided the foundation for the Clean Energy Infrastructure Program. Clean Energy Infrastructure efforts have been closely integrated with other SBC-funded efforts, such as Distributed Energy Resources, to develop and commercialize clean energy technologies. The ultimate goal of these programs is to reach a point where the value of the technology is worth the investment required by the consumer, and the market infrastructure is in a position to deliver and support the technology over the long term. In 2007 the installation incentives offered under this program were transitioned to the Renewable Portfolio Standard (RPS) Customer-sited Tier program and will be supported by RPS funds. The remaining Clean Energy Infrastructure program components will continue to complement the RPS program by supporting training, education, and market development for RPS-eligible technologies and for clean energy early stage entrepreneurial clean energy technology companies for such technologies as photovoltaics and small wind. The former End-Use Renewables Program placed significant emphasis on training renewable energy professionals, establishing voluntary certification standards for photovoltaic system installers, establishing and promoting accredited training programs in New York, establishing an internship program developing specialized workshops and training tools, and integrating photovoltaic systems on schools with lesson plans that meet New York State learning standards. The Clean Energy Infrastructure Program will continue the work begun under the End-Use Renewables Program and will complement the work done by the RPS Customer-sited Tier program to develop a vibrant, sustainable market for renewable and clean energy technologies using the following strategies:


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• Market participant education, consumer awareness, and market development;

• Targeted research, analysis, and education to address technical and information barriers to renewable and clean energy market development; and

• Innovative initiatives to accelerate the development of early stage entrepreneurial clean energy technology companies. The Program uses an array of business support activities designed to share the risk of implementing new approaches to business growth and market expansion, and to encourage the manufacturing of technologies in New York.



Table 5-8 shows the Program’s five-year goals and performance over the most recent 18 months. Overall, the Program is performing well with respect to these goals.

Table 5-8. Clean Energy Infrastructure Program Goals achieved from July 1, 2006 through December 31, 2007

Activity Program Goals (July 1, 2006 through June 30, 2011)


December 31, 2007

% of Goal Achieved

Education, Consumer Awareness and Market Development

New accredited training institutions 3 0 0%

New certification exams 5 1 20%

Training workshops 25

Self-sustaining accredited training and certification programs for clean energy

technologies in addition to PV 13 52%

Renewable Resource Applications

Stakeholder workshops 7 5 71%

Competitive research solicitations 5

Reduction of knowledge and technical barriers currently affecting installation and operation of wholesale and end-use

clean energy technologies 8 160%

Clean Energy Technology Manufacturing and Business Development

Companies expanding renewable business networks

25 12 48%

Companies expanding manufacturing 10

Increase the number of companies developing and manufacturing clean energy technologies, and serving the clean energy businesses in New York 2 20%


This section highlights key program outputs, as identified through earlier logic model development work, and related market progress. All values reported are cumulative since program inception. Thus, they include accomplishments of the former Wholesale Renewables Program, as well as from the End-Use Renewables activities both prior to and after the adoption of New York’s RPS. Note that the PV and


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Small Wind Incentive activities are now supported with RPS funds. The values reported here are those projects that were built using SBC funding prior to RPS funds being made available. RPS Program results are reported separately.

Table 5-9 presents the key outputs for the Clean Energy Initiative through December 31, 2007. Table 5-10 presents a sample of key logic model-driven indicators of program success, especially those related to market progress, as tracked by the evaluation and program activities.

Table 5-9. Clean Energy Infrastructure – Key Program Outputs


Number of PV and small wind systems installed (PON 716) 865 PV/15 Wind

Dollar value of incentives paid for PV (PON 716) and small wind systems installed (PON 792) $10 million PV/ $334,000 Wind

Total cost of installed PV systems (PON 716) $20 million

Average cost per kW DC of PV installed per sector $8,601 Residential, $8,093 Commercial, $9,101 Industrial

Table 5-10. Clean Energy Infrastructure – Key Market Indicators and Program Cumulative Progress

Topic Indicator 2003 2004 2005 2006, unless noted

Number of participating installers added

14 27 32 26 (2006) 44 (2007)


Average full-time equivalents employed by PV installer firms

3.3 7.7 8.0 -


Installer estimates of residential and commercial customer awareness of PV systems

Residential 18% Commercial 6%

Residential 5%

Commercial 4%

Residential 18%

Commercial 15%

Residential 16%

Commercial 14%


EUR Program installations as a percentage of total capacity of PV and small wind systems installed in New York (Data in this row represent only SBC-funded projects. NYSERDA, NYPA and LIPA have supported other projects outside of the SBC program.)

- - EUR Program has funded 29% of the total PV installed capacity on record

with PSC EUR Program has funded 25% of the state’s total small

wind energy capacity on record

with PSC

-


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Topic Indicator 2003 2004 2005 2006, unless noted

Average total PV system cost per watt (PON 716)

$8.26/watt (DC) $8.31/watt (DC)

$8.43/watt (DC) $8.52/watt (DC)

Pricing/Cost

Installer estimate of market sustainable price for PV systems

Residential & Commercial Customers

$4/watt

Residential $3/watt

Commercial $4/watt


$6/watt


$4/watt


Table 5-11 presents cumulative annual net energy generation for the program from inception through December 31, 2007. Realization rates are developed to account for differences in program reported generation and performance of actual installations. Attribution analysis determines, through various methods, whether the gross generation estimate should be further adjusted downward or upward for freeridership or spillover. Adjustment factors for realization rate and the ultimate program net-to-gross ratio are shown in the table.

The End-Use Renewables Program database received an in-depth review by the Impact Assessment team for discrepancies in project entries, for example, high $/kWh, missing information, etc. Those findings have been shared with program staff and will be integrated into the database.

The Summit Blue MCAC team addressed attribution as part of the in-depth evaluation conducted in 2003. The 2003 evaluation involved surveys with 23 PV installers, 32 PV system owners, two PV training institutions, and others. In 2004, 2005, and 2006, aspects of the in-depth evaluation were revisited through an Integrated Data Collection (IDC) approach whereby surveys are administered to PV system owners at the time of project completion and PV system installers at the time of program application. These later evaluation updates corroborated the original results and suggest that NYSERDA should continue to use a net-to-gross ratio of 1.0 for the EUR Program.


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Table 5-11. Clean Energy Infrastructure Program Cumulative Annual Clean Generation (through December 2007)

Program-Reported

Generation Realization Rate

Adjusted Gross Energy Generations

Net-to-Gross Ratio

Net Energy Generation

End Use Renewables

MWh/year 5,930 1.04 6,167 1.0 6,167

MW 4.2 0.85 3.6 1.0 3.6

Wholesale Renewables

MWh/year 99,995 1.0 99,995 1.0 99,995

MW 6.2 1.0 6.2 1.0 6.2

Clean Energy Totals

MWh/year 105,925 N/A 106,162 N/A 106,162

MW 10.4 N/A 9.8 N/A 9.8

5.5.5 Integrated Data Collection Findings

During 2006-2007, the MCAC team continued its Integrated Data Collection effort covering programmatic and market questions related to the Clean Energy Infrastructure PV Program. Selected findings from this effort include:

• Nineteen additional installers became eligible to participate in the EUR Program in 2006. New entrants to the PV installation market employ more FTE individuals than in previous years (an average of 8.3 in 2006, compared to 3.3 in 2003). Furthermore, the entrance of larger firms focusing exclusively on PV installation appears to reflect industry growth. In each of the past three years, a large PV-focused firm has entered the Program (one 40-person firm entered in 2004, one 30-person firm entered in 2005, and one 32-person firm entered in 2006).

• The reasons why program participants are choosing to invest in PV have not changed. “Helping the environment” remains the most commonly cited reason for installing PV systems (84%). The NYSERDA incentive continues to play a fundamental role in influencing consumers’ decisions to install PV, although the percentage of respondents reporting that the Program’s incentive played a large role dropped to 77%, from the 87%-95% range in the previous three years. Installers have perceived a slight increase in the prices that customers are willing to pay for PV systems, perhaps due to rising energy costs, and this drop in importance of the NYSERDA incentive may reflect this increased willingness to pay. The importance of net metering has risen slightly in the last year, from 72% in 2005 to 77%, although it is still lower than the high of 94% in 2004.

• The 2005 data showed an apparent increase in the perceived market sustainable price to approximately $6.00 per watt for both commercial and residential consumers. Based on the PV installer responses collected during 2006, installer perceptions of the average market sustainable price for PV have returned to just over $4.00 per watt for both residential and commercial customers, similar to the levels reported in 2003 and 2004. There appears to be a slight upwards trend in the market sustainable price, perhaps due to rising energy prices making the investment in PV more attractive.


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• For the most part, program participants appear to choose their installers for reasons of quality and service rather than cost. “Reputation for quality and service” has been the number one reason for selecting a PV system installer for the past two years, while “understanding of consumer needs” is the second-ranked reason for choosing an installer. The vast majority (80%) of participants are very satisfied with the quality of service they received from their installer.

• “Word of mouth” played a key role when it came to choosing an installer. Forty-two percent of respondents selected either “word of mouth from a friend or family member” or “referral from another PV system owner” as the source of information about their PV system installers. The percentage of respondents stating that they used the NYSERDA Website to find an installer rose to 37%, from the range of 28%-32% in previous years.

• Survey results show that “word of mouth” continues to be an important source of awareness about the availability of PV technology, being the most frequently cited source of awareness of PV technology in 2004, 2005, and 2006.

• Installers continue to report a low perceived level of awareness about PV technology on the part of consumers, although a slight increase in commercial customers’ awareness is observed. For the past two years, installers have reported commercial awareness levels of 14-15%, a slight increase over the 2003 and 2004 levels of 6% and 4%, respectively. On the residential side, installer reports of consumer awareness have ranged from 18% in 2003, down to 5% in 2004, and then back up to 18% and 16% in 2005 and 2006, respectively. Consumer awareness levels remain low, implying a continued need for NYSERDA’s consumer education and marketing efforts; 71% of installers believe that the best way to address current market barriers is through an education and awareness campaign.

5.5.6 Process Evaluation

End Use Renewables Process Evaluation Update

This evaluation provided the results of a process evaluation of the Photovoltaic (PV) Program, which is a component of NYSERDA’s Clean Energy Infrastructure Research and Development Program. The research employed in-depth telephone interviews with interconnection staff at each of the six investor-owned electric utilities (eight individuals in all), a Web-based survey to which 40 installers responded, a telephone survey of 46 customers with PV projects completed from the start of installation incentives (April 2003) to February 2005, a telephone survey of 43 conference attendees, and in-depth telephone interviews with 17 training contractors.

Utility staff report making diligent efforts to process applications in compliance with legal requirements and state that any delays are the result of installer inexperience and mistakes. Installers report final interconnection tests are typically within the legal requirements because of the long allowance period – three months – but that application approval often exceeds the required ten business days. Reports of delays vary by utility, but do not vary by installer experience. Installers frequently experience delays in equipment deliveries and problems with municipal regulatory bodies stemming from inexperience with and ignorance of PV systems.

Attendees of the Renewable Energy & Energy Efficiency Workforce Education Conference were highly satisfied with the conference and look forward to the opportunity to attend a subsequent conference. The conference succeeded in attracting organizations actively involved in offering and developing training in renewable energy and efficiency, and attracted both newcomers to the field and long-time professionals. Challenges identified for training programs, and for the profession as a whole, include the need for more


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hands-on training than can typically be accomplished in a classroom setting; this was reflected in several suggestions to establish a master apprenticeship program.

The survey of participants found they are satisfied with their PV systems and are fairly knowledgeable about these systems. The two major problems participants reported – problems with their utilities and with inverter failures – were much more common among the earliest participants than among those participating later. The most commonly reported regrets or desires for additional information concerned installing the PV system so that snow would not collect on the panels and understanding what participants’ experienced as “hidden costs.”

Conclusions and recommendations are offered regarding municipal regulations adversely affecting PV installations, providing installers with templates of one-line system diagrams, sponsoring another workforce development conference, gaining additional understanding of the strengths and limitations of workforce development, and communicating with PV customers.

This process evaluation was completed in July 20074 and was previously summarized in the NYSERDA, New York Energy $martSM Program Quarterly Evaluation and Status Report, Quarter Ending March 31, 2007, May 2007.

PV Program Workforce Development Process Evaluation

This evaluation provides the results of a process evaluation of the photovoltaic (PV) workforce development activities of NYSERDA’s Clean Energy Infrastructure Program. 5 The PV program aims to contribute to the development of a sustainable market for PV technologies in many ways. It strengthens and instills consumer confidence in this relatively unfamiliar technology by supporting the growth and maturation of a qualified, respected, and reliable PV workforce in New York that installs and maintains customer-sited PV systems. The PV program includes, among other activities: requiring that customer incentives go through eligible installers on behalf of their customers who are purchasing new, high quality, grid-connected PV systems; supporting the development of accredited PV training programs; promoting and facilitating nationally recognized certification for PV installers; and providing business development and market support incentives for PV dealers and installers.

NYSERDA’s PV programs were launched publicly in March 1999, and the incentives first became available in 2002, with the first incentive payments made in 2003. The incentives are open to all residential and business customers that pay the System Benefits Charge (SBC), a population of over seven million ratepayers. In late 2007 the funding for PV installations shifted to a different funding source, the Renewable Portfolio Standard charge; however, SBC funds still are used to fund complementary activities deemed essential components of a sustainable market transition, such as: workforce development, product marketing assistance, and public outreach programs.

This evaluation focuses on workforce development issues associated with NYSERDA’s PV program and builds on prior process evaluations of the program conducted in 2004 and 2006.

4 Research Into Action, Inc., Process Evaluation of the Photovoltaic Program Component of the Clean Energy Infrastructure Research and Development Program, Final Report, New York State Energy Research and Development Authority, July 2007. 5 Research Into Action, Inc., Process Evaluation: PV Program Workforce Development Activities, pending completion.


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Study Objectives and Methods

The current study had three objectives. First, was to better understand PV installer workforce development activities in New York State, especially among the network of training programs that have received NYSERDA support to develop or enhance their PV curricula. Second, the study investigated whether a statistical association might be found for NYSERDA’s PV program between installer training and certification and PV project design and installation quality. Finally, the study explored how PV incentive programs around the country address issues of workforce development and assurance of PV project quality. The first and third research objectives employed in-depth telephone interviews and secondary research; the second research objective employed review, coding, and analysis of NYSERDA’s installer eligibility applications and of PV project review documents.

For the first objective, the evaluation team conducted in-depth interviews with eight of the ten organizations that have received assistance from NYSERDA to develop training capabilities (hereafter referred to as “NYSERDA partners”) and with five of the eight organizations (hereafter referred to as “interested institutions”) that have expressed an interest in partnering with NYSERDA to develop PV training capabilities, but have not yet received assistance. The institutions offer Bachelor degrees, Associate degrees, or certificates of training—offered by Boards of Cooperative Educational Services (BOCES) and International Brotherhood of Electrical Workers chapters (IBEW). The analysis provides information about how the established training programs are faring and provides insights into how NYSERDA can better assist its partnering institutions and encourage “interested” institutions to establish training programs. The analysis identifies experiences and challenges unique to a particular type of training organization (e.g., union chapters).

For the second objective, the evaluation team developed protocols to score installer applications for program eligibility and quality assurance reviews of PV system designs and PV installations. The latter protocol was developed in collaboration with a PV consultant under contract to NYSERDA to conduct design and installation reviews and provide other support services. A key characteristic scored for installers was whether they had been certified by the North American Board of Certified Energy Practitioners (NABCEP) as a NABCEP-certified PV installer.

The investigation into the relationship between installer qualifications and PV installation outcomes was exploratory due to its innovative method. As such, a decision was made to phase the analysis by starting with a relatively small sample size—one project for each installer whose project designs or installations had been reviewed previously by PV consultants under contract to NYSERDA. Projects selected were among the first three an installer did in the PV program. The evaluation team analyzed design reviews for 32 projects and installation inspection reviews for 29 projects, for a total of 61 projects. The sample provides 90/10 confidence/precision overall, and 90/15 for each type of review (design and installation).

For the third objective, the evaluation team conducted in-depth interviews with program managers of 11 PV incentive programs around the country, as well as with the NYSERDA Program Manager. These 11 programs were selected to consider such factors as installer requirements, type of incentive offered for PV installations, size of program relative to customer base, program inception date, market sector targeted, net metering, other related programs in the state, and program activity level. The selection was the outcome of extensive preliminary research on 34 programs selected in consultation with the PV manager.

Synopsis of Findings

The NYSERDA partners are actively involved in training students to design and install PV systems, although the scope of their training activities varies. Two-year colleges, four-year colleges, and BOCES report a high demand for PV courses and each estimates it has trained, to date, a total of between 100 and


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300 students, for an estimated total of approximately 700 students trained statewide. On the other hand, IBEW chapters report less demand for PV installer courses, and one chapter has placed its course offerings on-hold, referring interested members to training offered by other IBEW chapters.

Most training partners reported interest in attaining accreditation for their PV curricula, which is one of NYSERDA’s goals for its partners. The training partners did not report any particular barriers to attaining accreditation but rather expressed the view that it would simply take time.

Contacts at both training partners and interested institutions mentioned the relatively low demand for PV systems as a barrier to establishing or expanding training, with the IBEW contacts expressing this view most strongly. Some contacts characterized NYSERDA’s total program budget as not large enough to stimulate demand. Contacts at interested institutions also cited funding, training space, and PV materials as barriers to PV training program development.

Regarding the investigation into the relationship between installer qualifications and installation outcomes, the analysis found NABCEP-certified installers had fewer problems during the installation inspection review, as identified by the PV consultants in their review reports. NABCEP-certified installers had 0.17 problems on average, compared with 0.47 problems for installers lacking certification, a result of the latter group having both more installations with problems (29% versus 17%) and a greater number of problems in those problematic installations (1.6 versus 1.0 problems on average). This finding was statistically significant.

The 12 PV programs reviewed, including NYSERDA’s, vary widely in the PV training offered or supported through funding. Four sponsor technical training, ranging from one day to one week. Three programs have provided funding to schools or renewable energy organizations to develop and offer PV training; an additional program recently began offering training program development funding patterned on NYSERDA’s activities. Additional training-related activities include providing student scholarships or conducting ad hoc training workshops in response to problems observed by the program staff. Of the four programs that have none of these elements, three have funding they are considering allocating to training.

Programs assured the quality of installed systems in a variety of ways: requiring installers to meet specified criteria; relying on State-mandated licensing requirements for PV installers; reviewing site analyses and system designs prior to designating them eligible for incentives; inspecting systems, either on a random basis or 100% of installations; and reducing incentives for systems with output less than expected, as determined from system design reviews or from installation inspections.

Most programs review the site analyses and system designs and use one or two of the other quality assurance activities. Only one program had all five of those activities. NYSERDA designates eligible installers, reviews system designs, and conducts random system installation inspections (historically, about 35%). Six programs, including NYSERDA’s, require installers to meet varying requirements for certification, education, experience, and references. Of the six programs that did not set installer requirements, all had State-mandated licensing requirements and four inspect 100% of installations. Program contacts report satisfaction with both program-established installer requirements and other types of quality assurance activities, yet it was beyond the scope of this study to explore variations among programs in installation quality achieved.

Almost half of the program contacts reported they are reconsidering their installer requirements, illustrating that program managers are keeping an eye on the market and adjusting program requirements, as well as incentives, as needed. One program that is among those with the strictest installer requirements


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is considering changes that would allow more entrants; the other four program contacts are considering adding installer requirements or said the State is contemplating licensing requirements for PV installers.

NYSERDA’s program has installed the fewest number—second to Maine—of systems per year per 100,000 eligible customers—2.4 systems, as compared with the programs in Austin, Texas with 30.2 systems and California with 24.5 systems per year per 100,000 eligible customers. NYSERDA’s program ranks tenth in the list of 12 in terms of annual budget per eligible customer ($0.98 per eligible customer, as compared to the leader, California, with $17.09).

A regression analysis to predict number of systems installed annually found that annual budget and number of NABCEP-certified installers (per 100,000 eligible customers) are significant predictors, with an equation R-square of 0.70. When the number of NABCEP-certified installers is omitted from the regression, program-sponsored training makes a positive contribution to number of systems installed, although the effect does not reach significance.

Conclusions and Recommendations

1. Conclusion: One element of NYSERDA’s program theory underlying its PV efforts has been confirmed: A well qualified workforce, as evidenced by NABCEP certification, leads to higher quality PV installations and contributes to the development of a market for PV.

Recommendation: NYSERDA should continue to support installer training and encourage NABCEP certification.

2. Conclusion A: Workforce development activities and system installation incentives are not sufficient, in themselves, to develop a market for PV or even to match the market penetration rate attained by the eleven other programs reviewed. The comparative program analysis strongly suggests overall program budget is a key determinant of the market penetration rate. This statistical finding is consistent with the opinions offered by some contacts in the current research, as well as in prior process evaluations, that NYSERDA’s total program funding for PV is too low.

Conclusion B: NYSERDA’s workforce development activities, including its efforts to encourage installers to attain NABCEP certification, are constrained by the low penetration rate of incentivized PV systems.

Recommendation: NYSERDA can best increase the market for customer-sited PV systems, the number of PV installations, and the number of NABCEP installers by increasing its program funding.

3. Conclusion: A key barrier to establishing and expanding PV training is the expense of the facilities and equipment necessary to support a hands-on learning environment. Key barriers in the professional development of PV installers are limited field training experience and job placement opportunities.

Recommendation: The PV team should consider the suggestions of its training partners to make available additional PV equipment and practice “roofs” at the training institutions, either permanently or as mobile equipment. NYSERDA could facilitate field training experience and job placement by adding a job board to its Website and adding a restricted-access list of students completing PV training at partnering institutions that could only be accessed by NYSERDA-eligible installers.


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4. Conclusion: The PV programs reviewed use a variety of methods to ensure quality control, including program-specific installer requirements, state-specific installer licensing requirements, inspections up to 100% of systems installed, and adjustment of incentives based on expected or actual performance. Typically, installer requirements offset other methods of ensuring quality, with more stringent installer requirements coupled with other less stringent methods and vice versa.

Recommendation: As the review of programs suggests no approach dominates quality assurance and program implementers all expressed confidence in their methods, NYSERDA should base its quality assurance requirements on practical considerations such as administrative simplicity, efficiency, and clarity.

5. Conclusion: The scoring protocols developed for the evaluation research could be adopted by the PV team and applied to its assessments of installer applications and reviews of PV system designs and installations going forward to augment the current review procedures by providing documentation in a numerical format.

Recommendation: The PV team should consider adopting these or similar protocols. Such protocols would provide NYSERDA with data from which it can summarize current market conditions, such as installer qualifications at time of application and common pitfalls in proposed PV system designs and system installations. NYSERDA could use such data in support of its workforce development activities.


The July 2007 PV process evaluation report by Research Into Action6 cited several recommendations for program improvement. These recommendations and responses or actions by program staff are noted below:

• NYSERDA should raise awareness among municipal governments of the increasing prevalence of PV systems and provide direction on how governments might address PV in their construction codes without constricting the market for this important source of power. NYSERDA could work through such organizations as the New York State Conference of Mayors and Municipal Officials, or the New York regional chapters of the American Planning Association, or the Department of State to raise awareness by:

2. making municipal officials aware that their citizens may soon be asking them to approve PV installations and present the benefits of having their codes appropriately updated;

3. having materials that present example language from cities that have already updated their codes;

4. working with the Department of State to develop model codes and/or procedures for municipalities to follow with regard to PV and other distributed generation; and

5. soliciting the Department of State’s participation in municipal outreach and education efforts.

6 Research Into Action, PV Process Evaluation, July 2007.


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One additional step NYSERDA could take to promote understanding and educate the municipalities is to conduct joint inspections of PV systems with code officials.

NYSERDA staff agrees that there are many opportunities to reduce the time and associated expense involved with obtaining local approval, in some communities, to install PV systems. Staff will continue to work with the Energy $mart Communities Program, and appropriate State agencies, to provide the tools necessary for communities to assess and modify local codes and procedures so as to meet local standards without unduly penalizing PV installations.

• NYSERDA should consider taking steps to ensure that customers and installers understand the process for reporting to the Department of Public Services such instances where they believe the utility is not meeting its obligations under SIR.

NYSERDA routinely refers people to Department staff responsible for interconnection issues and to New York Solar Energy Industries Association (NYSEIA), which compiles installers incident reports that are forwarded to the PSC.

• As most contacts agree that small PV installations are increasingly becoming uniform, NYSERDA could help installers submit accurate interconnection applications to utilities by providing templates of “one-line” system diagrams.

Systems are not all that uniform, given the dozens of modules being used - all varying in wattage, and the many inverters and sizes being used. Finally, many installers have to change system designs after NYSERDA approves them because they frequently are sent modules from the manufacturer that differ from how the design had been based. Manufacturers typically send what they have, rather than what is ordered. Manufacturers have one-line templates readily available to installers and many installers use them. It is unclear what NYSERDA can add further.

• The Program Manager should move forward with plans to communicate with customers through periodic emails. As potential customers of new technologies frequently want to speak with customers already using the technology, the Program Manager should identify those few customers who might be appropriate to be trained as speakers for talking to groups about their own experience with renewables. Such training could particularly focus on those customers participating in the National Tour of Solar Homes.

NYSERDA does not collect email addresses from customers and is reluctant to take on a reference data base since the market is already doing this. Customers request installers to provide references. References offered by NYSERDA may be construed to be an endorsement. NYSERDA could provide names of customer references upon request to potential customers. While this may be a good idea, staff support for this would be necessary. Customers volunteer to display their systems for the Green Buildings Open House Tours every fall at the request of the installers. Customer testimonials and their offers to provide references are already being handled through the private market. NYSERDA could do more, e.g. establishing a list of references that would be voluntary and available upon request; however, staff support resources are not available.

• It could be useful for the PV Program team to gain additional understanding of the strengths and limitations of workforce development. A review of the experiences of other renewable energy programs with fostering a qualified workforce and coordinating it with the development of customer demand could provide valuable lessons for the PV Program.


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A process evaluation of the Workforce Development and Training program was conducted by Research Into Action in 2007-08, and findings are summarized in this report. The evaluation surveyed NYSERDA’s network of current and potential new training partners about their students or participants and curricula. It also reviewed the PV design review and inspection reports files to determine if there were trends in PV installation problems that might indicate a need to develop additional training curricula.

• NYSERDA Program/Project Managers should proceed confidently with their plans to hold a second conference in March 2008 and should consider attendees’ recommendations for enhancing the conference.

The second conference is scheduled for March 2008, and the program incorporated recommendations submitted by last year’s conference attendees.

5.6 Power Systems Product Development

5.6.1 Program Description The Power Systems Product Development Program works with New York technology companies to develop distributed generation and storage products and expand the number of marketable competitive products that reduce peak load, improve power quality, and provide improved cost-effective environmental performance. The Program supports New York business in all aspects of product development necessary to create and commercialize power generating products that are clean, efficient, reliable, and cost effective, as well as other products that reduce peak demand or improve end user power quality. Additionally, the Program focuses on New York specific issues such as economic development and job creation in the State; targets technologies and opportunities that are not being addressed by the market; addresses regulatory barriers to the adoption of superior new technologies; and, emphasizes the development of economically competitive options for end users.

The program areas of focus include:

• Developing products with superior performance relative to decreased grid-supplied energy consumption, peak demand, and improved environmental impact

• Addressing New York-specific issues such as economic development and job creation in the State

• Targeting those technologies and devices that are not currently being addressed by the market

• Reducing environmental impacts of energy production

• Providing economic development opportunities for New York power system firms

• Improving system-wide reliability and peak demand reduction

• Addressing institutional impediments including absence of applicable codes and installation standards

Activities supported under this program element include:

• Product development from concept studies to prototype production and product testing

Power Systems Product Development

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• Technology transfer through conferences, papers and internet accessible data

• Market sector research and support addressing institutional barriers to commercialization The five-year program budget is $25 million.



Table 5-12. Power Systems Product Development Program Goals achieved from July 1, 2006 through December 31, 2007

Activity Program Goals (July

1, 2006 through June 30, 2011)

Achieved July 1, 2006 through December 31, 2007 % of Goal Achieved

Product development contracts awarded 75 15 20%

New products commercially launched since July 1, 2006 5 1 20%

Cumulative sales ($) $50 million $1 million in 2006a 2%

Successful new product field tests and demonstrations 15 3 20%

Projects successfully completing milestones 25 8 32%

Assessments and studies of new technologies completed 20 5 25%

a 2007 sales figures are not yet available. Additionally, $6 million in product sales by Plug Power in 2006 from products launched prior to July 1, 2006.


Projects funded through the program can be categorized as (1) Technology/Market Analysis Studies; (2) Product Development, (3) Demonstration, and (4) Technology Transfer. The Technology/Market Analysis Studies consists of projects that analyze market potential and technological feasibility, designed to benefit policy makers and supply-side market actors. Product Development projects are focused on a clearly defined product and benefits New York manufacturers. Product development activities include prototype development, product testing, and development of commercialization plans. Demonstration projects consist of projects that demonstrate the performance of products that are commercially available. Technology Transfer projects provide information to the general public and other market actors and are designed to support the market infrastructure.

The cumulative encumbered funding by project type is presented in Figure 5-6. Of the $19.9 million encumbered to date, 68% was awarded to product development projects, 17% to demonstration projects, 9% to technology transfer projects, and 6% to market and technology analysis.


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Figure 5-6. Power Systems Funding by Project Type

Funding by Project Type

Demonstration17%

Product Development

68%

Technology Transfer

9%

Analysis6%

The portfolio of projects has a total value of approximately $50 million with approximately $20 million provided via New York Energy SmartSM funding and $30 million provided as co-funding by contractors. Shown in Figure 5-7 is the distribution of funding by technology area. The top three technology areas are fuel cells, energy storage, and renewable energy.

Figure 5-7. Power Systems Funding by Technology Area

Funding by Technology Area

Energy Storage23%

Engine4%

Fuel Cell32%

Other17%

Stirling Engine3%

Renewable Energy21%

Power Systems Product Development

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Commercialization Progress

Products developed include:

• 2.5 kVA inverter

• Computer controlled monitoring and control system

• Central Operation Management System (COMSYS)

• Direct Methanol Fuel Cell

• GAIA Power Tower

• DC Backup Fuel Cell System

• Motor generator component

Economic Benefits

Examples of economic development impacts achieved through the program’s activities include:

• The fuel cell research and development resulted in the development of 320 jobs at the new headquarters R&D and manufacturing facility constructed in New York by Plug Power. There was also $217 million of cash investment from Interros and Norilsk Nickel.

• The Direct Methanol Fuel Cell project brought in $1 million in capital investment from Samsung and Gillette/Duracell. Additionally this product resulted in a 6% equity investment by E.I. Dupont. The Samsung investment was to develop this technology for the portable cell phone product line.

• The 2.5 kVA Utility-Interactive Inverter study has provided subcontracts to New York vendors for manufacturing of various components such as printed circuit boards, enclosures, and Certification testing by Itertek Testing Service.

• GAIA Power Technologies’ power tower has resulted in four investments in New York totaling $3 million. GHO ventures invested $2.25 million, and three separate $250,000 investments were provided by NY Community Investment Company, NJTC Venture Fund and the Small Business Technology Investment Fund of the Empire State Development Corporation. Since 2006, Gaia Power Technologies more than doubled its manufacturing space at its Peekskill facility and expanded to 16 full-time employees.

• The Roosevelt Island Tidal Energy Project resulted in setting up an office at the Cooper Union in New York City. In 2007, the contractor, Verdant Power, relocated its corporate headquarters from Alexandra, VA to New York City.


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5.7 DG-CHP Demonstration


The goal of the DG-CHP Demonstration Program is to contribute to the growth of combined heat and power and other distributed generation applications in New York. The program provides funding for site-specific feasibility studies and demonstrations and seeks to improve awareness by end-users and project developers of DG-CHP. The Program also seeks to address DG-related issues such as DG permitting; Standard Interconnection Requirements (SIR); utility standby service; tariffs; technology risk; and renewable fuel options such as anaerobic digester and landfill gas; and impact of fluctuating prices of natural gas.

The Program uses financial incentives to demonstrate and validate advanced features (such as synchronous-parallel interconnection) of customer-sited DG using commercially available DG technologies such as reciprocating engines and emerging DG technologies such as microturbines. Once validated, commercial DG technologies are supported by NYSERDA through an incentive approach that co-exists along with similar offerings from the RPS Customer-Sited tier and Con Edison’s System Wide Demand Reduction programs.

The total program budget is $67.1 million.


Table 5-13 shows the Program’s five-year goals and performance over the most recent 18 months. While the Program is making progress toward its five-year goals, it is important to note the long time frame that is often required to complete DG-CHP demonstrations, and begin accruing efficiency and environmental benefits. More significant progress has been made since program inception, and is shown in Section 5.7.3.


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Table 5-13. DG-CHP Demonstration Program – Long-Term Goals and Achievements




% of Goal Achieved

Issue annual solicitations and incentive offers

Fund 50 or more CHP demonstrations with a cumulative capacity of 100 MW and associated efficiency and environmental benefits, and with 50 MW downstate.

PON 1043 was issued in June 2006. Thirty-four proposals were received on August 22, 2006. Six CHP demonstration projects were approved. Three projects are underway, one project dropped out, and two projects are in final contract negotiations. PON 1178 was issued in October 2007.1

10% (Number of

projects funded)

Technology transfer

Conduct technology transfer and outreach activities to broaden acceptance of DG and CHP. Hold annual workshops and publish at least 10 final reports per year.

Currently, site-specific performance data is posted on http://chp.nyserda.org for 28 projects. A CHP Conference has been scheduled for June, 2008 in New York City.

N/A

1 In addition to the five projects funded by PON 1043, more projects have been supported through the Enhanced Commercial/Industrial Performance Program, and will be added in the 1st Quarter 2008 report.

5.7.3 Long-Term Program Accomplishments

This section highlights key program outputs identified through the logic model development work, and associated market progress. All values reported are cumulative since program inception, unless otherwise noted. In addition to other key program outputs, Table 5-14 presents the number of operational systems through year-end 2006 and year-end 2007. The number of systems nearly doubled in one year.

Table 5-14. DG-CHP Demonstration Program – Key Program Outputs

Outputs Value

(Cumulative through December 2006)

Value (Cumulative through December

2007)

Number of operational DG-CHP systems 28 45

Total funds awarded for operational DG-CHP systems

$8.9 million $21.8 million

Total cost of operational DG-CHP systems

$39.4 million $81.3 million

Funded Projects Figure 5-8 presents the peak capacity of projects in the portfolio of encumbered projects by prime mover type. Figure 5-9 shows the same by utility service area.


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Figure 5-8. Peak KW Reduction by Prime Mover for Encumbered Projects (As of Year-End 2007)

Peak KW Reduction by Prime Mover

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

CombustionGas Turbine

ReciprocatingEngine

Fuel Cell Microturbine SteamTurbine

Other

Peak

KW

Figure 5-9. Peak KW Reduction by Utility Service Area for Encumbered Projects (Through 2007)

Peak KW Reduction by Utility Service Area

-

10,000

20,000

30,000

40,000

50,000

60,000

ConsolidatedEdison

NYSEG National Grid LIPA RG&E Orange &RocklandUtilities

Peak

KW

Progress toward Commercialization

Capital Attraction

• Private investment in CHP has increased in New York. The total project cost for all projects encumbered through year-end 2007 is $290 million. Of this total, 84% represents funds from project participants.


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Technical achievements

• As a result of the Program, demonstration of innovative electrical interconnection designs has occurred. The system installed at Equity Office Properties in Manhattan was the first installation of a synchronous interconnection system in New York City.

• As a result of the Program, several grid-connected CHP systems that have dual-mode operation (operates in grid-parallel mode during normal conditions and operates in stand-alone mode during grid outage) were successfully demonstrated. For example, during the Northeast Blackout of 2003, the CHP system installed at Greater Rochester International Airport operated in stand-alone mode. The project received an award from the U. S. Environmental Protection Agency (http://www.epa.gov/chp/awards/winners2004.htm).

• As a result of the Program, effective use of non-standard fuel sources (e.g., anaerobic digester gas) for CHP has been demonstrated.

• As a result of the Program, third-party financing for CHP is being demonstrated in several settings, including New York City at 230 Park Avenue.

Market Progress

Market progress, such as increased awareness and knowledge of CHP and increased promotion by CHP trade allies, was measured in 2004. Details of the findings are presented in the “DG-CHP Market Characterization and Market Assessment and Causality Study.”7

Economic and Environmental Benefits

Economic Benefits

• Economic benefits to facility owners include lower energy costs as well as economic impacts from non-energy benefits such as increased reliability and cleaner air. Economic benefits to New York arise when dollars saved on energy are available to spend on other goods and services, promoting economic growth. Past research by ACEEE8 has shown that savings are retained in the local economy and generate greater economic benefit than the dollars spent on energy.9 Recovery and productive use of waste heat from power generation is a critical component of energy efficiency.

Environmental and Other Benefits

• The program has produced ambient air emission reductions. Every proposer is required to submit an emissions analysis and undergo the State Environmental Quality Review Act (SEQRA) process. NOx emissions information was compiled for a subset of projects representative of the program’s portfolio of projects. For each project, the NOx reduction was estimated based on (1) the NOx

7 “DG-CHP Market Characterization and Market Assessment and Causality Study,” by Skumatz Economic Research Associates, Inc., Summit Blue Consulting, LLC, and Quantec, LLC, Project Number 7721, May 2005. 8 Elliot, R. Neal and Mark Spurr. Combined Heat and Power: Capturing Wasted Energy. American Council for an Energy–Efficient Economy. May, 1999. 9 Spurr, Mark. 1999. District Energy Systems Integrated with Combined Heat and Power: Analysis of Environmental and Economic Benefits. Report to the U.S. Environmental Protection Agency. March. Minneapolis, Minn.: International District Energy Association.


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emissions for the installed prime mover, (2) the NOx emissions of the generation facility serving the facility, and (3) the NOx emissions of the thermal equipment. On average, each facility reduced NOx emissions by 50%, or nearly 13,000 lbs. per year, or 1.1 lbs. per megawatt hour (MWh) of electricity produced.

• The program supports the use of renewable energy sources. Of the 111,900 MWh per year currently being generated by operating facilities funded through NYSERDA’s DG-CHP program, approximately 11,000 MWh, or 10%, are from renewable fuel systems.

• The program has supported efforts to improve the reliability of New York’s electric transmission and distribution system. New York Independent System Operator Zones J (New York City) and K (Long Island) are considered key in terms of congestion and system reliability.10 Approximately 41% of the CHP capacity that has been installed or is planned to be installed is in the Con Edison service area.


This section presents cumulative impacts for the program from inception through December 31, 2007.

Table 5-15 presents cumulative annual net energy produced and demand reduced for the program from inception through December 31, 2007. Realization rates are developed to account for differences in program reported savings and performance of actual installations. Attribution analysis determines, through various methods, whether the gross estimates should be further adjusted downward or upward for freeridership or spillover. Adjustments for realization rate, freeridership and spillover, and the ultimate program net-to-gross ratio are also shown in the table.

The DG-CHP Program database received an in-depth review by the Impact Assessment team for discrepancies in project entries, for example, high $/kWh, missing information, etc. Those findings have been shared with program staff and will be integrated into the database.

10 NYISO Electric System Planning Working Group Meeting April 15, 2004, Draft Minutes.


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Table 5-15. DG-CHP Cumulative Annual Energy and Peak Demand Production (Through December 2007

Program-Reported

Production

Realization Rate

Adjusted Gross

Production


Net-to-Gross Ratio1

Net Production

MWh/year 104,336 0.90 94,358 15% 26% 1.07 101,057

MW 22.5 0.98 22.1 15% 26% 1.07 23.7

MMBtu/year2 -819,656 0.88 -727,232 15% 26% 1.07 -778,866 1 Net-to-Gross Ratio = (1-Freeridership) * (1+Spillover). 2 Because the electricity generated by the DG-CHP projects replaces electricity formerly purchased from the grid, the program has reduced fuel used at central generating stations, for a net decrease statewide due to greater efficiency of the DG-CHP systems at sites where imported fuel is used. The fuel avoided at the central generating plant is determined from the electricity generated by the DG-CHP installations. Furthermore, at additional projects, such as waste water treatment plants, electricity generation is powered fully or partially by digester gas produced on site. Such fuel switching achieves natural gas conservation above and beyond what is achieved through efficiency alone.

5.8 Demand Response and Innovative Rate Research

5.8.1 Program Description Demand Response and Innovative Rate Research Program, a new initiative, supports participation of small customers in the NYISO’s wholesale demand response and time-sensitive retail electric pilots. Residential and small commercial loads constitute a small percentage of participants in these programs because of their relatively small loads, the high cost of aggregation, and the lack of flexible metering options and other load control technologies. The Program promotes the development, demonstration, and use of end-use technologies that have flexible load capabilities. Flexible load technologies are end-use devices, such as air conditioners and lighting, enhanced with features that allow remote access and group controls thereby allowing easier load reduction in response to peak demand and price signals. Additionally, the program’s time-sensitive pilots promote the development of innovative electric service rates by energy services companies with the ultimate goals of:

• Realizing load shifting and reductions during peak and expensive time periods,

• Creating cost avoidance opportunities for customers, and

• Creating sustainable businesses for providers. The Program concentrates on the New York City metropolitan area where capacity is particularly constrained and load reductions are most desirable. The program budget is $10 million.

An R&D initiative begun in 2000, Enabling Technology for Price-Sensitive Load Management (ET), was a precursor to this new R&D Program, Demand Response and Innovative Research. ET, a series of projects in the Next Generation Program has ended; however, energy savings are still being realized from its projects. ET sought projects that demonstrated advanced technologies and commercialized new


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methods of aggregating load. The advanced technologies enabled electricity load reduction in response to emergency and market-based signals.



Table 5-16. Demand Response and Innovative Rate Research Program Goals achieved from July 1, 2006 through December 31, 2007

Activity


through June 30, 2011


% of Goal Achieved

Increase small customer participation in wholesale and local demand response programs (MW)

100 MW

One MW enabled.

In this first year, the Program is still ramping up to meet long term goals of demonstrating enabling load shed technologies. Demonstration of an advanced, remotely activated load shed ballast was completed at the Con Edison Rye facility. Additional demonstration projects have been funded at five different types of commercial or institutional buildings. The Association for Energy Affordability (AEA) conducted focus groups with Packaged Terminal Air Conditioning (PTAC) manufacturers to encourage incorporation of enabling controls for fleet management of PTAC units – a contributor to New York City peak load requirements. Innoventive Power demonstrated tools to identify demand response opportunities in schools and other building types.

1% of MW goal

Increase the number of multifamily apartment units participating in real-time and other time-sensitive electric rate pilots

3,000 apartment units

A feasibility study was initiated to compare various time-based rates (including Con Edison Rider M) in two all-electric multi-family developments (3,100 apartment units, 20MW peak demand) Initiated a demonstration of load management technologies and of time-of-use rate at Georgetown Mews (37 buildings, 930 apartment units, 2,000 KW peak load). Technologies include submetering, fleet-managed window air conditioning, energy information display and heating. The site will also pilot test a time-sensitive rate.

13% (with the 930 units

participating in the

demonstration)


This section presents cumulative annual energy savings for Enabling Technologies, the precursor to Demand Response and Innovative Rate Research. Table 5-17 presents cumulative annual net energy and demand savings for the program from inception through December 31, 2007. Realization rates are developed to account for differences in program reported savings and performance of actual installations. Attribution analysis determines, through various methods, whether the gross savings estimate should be

Electric Transportation

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further adjusted downward or upward for freeridership or spillover. Adjustments for realization rate, and the net-to-gross ratio (accounting for freeridership and spillover) are also shown in the table.

Table 5-17. Demand Response and Innovative Rate Research Program Cumulative Annual Energy and Peak Demand Savings (Through December 2007)


Realiza-tion Rate

Adjusted Gross

Savings

Net-to-Gross Ratio Net Savings

MW 208.3 0.50 104.2 0.95 99.0

5.9 Electric Transportation


Analysis has shown that development, qualification, and deployment of advanced technologies for the electrified rail system could reduce peak load by as much as 100 MW in the highly constrained New York City T&D load pocket. New York’s electrified commuter rail and subway system alone uses over two billion kWh a year and represents a 1,100 MW demand on the Con Edison distribution system.11

The Program will fund projects in all stages of technology advancement and higher risk projects will be funded in phases. Successful completion of milestones will be required before beginning the next phase. Two competitive solicitations are anticipated. The first will target improving energy efficiency in the State’s current electrified transportation infrastructure. This solicitation will be administered in collaboration with the New York City Metropolitan Transit Authority and the New York Power Authority. Activities will target conductor rails, regenerative braking systems, and propulsion efficiency. The second will target improving energy efficiency through the use of off-peak power in the transportation sector. This solicitation will target electrified anti-idling, plug-in hybrid vehicles, and reduced on-peak demand associated with producing and fueling alternative fuel vehicles.

The Program supports emerging technologies from inception through field testing and pre-commercial deployment. Once a product is commercialized and has reliably demonstrated energy benefits, continued support is frequently available through deployment programs and from State and federal tax allowances. Helping to develop products that will make this transition is a fundamental goal of the Program.

The ultimate goals of the program are:

• Improve the energy efficiency of the New York’s current electrically powered commuter rail and subway system in the New York City load pocket.

• Reduce costs of power transmission by allowing unused off-peak capacity to generate revenue and reduce transportation petroleum use, greenhouse gases, and criteria emissions.

The benefits of the electric transportation program will include peak load reduction in the New York City load pocket and permanent energy use reductions. These reductions will result in cost savings to the

11 The subway system pays an SBC fee as do the private sector suppliers.


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subway and commuter rail systems and lessen transmission congestion in the region. Additionally, many projects are expected to reduce transportation costs and emissions from petroleum fueled vehicles. The Program budget is $5.0 million.


Table 5-18 shows the Program’s performance over the most recent 18 months on several key output indicators.

Table 5-18. Electric Transportation Program Goals achieved from July 1, 2006 through December 31, 2007

Activity Achievements from July 1, 2006 through December 31, 2007

Solicitations released 3

Proposals reviewed 19

Projects funded 12 approved; 6 contracted

Funding $2.3 million approved; $0.8 million contracted

Co-funding $5.3 million approved; $1.1 million contracted

Prior SBC-funded projects focused on improving the State’s energy efficiency through the use of off-peak power to reduce the use of petroleum-based transportation fuels. The Electric Station Car Project leased small neighborhood electric cars to the public and provided charging stations in reserved parking slots at commuter rail stations. Demand for the vehicles exceeded supply by nearly three-to-one. Thousands of gallons of gasoline consumption were replaced by off-peak power.

A second successful project, the Truck Stop Electrification Project, developed infrastructure technology, sponsored initial demonstrations and created a New York-based business that allows long haul trucks to eliminate sleeper cab engine idling during mandatory rest periods. Systems developed for the program are currently being sold nationally and are eligible for State and federal incentives.

Recent accomplishments include:

• Issued three solicitations and selected 12 projects for funding. Several promising opportunities were identified, including field testing of trackside energy storage to capture braking energy from subway cars.

• A demonstration of the third-rail heater controls was completed with outstanding results. If the controls are implemented throughout the New York City (NYC) transit system, the technology would save over 32,000 MWh of electricity per year, or over $1.5 million in annual savings. An equal amount would be saved by implementing the automated switch heaters, which were also demonstrated in the project. The developer is RailComm, located in Fairport, NY. The New York Power Authority (NYPA) and the Metropolitan Transit Authority (MTA) are reviewing a plan whereby NYPA finances the equipment and MTA makes repayments from the energy savings.

Environmental Monitoring, Evaluation, and Protection

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• Working on a collaborative with MTA and NYC to address electric transportation efficiency improvements.

5.10 Environmental Monitoring, Evaluation, and Protection

5.10.1 Program Description The EMEP Program commenced in the late 1990s in an effort to increase understanding of the environmental impacts of electricity production. EMEP initiatives are building on past efforts and evolving to support research in five primary areas:

• Ecosystem response to deposition of sulfur, nitrogen, and mercury, including continued support of the Adirondack Lakes Water Quality monitoring program with the Adirondack Lakes Survey Corporation and the NYS Department of Environmental Conservation.

• Health and energy-related research on air quality, particulate matter, ozone, and co-pollutants to support continued development of sound air quality management plans for attainment of new ozone and fine particle standards.

• Regional climate change research, including impacts of climate change on New York, and mitigation and adaptation options for the State.

• Environmental impacts of alternative energy resources, including effects of wind turbines and tidal-energy production on wildlife.

• Crosscutting environmental science, technology, and policy projects, such as mitigating environmental impacts of electricity generation critical for fuel diversity.

The program is guided by a steering committee comprised of major stakeholder groups. In addition a separate science advisory committee continues to provide technical review. The program has maintained a robust science and policy communication component to deliver program findings to policy-makers, scientists, and the public. As with previous efforts, NYSERDA is collaborating with regional and national entities to leverage funds for pertinent research projects. The 13-year budget is $39.1 million.

5.10.2 Recent Program Accomplishments

The recent program accomplishments are presented in Table 5-19. Overall, the Program is making good progress relative to the five-year goals.


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Table 5-19. Environmental Monitoring, Evaluation, and Protection Program Goals achieved from July 1, 2006 through December 31, 2007

Activity Program Goals (July 1, 2006 through June 30,

2011)


% of Goal Achieved

Develop detailed multi-year EMEP research plan with input from policymakers, scientists, and stakeholders

Complete EMEP research plan and update research plan as needed to ensure

relevancy

One planning meeting was held with the EMEP advisors, and three other major research planning meetings were held to assist in plan development. All of the attendees at the planning meetings were state or nationally recognized experts from the policy and scientific communities. NYSERDA contracted with the New York Academy of Sciences to assist in the development of the research plan, which was finalized and released in September.

N/A

Develop, contract, and manage research projects aimed at priority energy-related environmental research areas

Issue 6 to 10 solicitations

Contract 40 projects Leverage $20 million into New York, help build a knowledge-based research infrastructure in New York.

Six solicitations have been issued that included EMEP funding (focusing on sequestration, impacts of renewable energy, ecosystems, and air quality). Twelve projects have been contracted, leveraging $509,000 in outside co-funding.

60-100% of solicitation

goal 30% of

projects goal 3% of

leveraged funds goal

Sponsor workshops, conferences, and seminars

5 to 10 Co-sponsored a workshop on the creation of a soil-monitoring network in the Northeast. Hosted a seminar (and “Webinar”) for multiple agency staff on recent findings from the Intergovernmental Panel on Climate Change with IPCC member Dr. Cynthia Rosenzweig. Sponsored the Adirondack Research Consortium conference in Tupper lake. Co-sponsored a conference on climate change at MIT’s Endicott House. Hosted its two-day biennial conference on Linking Science and Policy at the Albany Marriott.

50-100%

Provide Web-based EMEP data and information

200,000 total customer visits, inquiries, and

downloads to the EMEP Website

Note: The EMEP Website tracking system is under reconstruction.

Publish NYSERDA research reports

40 Nine research reports and five executive summaries were published, including a study of options for the design of the emission allowance auction under the Regional Greenhouse Gas Initiative (RGGI)

23%

Environmental Monitoring, Evaluation, and Protection

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Activity Program Goals (July 1, 2006 through June 30,

2011)


% of Goal Achieved

Publish peer-reviewed journal articles

100 17 articles were published in the area of Air Quality/Health Effects, and 11 articles were published in the area of Ecosystems.

28%

Provide briefings to decision makers

15 Sponsored a meeting with policymakers concerning wind and wildlife. Briefed the new Department of Environmental Conservation (DEC) Climate Change Program Director on EMEP program activities. Arranged for a briefing to DEC staff on carbonaceous fine particle issues in New York and the region.

20%

Long-Term Program Accomplishments

Under SBC I and II, $21 million in NYSERDA funds were used to support 46 EMEP research projects and an additional $22 million in funding was leveraged. More than 125 peer-reviewed papers were published on EMEP findings and, as shown in Figure 5-10, EMEP research was cited 655 times in peer-reviewed journals. More than 80 organizations were involved in EMEP research projects, and EMEP fostered collaboration with scientists in 13 different countries to address New York environmental issues. Several advanced pollution measuring devices were developed and commercialized. A Web page was launched in 2005, which received an average of 19,00012 visits per month over the past year (up from 540 in its first month), and is routinely one of the top three NYSERDA Web pages. Most importantly, EMEP research was cited as providing the scientific basis for several important environmental policies in air quality and health advisories.

12 A new tracking system was installed that counts Web hits differently than the previous tracking system, which may be the reason why the Web visits number is relatively higher than previously reported.


5-46

Figure 5-10. Citations of Journal Articles from EMEP Projects

0

100

200

300

400

500

600

700

1999 2000 2001 2002 2003 2004 2005

Cumulative No. of Citations

Accomplishments of the EMEP since its inception have been documented as part of a peer review value/cost assessment conducted in 2006. Highlights from this assessment as well as others since then include:

• Environmental monitoring data from hundreds of field sites throughout New York have been collected to support program goals.

• Achievements in knowledge dissemination have been significant, with over 160 articles published in peer-reviewed journals.

• Researchers supported by EMEP have provided dozens of briefings to State and federal policymakers in a variety of forums including Congressional briefings/testimony, one-on-one briefings, and workshop and conference briefings.

• EMEP-sponsored research has affected energy-related policy at the State level, including:

6. the Acid Deposition Reduction Program,

7. the recent State mercury regulations for power plants,

8. and the New York State Department of Health fish consumption advisories for mercury, which now include advisories for all Adirondack and Catskill waters, for children and women of childbearing years.

• At the federal level, EMEP research has been cited in supporting documents for:

9. the U.S. EPA’s assessment of the Clean Air Interstate Rule,

10. the U.S. EPA’s review of the SO2 National Ambient Air Quality Standard,

Industrial Process & Product Innovation Program

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11. and provided scientific evidence used in the court decision to strike down the trading component of the Clean Air Mercury Rule, which could have produced biological mercury “hotspots.”

5.11 Industrial Process & Product Innovation Program


The Industrial Process & Product Innovation (IPPI) Program13 supports feasibility studies and technology demonstrations and commercialization that (1) improve energy productivity and competitiveness of New York manufacturers (minimize cost per unit output), (2) encourage capital investment and employment growth in New York facilities, (3) introduce New York-manufactured goods into new markets, and (4) encourage adoption of process changes that minimize waste. Cost-shared demonstration projects reduce risk and encourage manufacturers to adopt innovative and underused product and process alternatives. IPPI combines two Industry programs, Industrial Process and Productivity Improvement (IPPI) and Industrial Product Development, to better serve the industrial sector’s needs. IPPI is a collaborative effort of Industrial R&D and Energy Efficiency Services.

The five year program budget is $10 million.


Several goals have been set for the Industrial Process & Product Innovation Program. These goals and progress for the first 18 months ending December 31, 2007 are shown in Table 5-20.

13 This Program was formerly known as the Industrial Research, Development and Demonstration Program.


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Table 5-20. Industrial Process & Product Innovation Program – Near-Term Goals and Achievements



Achieved from July 1, 2006 through December 31, 2007

% of Goal Achieved

Issue annual solicitations Fund 30 to 40 cost-shared demonstrations

PON 998 was issued with two rounds of due dates (June 8, and October 5, 2006), with total funding of $4 million. Projects selected to receive SBC funding: Round One: 6 Round Two: 5 PON 1130 was issued with three rounds of due dates (March 28, July 16, and November 8, 2007), with total funding exceeding $5.7 million. Projects selected to receive SBC funding: Round One: 3 Round Two: 5 Round Three: 5 PON 1190 was issued in November ’07 with three rounds of due dates (March 5, July 2, and November 5, 2008) with total funding of $5.5 million.

60-80%

Technology transfer

Conduct technology transfer and outreach activities to broaden the acceptance of successful technologies and technical approaches via participation in at least two workshops. Publish final reports as projects are completed..

This is an on-going activity that usually takes place near the end of a project, which hasn’t happened yet for this relatively new program..

N/A

Program metrics

Industrial Process and Productivity Improvement (IPPI) projects supported during the SBC III period are expected to result in cumulative energy savings of $5 million, and project-related incremental sales of $10 million.

Projects are being contracted with requirements for documentation of performance metrics. Projects have not yet been completed; therefore, metrics cannot be ascertained at this time.

N/A


Over the past ten years NYSERDA Industrial Process and Productivity Improvement Program averaged $1.75 million in annual funding, and resulted in cumulative energy savings of almost $20 million, non-energy benefits in excess of $21 million, project-related incremental sales of almost $40 million, and approximately 85 new jobs. This program combined statutory R&D funds and EES federal funds. This program has been funded with SBC funding for only two years – prior funding was completely statutory.

This section highlights key program outputs and market progress. All values reported are cumulative since program inception. Table 5-21 presents the key outputs for IPPI and Industrial Product Development (IRDD predecessor) through December 31, 2007. In addition to the key outputs, several long-term success indicators also will be tracked, including: energy, demand and fossil fuel savings, cost savings from productivity improvements, processes developed, and processes deployed.

Municipal Water and Wastewater Efficiency

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Table 5-21. Industrial Process & Product Innovation Program – Key Program Outputs

Outputs

Goal through 2011

Value (Cumulative through

December 2006)

Value (Cumulative through

December 2007)

Number of Solicitations completed

5 PONs, 14 due dates 1 PON, 2 due dates 2 PONs, 5 due dates

Number of proposals reviewed/Recommended for SBC funding

300/40 40/11 104/24

Number of signed contracts 40 4a 8b

SBC Funds Encumbered (Signed contracts)

$10,000,000 $574,251 $1,938,251

Co-funding by Project Participants (For Signed contracts)

$20,000,000 $912,505 $3,962,641

SBC Funds Committed $10,000,000 $1,513,547 $3,962,641

New products developed - - -

Energy Savings from Demonstration Projects

- - -

a Four projects were terminated prior to contract signing and three contracts are not yet completed or signed. b Four projects were terminated prior to contract signing and 12 contracts are not yet completed or signed.

5.12 Municipal Water and Wastewater Efficiency


Since 2000, NYSERDA’s Municipal Water and Wastewater Initiative has supported projects that accelerate the use of energy-efficient and innovative technologies by municipal water and wastewater treatment systems in New York through demonstrations, feasibility studies, and technology transfer. Approximately 2.5 to 3 billion kWhs are consumed every year by municipal water and wastewater treatment plants in New York. On average, the sector consumes 35% of a typical municipality’s energy budget.

There are currently 16 SBC-funded water and wastewater projects, derived from eight solicitations that were developed jointly by NYSERDA’s R&D and EES staffs. Five of the eight solicitations were PONs that solicited proposals to demonstrate and evaluate innovative or underused energy-efficient water and wastewater technologies. The sixth was an RFP that solicited proposals to demonstrate real-time monitoring of energy and environmental performance at wastewater treatment plants, with the goal of attracting the energy service sector to the municipal wastewater market. The seventh was an RFP that solicited proposals to benchmark energy use and evaluate the potential for energy efficiency and energy production improvements in the sector. The eighth was a PON to establish the Energy Smart Focus on municipal water and wastewater. A technology transfer project, derived outside of the eight solicitations, is helping to increase the use of a specific energy-efficient filtration technology by providing technical assistance for up to 10 wastewater treatment plants. Technology transfer and outreach were significant components of all of these projects. In addition, the Technical Assistance (TA) Program has served


5-50

municipal water/wastewater customers since 1997, including 70 site-specific analyses, and the municipal water and wastewater treatment sector has been integrated into the Enhanced Commercial/Industrial Performance program. Going forward, the Municipal Water and Wastewater Efficiency Program will continue to focus on providing municipalities with information, resources, and services to increase the standard of energy efficiency in the sector, and will continue to be a collaborative effort between NYSERDA’s R&D and EES staffs. To that end, the program will continue to support cost-shared demonstration projects to reduce risk and encourage adoption of innovative or underused energy-efficient technologies and practices. Technical assistance will continue to be emphasized for municipalities seeking to upgrade or improve the energy efficiency of their equipment and operations. Energy efficiency incentives will continue to be offered to move the market toward increasing demand for more efficient equipment. Technology transfer and outreach will continue to be key components of the program, to encourage the adoption of innovative and energy-efficient technologies and practices. Additionally, energy management training will be developed and offered for treatment plant operators, municipal decision makers, consultants, and product vendors.


The Program goals and progress since July 1, 2006 are shown in Table 5-22.

Table 5-22. Municipal Water and Wastewater Efficiency Program Goals achieved from July 1, 2006 through December 31, 2007

Activity

Program Goals (July 1, 2006 through June

30, 2011)

Achievements from July 1, 2006 through December 31, 2007

% of Goal Achieved

Issue annual solicitation

Select and fund 25 or more projects. Provide

assistance to a minimum of 25

municipal wastewater and water treatment

facilities.

PON 1040 was issued and 17 proposals were received requesting $3.9 million in NYSERDA funding. In total, five proposals were recommended for funding; two using SBC funds. PON 1171 has been approved and will be issued in early February 2008.

20%

Municipal Water and Wastewater Efficiency

5-51

Activity

Program Goals (July 1, 2006 through June

30, 2011)

Achievements from July 1, 2006 through December 31, 2007

% of Goal Achieved

Technology transfer

Provide critical information on

ways to optimize energy use at

municipal wastewater and water treatment

facilities. Provide

information to 1,000 treatment facilities in New

York.

NYSERDA co-developed and sponsored an energy management training conference for the sector with EPRI and the New York Water Environment Association (NYWEA). Approximately 70 individuals (municipal operators and elected officials, consultants, engineers) attended the two-day session held in Cooperstown in November 2006. In September 2006 four energy management presentations were given at NYS Co-funding for Water and Sewer Infrastructure conferences. An additional four presentations were given in September 2007. The total yearly attendance for these conferences was on the order of 300-400 individuals. In September 2006 an energy management presentation was given as part of a Webcast hosted by the Comptroller’s Office. By summer 2007, the submetering and evaluation of 20 wastewater treatment plants had been completed. The final reports and summaries of findings have been posted online. In Fall 2007 NYSERDA developed an Energy Management issue of Clearwaters (published by NYWEA). NYWEA is the NYS chapter of the nation’s premier professional organization for the wastewater treatment profession (Water Environment Federation). The Energy Management issue will be published in spring 2008. In a related sector-based EES program described elsewhere in this Report, the Energy Smart Focus solicitation was developed to provide sectors with customized services and strategies in support of energy efficiency. A Contractor was selected via competitive process to serve as the “Focus Contractor” and programs which include training, technical materials, and outreach materials are under development for the sector.

Energy and cost savings

$2-3 million per year See Section 5.12.4.

Technical Assistance

Develop, review and approve 30

projects

Five new Technical Assistance (TA) projects were approved to begin work totaling $112K in NYSERDA funds. Five TA projects, representing $63K in NYSERDA funds, were completed.

33%


As of December 2007, $3.2 million has been committed under the targeted water and wastewater initiative. An additional $1.2 million has been awarded for municipal water/wastewater projects under the TA Program. Table 5-23 summarizes the funding status of the programs.


5-52

Table 5-23. Project and Funding Status through December 2007

Proposals Received

Number of

Projects

Number of Sites

Approved

Funds Awarded ($ million)

Co-funding ($ million)

RFP 769 Energy Efficiency Improvements at Water & Wastewater Treatment Plants

10 1 n/a $0.13 $0.05

RFP 601 (Submetering)1 17 2 20 $1.1 $0.4

Demonstration Projects (569, 786, 857, 935 and 1040)

99 12 12 $1.86 $2.4

Technical Assistance 2 79a 75 71 $1.2 $1.2

Technology Transfer 1 1 3 $0.1 $0.1 1 Funded in part under the general Technical Assistance Program. 2 Funded under the general Technical Assistance Program. a Number of viable projects.


Energy Savings

On average, these projects take five to seven years from conception to implementation. However, once implementation is complete, the projects should lead to nearly 42,919 MWh of electricity savings and 14,774 kW of peak demand reduction. Depending on the effectiveness of information dissemination from knowledge created, the potential exists for substantial MWh savings and demand reductions due to replication across the broader New York municipal water/wastewater market sector.

5.13 Next Generation and Emerging Technologies

5.13.1 Program Description The Next Generation and Emerging Technologies program emphasizes discrete and integrated end-use technologies for buildings, daylighting applications, solar thermal applications, and emerging technologies for industry and buildings not covered elsewhere in NYSERDA’s portfolio of New York Energy $martSM programs. The bulk of funds will be administered through narrowly defined competitive solicitations. Potential focus areas include:

• Advanced Building Products Program that concentrates on residential one- to four-family units. The advanced building demonstration element addresses the whole building – striving to reach a 92 or greater HERS rating (qualifying ENERGY STAR homes start at a HERS rating of 84). The discrete building technologies element targets development and demonstration of distinct technologies, e.g., energy systems (production and recovery), heating and cooling, air quality, etc.

• Emerging technologies to support development and demonstration of discrete technologies that improve electric end-use efficiency.

• Daylighting applications to support demonstration and provide technical assistance to advance daylight applications in commercial buildings.

Next Generation and Emerging Technologies

5-53

• Solar thermal applications to support demonstration and provide technical assistance to advance economical collection and use of solar thermal energy.

• Lighting incubator program activities that develop and commercialize advanced lighting technologies.

• Power quality, energy management, controls and sensors activities that promote development of technologies that enable customers to monitor and control energy use and power quality.

The Program emphasis is on funding developers and producers of energy-efficient technology that would be commercially available to end users. Demonstration solicitations are open to all end-use customers, particularly those with high electric loads. For example, advanced building demonstrations will focus exclusively on residential homes of one-to-four family units.

Past solicitations have addressed transportation, sensors, energy efficiency, superconductivity, power quality, energy management, and time sensitive pricing.



Table 5-24 shows the Program’s five-year goals and performance over the most recent 18 months. The Program is performing well with respect to these goals. Additionally, two solicitations are under development for the Advanced Building Program. They are PON 1096 High Performance Residential Development Challenge (funded at $1.5 million) and PON 1126 Next Generation Emerging Technologies for Residential Buildings (funded at $2.5 million).


5-54

Table 5-24. Next Generation and Emerging Technologies Program – Long-Term Goals and Achievements

Activity




Advanced Building Program

Two solicitations Two or more demonstration test beds

Four solicitations completed. Eleven projects contracted (six product development/five demonstrations). RFP 1032 Reference Design Guidebook: This project (1) identified incremental measures needed to raise energy performance of new residential construction. Final report submitted in October. PON 1062 Advanced Building Envelopes and Energy Systems: These projects (2) are monitoring/demonstrating advanced building systems that substantially reduce central air conditioning loads. PON 1126 Next Generation Technologies for Residential Buildings: Two rounds are complete, five projects are underway from the first round, two contracts are still under negotiation. Under round two, five projects were selected with requested funding of $779,000. These projects will develop/demonstrate technology to reduce AC loads, on-site power production, design strategies for reduced load and other energy efficient technology development. PON 1096 Demonstration of High Performance Residential Homes: Initiated four teams that will design, build and demonstrate up to 20 high-performance residential homes demonstrating tight envelopes via improved on-site construction practices.

200% of goal for solicitations issued


5-55

Activity




Daylighting Applications

50-100 design assistance projects Five daylighting implementations in buildings

Two clients have received daylighting design assistance services. Four additional projects that facilitate design assistance are underway. One daylighting implementation project is underway. PON 1079 Daylight Technical Services, Training and Demonstrations: All five contracts have been signed; work is underway. RFP 1068 Establishment of a Lighting Incubator Center to Support Lighting Start-up Companies in New York: Initiated Lighting Green House incubator (located at STEP) to identify and advance commercialization of lighting-related intellectual property created in NYS technical institutions and by entrepreneurs. PON 1122 Innovation in Lighting: New Products, Demonstrations, and Testing: four contracts have been signed; one is in negotiation.

Solar Thermal Applications

Two solicitations Five demonstrations

One solicitation is completed. Five projects contracted (four out of five are demonstrations). PON 1085 – Solar Thermal Demonstrations: five signed contracts, four in negotiation. eight of the nine projects are demonstrations. These demonstrations are focusing on combinations of solar thermal collectors, radiant floor heating systems and storage.

50% of goal for solicitations issued 100% + of goal for demonstration projects contracted


5-56

Activity




Emerging Technologies

Five solicitations 25 product development projects

Two rounds completed under one solicitation. Fifteen product development projects underway. PON 1105 Next Generation Emerging Technologies: Under Round One, five contracts are signed, and four contracts are in negotiation. Under Round Two, one contract is signed, and 11 contracts are in negotiation. This program has funded a wide variety of product development and demonstration of end-use technologies including thermo-photovoltaic applications, micro-CHP, solid cooper rotor electric motors, high-efficiency bill board displays, solar thermal air conditioning.

40% of goal for solicitations issued


Program Portfolio

Since its inception in September 1998, the program has funded projects totaling nearly $35 million. Projects were categorized into the following project types:

1. Research/Support Studies: include studies that analyze market potential, technological feasibility, and other studies designed to inform policy makers and supply-side market actors.

2. Product Development: projects that are focused on a clearly defined product and benefit New York manufacturers.

3. Demonstration: projects that demonstrate the performance of products that are commercially available.

4. Conference/Membership: projects support activities related to conferences and association membership.

The distribution of funding by project type is shown in Figure 5-11. Demonstration projects represent 50% of the funding, followed by Product Development with 21% of the funding. The distribution of funding by sector is shown in Figure 5-12 . The manufacturing sector has been awarded the most funding with 27%, followed by Colleges at 18% and Technical Service companies at 18%.


5-57

Figure 5-11. Distribution of Funding by Project Type

Project Funding by Type

Product Development

21%

Research & Support

19%

Conference / Workshop

10%

Demonstration50%

Figure 5-12. Next Generation and Emerging Technologies Funding by Sector

Encumbered Funds by Sector as of January 2008($34.7 Million)

Other11%

Services - Technical18%

Agriculture & Forestry

1%Commercial

6%

Colleges & Universities

18%

Health Care1%

Federal Government5%

Manufacturing27%

Local Government1%

Not for Profit9%

Energy Utilities & Producers

3%


5-58

Shown in Table 5-25 is a list of new products developed to date.

Table 5-25. Next Generation and Emerging Technologies New Product Development

Product Name Development Objective

Ultra-Low Power Oil-fired Burner Confirm fitness for full scale commercialization of the Ultra-Low Power system.

Voltage Sag Mitigation Device Evaluate performance characteristics of an energy-efficient, voltage sag mitigation technology.

T 9000

Development and evaluation of a wall mounted, wireless thermostat control system for baseboard electric heaters and room air conditioners.

Power-Line-Carrier Controlled Fluorescent Lighting

To develop an ultra-efficient, electronic, sub-miniature dimming ballast (SMDB) for fluorescent lighting in the power range of 13W to 32W and a high power electronic dimming ballast (HPEDB) in the power range of 60W to 200W; both with 10-year reliabilities and on/off/dimming control functions through the use of power line carrier controls.

Online Lighting Education Training

To develop and conduct on line educational seminars on energy efficient lighting systems for key lighting decision-makers in New York State.

Low electric power battery back up oil-fired heating system

Develop and laboratory test a self-powered, oil-fired, heating system for residential and small commercial buildings.

Hybrid Skylighting System

To design, evaluate and demonstrate a hybrid skylighting system combining a skylight with a photosensor to moderate electric light use.

HID Wallpack & Floodlight

To develop, manufacture and market high quality, affordable high intensity discharge (HID) wallpack and floodlight fixtures.

Revolutionary Power Cell Design and develop a hybrid system including a high power density battery integrated with the contractor's high energy density power cell, and demonstrate it in a small electric vehicle.

A-1

Appendix A: Benefit/Cost Analysis Inputs

Table A-1. Avoided Electric Energy and Capacity Cost Forecast

Energy Costs

(2007 Cents/kWh) Capacity Costs

(2007 $/kW-Year)

Year Upstate Downstate Blended1 Upstate Downstate Blended1

2003 5.58 7.35 6.24 15.68 76.24 38.09

2004 5.49 7.07 6.07 15.68 76.24 38.09

2005 7.81 10.29 8.72 10.77 73.16 33.86

2006 5.94 7.68 6.58 23.24 74.40 42.17

2007 6.33 8.04 6.96 29.71 75.38 46.61

2008 6.69 8.68 7.43 29.71 75.38 46.61

2009 6.17 8.01 6.85 29.71 75.38 46.61

2010 5.85 7.59 6.50 29.71 75.38 46.61

2011 5.81 7.55 6.46 29.71 75.38 46.61

2012 5.79 7.51 6.42 29.71 75.38 46.61

2013 5.79 7.51 6.42 29.71 75.38 46.61

2014 5.89 7.65 6.54 29.71 75.38 46.61

2015 6.03 7.83 6.70 29.71 75.38 46.61

2016 6.17 8.00 6.85 29.71 75.38 46.61

2017 6.28 8.15 6.97 29.71 75.38 46.61

2018 6.36 8.25 7.06 29.71 75.38 46.61

2019 6.40 8.30 7.10 29.71 75.38 46.61

2020 6.41 8.31 7.11 29.71 75.38 46.61

2021 6.37 8.26 7.07 29.71 75.38 46.61

2022 6.32 8.19 7.01 29.71 75.38 46.61

2023 6.26 8.12 6.95 29.71 75.38 46.61 1 Blend reflects 63% Upstate and 37% Downstate. Note: Electric energy prices for 2003 to 2007 reflect load-weighted hourly day-ahead NYISO clearing prices in each of those years. Forecasted prices (2008 to 2023) reflect the pattern of prices in the Henry Hub natural gas price forecast developed by Energy and Environmental Analysis, Inc., November, 21, 2007. Capacity prices for 2004 to 2007 were calculated from capacity auction clearing prices in each of those years; 2003 capacity prices were set to equal 2004 capacity prices. Future capacity prices were set to equal 2007 prices. The "upstate" capacity price is a weighted clearing price from all zones except "J" & "K" for all auctions. The "downstate" capacity price is a weighted average of the New York City Total Cost and the "Upstate" prices applicable to zones "H" and "I".

Appendix A

A-2

Table A-2. Natural Gas Wholesale Price Forecast

Natural Gas Wholesale Price

(2007 $/MMBtu)

Year Upstate Downstate Blended1

2003 7.69 7.16 7.49

2004 6.89 7.32 7.05

2005 10.04 10.47 10.19

2006 7.50 7.56 7.52

2007 7.74 8.41 7.99

2008 8.45 9.41 8.81

2009 7.61 8.05 7.78

2010 6.97 7.47 7.15

2011 6.88 7.31 7.04

2012 6.90 7.28 7.04

2013 6.90 7.35 7.07

2014 7.07 7.50 7.23

2015 7.30 7.65 7.43

2016 7.50 7.85 7.63

2017 7.60 7.95 7.73

2018 7.75 8.05 7.86

2019 7.85 8.15 7.96

2020 7.90 8.18 8.00

2021 7.85 8.15 7.96

2022 7.75 8.10 7.88

2023 7.70 8.00 7.81

2024 7.65 7.95 7.76

2025 7.65 7.90 7.74

2026 7.60 7.90 7.71

2027 7.60 7.90 7.71 1 Blend reflects 63% Upstate and 37% Downstate. Source: Energy and Environmental Analysis, Inc., November 21, 2007.

Appendix A: Benefit/Cost Analysis Inputs

A-3

Table A-3. Retail Electricity Price Forecast

Upstate Retail Electricty Price1

(2007 $/kWh) Downstate Retail Electricity Price1

(2007 $/kWh)

Blended2

(2007 $/kWh)

Year Residential Commercial Indus-trial

Residen-tial

Commer-cial

Indus-trial

2003 0.107 0.146 0.097 0.189 0.235 0.165 0.155

2004 0.107 0.149 0.096 0.193 0.241 0.170 0.158

2005 0.110 0.142 0.102 0.192 0.245 0.154 0.156

2006 0.117 0.150 0.110 0.228 0.270 0.169 0.169

2007 0.122 0.154 0.107 0.212 0.269 0.139 0.166

2008 0.114 0.147 0.105 0.206 0.256 0.157 0.162

2009 0.112 0.148 0.102 0.203 0.252 0.159 0.161

2010 0.111 0.149 0.101 0.201 0.249 0.161 0.160

2011 0.111 0.149 0.101 0.200 0.249 0.161 0.160

2012 0.111 0.149 0.101 0.200 0.249 0.161 0.160

2013 0.111 0.149 0.101 0.200 0.249 0.161 0.160

2014 0.112 0.149 0.101 0.201 0.250 0.161 0.160

2015 0.112 0.148 0.102 0.202 0.251 0.160 0.161

2016 0.112 0.148 0.102 0.203 0.252 0.160 0.161

2017 0.113 0.148 0.103 0.203 0.252 0.159 0.161

2018 0.113 0.148 0.103 0.204 0.253 0.159 0.161

2019 0.113 0.148 0.103 0.204 0.253 0.158 0.161

2020 0.113 0.148 0.103 0.204 0.253 0.158 0.161

2021 0.113 0.148 0.103 0.204 0.253 0.159 0.161

2022 0.113 0.148 0.103 0.203 0.253 0.159 0.161

2023 0.113 0.148 0.103 0.203 0.252 0.159 0.161 1 Retail prices based on typical bills for residential customers with 750 kWh of annual use, commercial customers with 9,000 kWh of annual use, and industrial customers with 720,000 kWh of annual use. Price per kWh was calculated by dividing the variable cost portion of the bill (i.e., total bill minus fixed charges) by the kWh usage. 2 Blend reflects 63% Upstate and 37% Downstate; 15% Residential, 54% Commercial, and 31% Industrial. Source: http://www.dps.state.ny.us

Appendix A

A-4

Table A-4. Natural Gas Retail Price Forecast

Natural Gas Retail Price (2007 $/MMBtu)

Year Residential Commercial Industrial Blended1

2003 12.42 9.22 7.88 10.74

2004 13.41 10.85 8.64 11.93

2005 15.32 13.23 10.15 13.95

2006 15.83 12.04 10.66 13.87

2007 14.29 11.48 9.37 12.70

2008 14.88 12.16 9.96 13.33

2009 14.24 11.42 9.32 12.65

2010 13.85 10.97 8.93 12.24

2011 13.81 10.92 8.89 12.19

2012 13.77 10.88 8.85 12.16

2013 13.77 10.88 8.85 12.16

2014 13.90 11.03 8.98 12.29

2015 14.07 11.23 9.15 12.47

2016 14.24 11.42 9.32 12.65

2017 14.37 11.57 9.45 12.79

2018 14.47 11.68 9.55 12.89

2019 14.52 11.74 9.60 12.94

2020 14.53 11.75 9.61 12.95

2021 14.48 11.70 9.56 12.90

2022 14.42 11.63 9.50 12.84

2023 14.35 11.55 9.43 12.77

2024 14.32 11.51 9.40 12.73

2025 14.32 11.51 9.40 12.73

2026 14.32 11.51 9.40 12.73

2027 14.32 11.51 9.40 12.73 1 Blend reflects 63% Upstate and 37% Downstate; 15% Residential, 54% Commercial, and 31% Industrial. Source: Natural Gas Retail Price Forecast, NYSERDA, January 2008.

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