Energy Efficiency: Why Does It Matter?November 15, 2011

TVPPA Customer Service & Communications Conference

Goal to be Southeast Leader

Cleaner Air

Reduces air

emissions

ReliableElectricity

Low Bills

Reduce customer bills

EconomicDevelopment

Greater reliability

More flexibility

Why Greater Energy Efficiency?

3

Economic engine for the

Valley

Creates thousands of

jobs

Balanced Energy

Strategy

Consistent with

Integrated Resource

Plan

Part of a diverse mix of energy

generation sources

4

Heat Pump Program

10,011 installations

In-Home Energy Evaluations

Over 25,000 since program inception,April 2009

145 Participating Power Distributors

EnergyRight Solutions for Business

121 GWh and 18.6 MW saved

908 projects

Major Industrial Program(> 5 MW)

133 GWh and 14.3 MW saved

38 projects

EnerNOC

104 participating Power Distributors

725 customer sites with 222.9 MW nominated load

Generation Partners

55.82 GWh

Self AuditNew record set in August with 5,827

participants

Exceeded goal, with 35,591 audits

60.64 GWh saved

559 GWh Achieved373 MW Reduction

FY11 Program Highlights

5

FY 2010 Achievements

FY 2011 Achievements

210

559

Progress Towards Cumulative Energy Savings (GWh)

5

FY 2012 FY 2013 FY 2014

769 550

1,319 667

1,986871

2,857

1,301

FY 2015

4,158

Achievements equivalent to a 100 MW power

plant

Impacts at the end-user meter; do not include degradations for equipment lifespan

------------------------- Forecast -------------------------

EnergyRight® Solutions Framework

Programs

EnergyRight® Solutions

Education Resources

6

• Homes

• Business

• Industry

• Demand Response

• For Homes

• For Kids

• For Business

• Renewable Energy Power Purchase Agreements

• Standard Offer

• Green Power Providers (formerly Generation Partners)

• TVA Owned Renewable Resources

• Solar Solutions Initiative

EnergyRight® Solutions Programs and Features

Home

EnergyRight® Solutions

Business

Business

Existing Homes Program

Existing (Retrofit) Program

Existing (Retrofit) Program

End-Use Products

New Homes Program

New Construction

Program

New Construction

Program

Distribution-level Products

Market Transformation

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Programs

Demand Response

Industry 0

1

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

5 45 125

205

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405

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525

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645

725

805

845

925

1005

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1125

1205

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1325

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1525

1605

1645

1725

1805

1845

1925

2005

2045

2125

2205

2245

2325

Core Metals 8/3/11

Baseline Period Call Period Load Baseline Avg Protected

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EnergyRight® Solutions for the HomePrograms and Features

Weatherization Incentives

ENERGY STAR Air Conditioning (develop and launch in FY12)

ENERGY STAR Heat Pumps

eScore

Existing Homes New Homes

EnergyRight® Homes

EnergyRight® Platinum and Platinum Certified Homes

EnergyRight ® Solutions for

the Home

Programs

Market Transformation

Self Audit

Weatherization Assistance Program (TN)

Manufactured Homes

ENERGY STAR Manufactured Homes

Retail Lighting (develop and launch in FY12)

Indicates existing feature

Featu

res

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eScore Development and Design

Benchmark

eScore Draft

WorkshopsFocus

Groups

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eScore Development and Design

Benchmark WorkshopsFocus

Groups

eScore helps residential customers save money on

energy bills by making their homes more energy

efficient.  It consists of:

• Audit

• Starting eScore

• Suggested upgrades

• Rebates and incentives

• Savings estimates

• A simple, engaging path

• Direct install

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eScore – Front Page MPG type cost comparison

Based on energy efficient upgrade suggestions to be

completed

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eScore – Back Page

The first three

steps of the path to a 10

Return on Investment, kWh

and $ savings

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Status eScore

Urban: Knoxville (3)Nashville (2)Memphis (3)

End-Customer Focus Group

Input

Market and Software

Development(Discussion with

power distributors)

eScore Online Version Pilot

2011 2012June July Aug Sept Oct Nov Dec Jan Feb

Rural:Kentucky (2)Georgia (2)

EnergyRight® Solutions for the HomeExisting and New Home Program Features

Weatherization Incentives

Provides rebates and incentives for air sealing and insulation, ventilation, duct repair, HVAC improvements, and replacement windows

ENERGY STAR Air Conditioning

Promotes the installation of ENERGY STAR Central A/C in homes by offering rebates (customers and contractors must meet EnergyRight®) standards

ENERGY STAR Heat Pump

Promotes the installation of ENERGY STAR heat pumps by offering rebates (must meet EnergyRight® installation standards)

eScore

Assesses the energy efficiency of an existing home and provides the homeowner with feedback pre- and post-audit for energy efficiency modifications or improvements; will have online and in-home audit versions

EnergyRight®

Homes (New)

Offers incentives to distributors for building energy efficient homes in the Tennessee Valley to a standard that is better than code using a Home Energy Rating System (HERS) or a prescriptive standard

EnergyRight®

Platinum and Platinum Certified

Homes (New)

Offers incentives to distributors for building energy efficient homes in the Tennessee Valley that are rated or use the ENERGY STAR prescriptive standard (there are two options for the certified level)

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EnergyRight® Solutions for the HomeMarket Transformation Program Features

Self AuditOn-line and paper do-it-yourself tool that provides customers with a personalized annual and monthly energy usage report, energy savings recommendations, and an energy-savings kit

Weatherization Assistance

Program (TN)

A state supported diagnostic in-home energy assessment for the low income sector that provides home energy efficiency and health/safety improvements at no cost to the customer

ENERGY STAR Manufactured

Homes

Promotes (through wholesaler incentives) the installation of 13 SEER heat pumps in qualified manufactured homes (new homes and homes up to 10 year old)

Retail Lighting

Utilizes a contractor and the Systems Building Research Alliance (SBRA) to influence manufacturers to build ENERGYSTAR homes at the factory

Manufactured Homes

Appliance Recycling

Encourages (through customer incentives) the removal and disassembly of existing second refrigerator (typically when consumers purchase a new high efficiency unit)

Targets major retailers with incentives for selling CFLs (primary emphasis) and LED lighting through three channels: buy-down, mark-down, and coupons

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EnergyRight® Solutions for BusinessPrograms and Features

Better Energy Management (pilot in FY12)

Commissioning (develop FY12)

General Custom

Tailored Solutions

General Standard Rebate

Outdoor Lighting (develop and pilot in FY12)

Consulting

Existing (Retrofit)

EnergyRight ® Solutions for

Business

New Construction

Prescriptive New Construction (develop in FY12)

Indicates existing feature

Featu

res

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Success Story: Gaylord Opryland Hotel

The Gaylord Opryland Hotel & Resort flooded in May 2010 causing millions of dollars of damage. TVA stepped in to offer Fast Cash

Disaster Relief.

$147,000 incentive

596.65 kW demand reduction

1,888,660 kWh first year energy reduction

$200,000 estimated savings on customer’s annual utility bill

Major Chiller Replacement

“The TVA rebate program helps build a case for making the energy retrofit a priority! “

– Andy Mims (Gaylord Opryland Hotel & Resort)

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Success Story: Federal Express

Federal Express had a chiller that needed to be replaced due to the age of the equipment. Incentives from EnergyRight Solutions for

Business enabled them to purchase a higher efficiency unit.

$27,550 incentive

137.76 kW demand reduction

326,203 kWh first year energy reduction

$32,463 expected savings on customer’s annual utility bill

Replaced out of date Chiller

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EnergyRight® Solutions for IndustryPrograms and Features

Existing (Retrofit)

EnergyRight ® Solutions for

Industry

New Construction

New Construction (develop in FY12)

Indicates existing feature

Featu

res

Better Energy Management (pilot in FY12)

General Custom

Tailored Solutions

Standard Rebate

Consulting

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Success Story: CEMEX

CEMEX is a global building materials company that provides high quality products and reliable service to customers and communities throughout the Americas, Europe, Africa, the Middle East, and Asia.

Compressed Air System Replacement (2009)

“Energy efficient production was our goal, and TVA’s Major Industrial Program helped us make it a reality.”

– Antonio De Luca (Plant Manager, CEMEX, Knoxville, TN)

159 kW demand reduction

1,900,000 kWh annual energy reduction

$15,900 incentive

$93,500 annual energy savings

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EnergyRight® Solutions- Demand ResponsePrograms and Features

End-Use Products

Demand Response

Distribution-Level Products

0

1

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5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

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525

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725

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925

1005

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1125

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1405

1445

1525

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1725

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1925

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2205

2245

2325

Core Metals 8/3/11

Baseline Period Call Period Load Baseline Avg Protected

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Demand Response Customer Segments

End-Use ProductsResi-

dential

Small C&I

Medium C&I

Large C&I

Direct Served

Instantaneous Response

Reserve Preservation

3rd Party Demand Response

Commercial and Industrial Premise Management

Low-Impact Demand Response

Residential & Commercial Shift and Store

Smart Grid Pilot: Direct Load Control

Smart Grid Pilot: Critical Peak Pricing

Residential Premise Energy Management

Green Power Switch

Generation Partners

Distribution-Level Products

Smart Grid Pilot: Dynamic Voltage Regulation

Conservation Voltage Regulation

Distributor-Aggregated Demand Response

Current productsFuture products

0

1All DR Event 8/3/11

Baseline Period Call Period LoadBaseline Avg Protected

A Day In The Life of Demand Response – August 3, 2011

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Background

A Conservative Operations Alert was in effect due to high temperatures and a forecasted peak load of 31,800 MW

Energy Trading executed the Reserve Preservation product (potential increase in real time prices and transmission constraints impacting real time deliveries)

Results

Reserve Preservation 260 MW

EnerNOC 217 MW

Cycle ‘n Save 7 MW

SureGrid 1 MW

TOTAL DR Products 485 MW

▪ Actual performance better than protected load expectation (10 MW)

Baseline Average Load 1,100 MWActual Load 615 MWDemand Reduction 485 MW

Energy Reduction 1,838 MWh

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TVA SystemMW

31,740

31,660

31,580

31,500

31,420

31,340

31,260

31,180

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Walking the Talk: Greater Energy Efficiency in TVA Generation Facilities

TVA’s energy efficiency programs are

designed to meet the needs of every

sector in the Tennessee Valley,

including our own facilities

Annual audits at the facilities will be

done to show their energy savings.

Initial results indicate savings potential

and opportunities

Achieved 45 GWh of savings in 2011

EnergyRight® Solutions Framework

Programs

EnergyRight® Solutions

Education Resources

25

• Homes

• Business

• Industry

• Demand Response

• For Homes

• For Kids

• For Business

• Renewable Energy Power Purchase Agreements

• Standard Offer

• Green Power Providers (formerly Generation Partners)

• TVA Owned Renewable Resources

• Solar Solutions Initiative

26

Education and Outreach Highlights

National Theater for Children (K-12) - 377,402 students reached

2010-2011 was the third year for National Theatre for Children

Built on the programs from the previous two years and saw the addition of water conservation to the mix of four key messages stressed in each performance

“Energy Literacy Campaign,” also saw the development of a power distributor handbook that helps participating power distributors understand the campaign’s intent

Alliance to Save Energy’s Green Schools Program – 81 schools across the Valley participating

During the 2010–2011 school year, Memphis City Schools (MCS) approached the Alliance to Save Energy about the possibility of doing something with MCS that was both inclusive of all its schools and less expensive than the traditional program

The pilot will touch 105,000

At the end of September 2011, MCS had designated eight district level employees as projects leaders, train 165 teachers and trained all site-based building managers

Education and Outreach – Green Campus Initiative

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TVA issued an RFP to Valley institutions to participate in the Green Campus pilot to increase awareness of the importance of energy efficiency through a student-driven education program

Six schools were selected from the applicants: Calhoun Community College, the University of Alabama at Huntsville, the University of the South, Memphis University, the University of Mississippi, and Western Kentucky University

“Better Energy Management Programs” targets major universities, industrial corporations and other major enterprises in the Valley

Program helps these partners plan, develop, and implement continuous efficiency improvement based energy management practices for better energy performance of  their facilities

Currently TVA is piloting this approach with the University of Tennessee in Knoxville Kim Greene, TVA Group President,

addresses University of TennesseeStudents during a “Make Orange Green”

kick-off event promoting campus sustainability, September 22, 2011 in

Knoxville

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Energy Efficiency Forum – Preliminary OverviewFebruary 21-22, 2012, Gaylord Opryland HotelGoal

• Host a two day regional forum to help roll out TVA’s EEDR Five-Year Action Plan

• Create a strong base of awareness and interest in the Action Plan among TVA power distributors and other stakeholders in the region by focusing on Energy Efficiency and Demand Response as a real, viable resource in the Tennessee Valley

• Enhance TVA’s position as a leader in EEDR in the Southeast

Audience• TVA Executive Leadership• Power Distributors (board members, general managers,

and marketing managers)• Direct Serve Customers• State and Local Policymakers• Technical/Industry Allies

Speakers• National subject matter experts on EEDR• State and local policy leaders with demonstrated EEDR

success• Utility and program administrators with national best

practice EEDR initiatives

Five-Year Action Plan Design Criteria

Aligned with the TVA Integrated Resource Plan

Programs/portfolio are cost effective as measured against Total Resource Cost (net benefit to the Valley)

Program flexibility - one size/approach will not fit the needs of all 155 power distributors

Education and outreach are key to leveraging EEDR messaging and ultimately end-use customer participation

Simplicity in program design, execution, and reporting is important

Figure out ways to supplement some of the distributors’ costs to implement

Distributor and end user participation encouraged through tailored financial incentives

Multiple branding strategies must be developed - some programs/distributors want co-branding, others may want self-branding

Allow and count distributor-developed and delivered programs

Measureable results promote and demonstrate regional and industry leader in EEDR

Varying energy efficiency stakeholder goals acknowledged, e.g., productivity for industrials, less consumption for power distributors

Additional regional leadership attributes29

Programs & Outreach

Financial

Evaluation, Measurement & Verification

(EM&V)

Delivery Options

EEDR Five-Year Action Plan Elements

Primary Elements of the Five-Year Action Plan

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Five-Year Action Plan Development Overview

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Phase I Design and Document(May 2011– Sep. 2011)

Phase IIImplementation Plng.

(Oct. 2011 – Dec. 2011)

Design EEDR programs and define costs and impacts

Develop and communicate the business case

Define EEDR distributor delivery options

Design FY 2012 EEDR portfolio and finalize budget

Develop incentive options

Define program roll-out and performance measurement

approach and timing

Align EEDR communications with the Five-Year Action Plan

Initiate stakeholder outreach

Develop EEDR program implementation plans

Unwind current EEDR customer contracts and write new

contracts

Identify which programs and delivery options each power distributor and direct serve

customers will use

Continue to build-on EEDR communications

Continue stakeholder outreach

Phase IIIImplementation(Oct. 2011 and

Beyond) Enroll power distributors and

direct serve customers, i.e., programs and delivery options

Implement new customer contracts and incentive options

Implement EEDR programs and measure results

Continue stakeholder outreach and communications

Phase IVEM&V

(Long-Term and Beyond) Evaluate program performance

Identify and implement measurement

and verification protocols

Perform continuous improvement

Program Delivery Options

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Utilize TVA staff or TVA third party administrator staff

May be unit or performance based

May target end user or retail/distribution chain

Could be TVA branded, co-branded or power distributor branded

TVA will consider options for power distributor performance incentives for energy savings achieved

Turnkey Approach – TVA Developed, Managed, and Delivered

Program Delivery Options (Cont’d)

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Utilize distributor staff or third party administrator staff

May be unit or performance based

Could be co-branded or power distributor branded

TVA will consider options for power distributor performance incentives for energy savings achieved

Power distributor delivered and TVA developed and managed

Program Delivery Options (Cont’d)

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Program Design Assistance available from TVA

Distributor pays all costs of program management and implementation

May be unit or performance based

‒ Unit based will be paid at same $/unit as TVA program

‒ Performance based will be paid at $/kWh as TVA program effective delivery cost minus EM&V costs (about 8% based on national best practices)

Power Distributor must follow all TVA rules for reporting, evaluation, measurement, and verification

‒ Power distributor must make all records, meter data and customer data available for TVA validation of program performance as a condition of TVA payment

Individual Power Distributor Developed and Delivered

Program Delivery Options (Cont’d)

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A group of distributors may develop and implement a program or programs either as group or through a third party

All of the rules of Program Delivery Option 2 apply

Power Distributor Aggregation Developed and Delivered

Power Distributor Chooses Not to Participate

2011 2012

May Jun. Jul. Aug. Sep. Oct. Nov Dec. Jan. Feb.

EEDR Stakeholder Outreach Plan

Business Case

TVA 2012 Budget

TVA Five-Year Plan

Internal Communications

TVPPA ESC

Direct Serve Customers (TVIC)

External Stakeholder

Group

Internal EEDR Brownbag

TVA Board

May 23 FY 2012

Governance Council

Design Document Refine with Outreach Implementation Planning and Implementation

Stakeholder Analysis All PD MM Meeting

Three All-PD

Meetings

Prep with

TVPPA ESC

Prep with

TVPPA ESC

TVPPA Cust. Comm. Conf.

14-16

CER Committee

Update 13 17 17

EE Forum

Phase IDesign and Document

Phase II & IIIImplementation Planning and

Implementation

36

ContinuousOngoing

2013 LRFP Input

31

We are here

AVI Meeting

12

21

20

2013 LRFP

Complete

30

Leadership Council

Completed

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18 15 20 1

29

30

13

11

12 8

Webinar

Prep with

TVPPA ESC

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Going Forward… What you can do

• Provide us input on your needs and wants regarding energy efficiency

• Help us understand what is working and what is not working

• Contact your TVA account representative and participate in the

Programs

 

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Questions?