esa program multifamily segment study public workshop #3 november 13, 2013
TRANSCRIPT
2
Introductions
Multifamily Segment Study Program Administrators• PG&E: Mary O'Brian
Multifamily Segment Study Team• CPUC ED: Tory Francisco• PG&E: Mary O'Brian • SCE: Carol Edwards • SDG&E & SoCal Gas: Brenda Gettig
Multifamily Segment Study Contractors• The Cadmus Group: Anne West, Teri Duncan, Eric Rambo, Amy
Ellsworth, Cynthia Kan, Gina Henderson, and a host of others• Research Into Action: Jane Peters, Duane Moran, Joe Van Clock…
… And in the room … and on the phone (we’ll call out each IOU and
organization; please announce yourself with others in your group)
Agenda
– Introductions – ESA Program Objectives & Current Policy Objectives– Review Key Research Questions – Updates on Market Characterization Research Findings– Survey Research Findings– Key Findings - Primary Research Questions– Recommendations – Open Discussion and Comments on Draft Report – TimelineWe encourage discussions throughout the presentation
3
4
ESA Program Objectives Current Policy Objectives
• The dual objectives of the ESA Program are to provide low-income customers with ways to reduce their energy bills and improve their quality of life – Commission’s vision for low-income communities, as stated in
California Strategic Plan for Energy Efficiency By 2020, 100% of eligible and willing customers will have received
all cost-effective [Energy Savings Assistance Program] measures– Decision 12-08-044 directs the IOUs to administer the ESA
Program to yield maximum energy savings at reasonable costs provide an improved quality of life for the low-income populations
5
ESA Program Multifamily Segment Study Key Considerations
How can the current multifamily program offering, in particular the multifamily component of the ESA program, be modified to better meet the needs of low-income multifamily residents?
How can integrated outreach, education, and marketing be most effective in reaching low-income multifamily housing owners/operators?
How can the current service delivery approach be modified to address multifamily, energy-efficiency programming concerns?
Should multifamily segment measure offerings be modified to include more or different measures?
6
Multifamily Study Research QuestionsHow do we help California advance long-term plans to meet the needs of low income IOU customers living in multifamily housing?
What are the characteristics of the low income MF segment Where are the low income MF buildings located? In what ways is this segment being served through the existing ESA
program? (doing and not doing)? Who is the MF customer -- tenant or building owner? What is available (services & benefits) to the MF customer now, via IOU
or other programs? What do MF customers need from the IOU? What are the barriers to serving MF customers? How are other MF programs offered; what are their organizing
principals?
7
ESA Program Multifamily Segment Study Research Methods
• IOU program manager interviews: background on ESA program, MFEER, EUC MF• 14 interviews with organizations representing market rate housing, affordable
housing, an installation contractors: focused on financing, participation barriers• 124 surveys with owners and operators of market rate and affordable housing in
the 4 IOU territories: characterize the multifamily segment and provide insight into decision making
• Literature search identifying low-income and multifamily programs cataloged key program elements of multifamily and low income programs statewide
• Secondary and primary research examined 44 programs nationwide; cataloged 37 and examined 5 key programs in depth
• 16 state and national options for financial offerings were cataloged • ESA Program databases & IOU data used to develop the survey sample,
determine the mix of measures installed and measure cost, and to identify the geographic location of participants for the program penetration analysis
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Updates on Research Findings
• Additional research on buildings and equipment • Number of buildings, size, vintage, equipment age,
opportunities by weather zone• ACS, AHS, RASS
• Measure costs• Utility tracking data
• Comparison with other enumerations • ACS, Peterson-Athens, Evergreen, RASS
10
Research Question: What are the characteristics of the low income MF segment?
Low-income households make up about 30% of all households statewide
871400070%
2396290.2754590119%
147709.7245409871%
905094.199293667%
232244.578406342%
37962.22230%
Adequate Income
Low-Income Single Family
Low-Income Mobile Home
Low-Income Multifamily Market Rate
Low-Income Multifamily Rent Assisted
Low-Income Multifamily Tenant Owned
Tota
l Hou
seho
lds
11
The Low-Income SegmentLow-income multifamily 5+ households make up almost one-third of low-income
households statewide
829943.17262136222%
1033245.9307568228%
494889.86058900613%
38212.09242481721%
147709.7245409874%
905094.1992936624%
232244.578406346%
37962.22231%
Single Family Rent
Single Family Own
Multifamily 2-4 Rent
Multifamily 2-4 Own
Mobile Home
Multifamily 5+ Market Rate
Multifamily 5+ Rent Assisted
Multifamily 5+ Tenant OwnedLow
-Inco
me
Hou
seho
lds
12
Low-income Owners of Multifamily Units
• Characterization Data* suggests:• 3% of low-income MF units are tenant
owned (1% of all LI)• Measure based differences:
– AC (58% compared to 38% of renters**)– Energy Star appliances (57% compared to 35%***)
• Housing stock
No surveys conducted with low income owners in multifamily units
*AHS data IS LIMITED – Low number of survey responses results should be interpreted with caution
829943.17262136222%
1033245.9307568228%
494889.86058900613%
38212.09242481721%
147709.7245409874%
905094.1992936624%
232244.578406346%
37962.22231%
**Statistically significant difference p < 0.10 ***Statistically significant difference p < 0.05
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Low-income Multifamily RenterAffordable and Market Rate Housing
Affordable/Subsidized MF Market– 6% of total LI market– Or, about 20% of LI MF market
Market Rate LI MF Market– 25% of total LI market– Or, about 75% of LI MF market
829943.17262136222%
1033245.9307568228%
494889.86058900613%
38212.09242481721%
147709.7245409874%
905094.1992936624%
232244.578406346%
37962.22231%
14
IOU Total HouseholdsLow-Income Multifamily Households1
Percentage of Total
Households
PG&E 5,185,000 389,000 7%SCE 4,115,000 335,000 8%SDG&E 1,170,000 117,000 10%SCG 6,167,000 657,000 11%Statewide 12,433,000 1,175,000 9%1. The sum of the LIMF household column by utility, 1,498,518, includes households served by 2 IOUs.
Source: U.S. Census Bureau American Community Survey 2011
The Low-Income Multifamily Segment Proportion of total households
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IOU Low-Income Households
Low-Income Multifamily Households1
Percentage of Low-Income Households
PG&E 1,459,000 389,000 27%SCE 1,240,000 335,000 27%SDG&E 302,000 117,000 39%SCG 1,980,000 657,000 33%Statewide 3,719,000 1,175,000 32%1. The sum of the LIMF household column by utility, 1,498,518, includes households served by 2 IOUs.
The Low-Income Multifamily Segment
Proportion of low-income households
Source: U.S. Census Bureau American Community Survey 2011
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IOU Multifamily Households
Low-Income Multifamily Households1
Percentage of Multifamily Households
PG&E 947,000 389,000 41%SCE 789,000 335,000 42%SDG&E 308,000 117,000 38%SCG 1,493,000 657,000 44%Statewide 2,776,000 1,175,000 42%1. The sum of the LIMF household column by utility, 1,498,518, includes households served by 2 IOUs.
The Low-Income Multifamily Segment
Proportion of multifamily households
Source: U.S. Census Bureau American Community Survey 2011
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IOU ACS Households
RASS Households
ACS/RASS Households
ACS Multifamily Households
RASS Multifamily Households
ACS/RASS Multifamily Households
PG&E Electric 4,263,939 4,634,081 92% 790,156 728,996 108%
SDG&E Electric 1,169,705 1,230,071 95% 308,055 278,170 111%
SCE Electric 4,115,093 4,371,616 94% 789,022 705,027 112%
Source: U.S. Census Bureau American Community Survey 2011 and 2009 RASS
Comparison of Cadmus and RASS EstimatesCadmus estimates fewer total households but more multifamily households
• 2009 RASS has large sample but weak response rate but 2011 ACS 21x larger and better response rate• 2009 RASS: n = 25,721; response rate 18%• 2011 ACS: n = 544,878; response rate 98%
• But 2011 ACS allocation by geography; 2009 RASS targets known utility customers
18Source: U.S. Census Bureau American Community Survey 2011 and 2012 Athens Research
Comparison of Cadmus and Athens Estimates Cadmus estimates 3% fewer low-income households than Athens
Los A
ngeles
Orange
San Bernardino
Alameda
Contra Costa Kern
San Fr
ancisco
San Jo
aquin
Sonoma
Santa Barbara
Monterey
San Lu
is Obisp
o
Merced
Butte
El Dorado
Imperia
l
Madera
HumboldtSu
tterLa
ke
Tuolumne
Calaveras
Amador
Del Norte
Colusa InyoMono
ModocAlpine
40%
50%
60%
70%
80%
90%
100%
110%
120%
130%
County
Cadm
us D
evia
tion
from
Ath
ens E
stim
ate
• Cadmus developed estimate of low-income multifamily households at the census tract • For low-income estimates at county level we applied Athens percentages to Cadmus
estimate of households• Figure shows percent difference between Cadmus and Athens estimate of households,
in order of total number of households – Average = 97%
Counties sorted by size
20
Surveys with Building Owners and Operators of Market Rate and Rent Assisted Housing
Surveys asked about: Numbers of buildings and sizes Building characteristics including equipment Awareness of IOU energy efficiency programs Decision making related to purchase and installation
of energy efficient equipment
21
Market Rate59%
Rent Assisted41%
Survey Respondents
Surveys with Building Owners and ManagersRent Assisted Sample Compiled From:• (HUD) Section 8 rental subsidy program• Low Income Housing Tax Credit (LIHTC) administered by
the California Tax Credit Allocation Committee (CTCAC)• US Department of Agriculture for California Rural
Development• With help from CHPC
Market Rate Sample Compiled From:• Customer databases from all 4 IOUs• Included master or common-area meter accounts in
buildings with at least one CARE recipient• Selected census tracts with low income households• Internet search housing associations larger cities• Contacts suggested by CHPC• SCE identified MFEER building ownersVery difficult to reach BOTH samples• Outdated phone numbers • Difficult to find owners• Refused survey• Cannot or will not confirm tenants are low income• Other reasons
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Surveys with Building Owners & OperatorsSampling Plan and Weighting
Sector Size Planned Completed
Assisted5 to 25 Units 50 226 to 249 50 14250 or More 50 35
Market5 to 25 Units 50 3626 to 249 50 26250 or More 50 11
Total 300 124
Sector Sector Weight Size Design Weight
by Size StrataCombined
Weight
Assisted 0.125 to 25 Units 0.45 0.05426 to 249 Units 0.45 0.054250 or More Units 0.10 0.012
Market 0.885 to 25 Units 0.45 0.39626 to 249 Units 0.45 0.396250 or More Units 0.10 0.088
Size refers to the number of apartment units in CA
Weights bring responses of the sample in line with the estimated population
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Market
Assisted
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100%
48%
23%
50%
19% 58%
YesNoDon't know
Percent Responding
Sect
orParticipation in Utility Rebate Programs
Do you know if your company has taken advantage of any utility offered rebate programs? (n=124)(Respondents mentioned measures installed and some programs by name)
Half have not participated
More than half don’t know
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Cost, Price of Equipment
Other
Don't know
Tenants pay utility bill, No incentive
Availability of Equipment
Not Enough Information
No Incentives or Equipment is Ineligible
0% 10% 20% 30% 40% 50% 60%
2%
6%
24%
10%
21%
15%
15%
1%8%
1%
Assisted
Market Rate
Percent Responding
17%
Reasons for Not Installing Energy Efficient Equipment When Upgrading
Can you tell me why your company did not make those improvements with more energy efficient equipment? (n=51)
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Manages Only
Owns Only
Manages and Owns
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100%
74%
44%
63%
26%
56%
36%
YesNoDon't know
Percent Responding
Ow
ners
hip
Stru
ctur
eAwareness of Utility Sponsored
Low-Income Programs
Have you ever heard of a program offered by the utilities which provides income qualified households with free equipment and services such as energy efficiency lighting or appliances to help customers save energy and money on their energy bills? (n=124)
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Awareness of Utility Sponsored Low-Income Programs
• Responses were weighted to reflect the estimated population• Owners and managers of larger numbers of units in CA were more aware of utility
sponsored low-income programs than those of smaller numbers of units
25 or Fewer Units
26-249 Units
250 or more Units
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100%
46%
76%
90%
51%
24%
10%
YesNoDon't know
Percent Responding
Build
ing
Size
:N
umbe
r of u
nits
in C
A
27
Market
Assisted
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
64%
63%
20%
17%
13%
19%
YesNoIt dependsDon't know
Percent Responding
Sect
orPercentage Who Would Support Tenant
Participation in Income-Qualified Programs
This program requires you to complete paperwork and allow contractors not hired by your company to access your property. Would you be supportive of tenants if they wanted to participate? (n=92)
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Percentage Who Would Support Tenant Participation in Income-Qualified Programs
25 or Fewer Units
26-249 Units
250 or more Units
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100%
60%
64%
77%
11%
30%
13%
25%
6%
4%
10%
YesNoDependsDon't know
Percent Responding
Build
ing
Size
:N
umbe
r of U
nits
in C
A
This program requires you to complete paperwork and allow contractors not hired by your company to access your property. Would you be supportive of tenants if they wanted to participate? (n=92)
29
Survey Findings: Decision MakingRent Assisted & Market Rate Sectors
Decision Making Themes Rent Assistance Housing Market-Rate HousingPayment for upgrades when equipment cannot be repaired
23% credit card20% reserve account12% savings
16% credit card21% reserve account43% savings
Payment for upgrading operable equipment
46% reserve account 23% credit card
39% savings 17% credit cards13% reserve accounts
Awareness of financing options
41% not aware of financing options36% aware of tax credits
68% not aware of financing options9% were aware of tax credits
Factors influencing decisions to replace or upgrade equipment
93% said cost53% said energy efficiency 42% size of upgrades
75% said cost 31% energy efficiency
30
Decision Making Themes Rent Assistance Housing Market-Rate Housing
Decision Maker 51% owners or managers 74% owners or managers
Decisions made one building at a time or for the portfolio
46% whole portfolio 33% one building at a time
12% whole portfolio 77% one building at a time
Planning for Upgrades 44% when equipment breaks 23% plan ahead
73% when equipment breaks 16% plan ahead.
Planning Timeline25% plan less than one year before 38% between one and two years in advance
43% less than one year before 24% between one and two years in advance
Survey Findings: Decision MakingRent Assisted & Market Rate Sectors
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Survey Findings: Decision MakingRent Assisted & Market Rate Sectors
Decision Making Themes
Rent Assistance Housing Market-Rate Housing
Do these factors make it difficult to upgrade?
48% lack of capital 24% lack of access to financing25% lack of attractive financing terms26% coordinating funding with opportunities
17% said lack of capital 12% lack of access to financing 12% lack of attractive financing terms 17% coordinating funding with opportunities
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Primary Research Questions
Where are the low income MF buildings located? In what ways is this segment being served through the existing ESA
program? (doing and not doing)? Who is the MF customer -- tenant or building owner? What is available (services & benefits) to the MF customer now, via IOU
or other programs? What do MF customers need from the IOU? What are the barriers to serving MF customers? How are other MF programs offered; what are their organizing
principals?
34
Where are the low-income multifamily building opportunities located?
• Geocoding of ACS data allows estimate of the number of households in each census tract, county, etc.
• Estimation of buildings is more difficult• Census data is collected at household level
• A rough estimate is possible using basic math: • 1000 LIMF households living in buildings with 5 to 9 units:
1000 ÷ 7 = 143 buildings• But low-income households live among adequate-income
households in the same buildings• If the average mixing ratio (low : adequate) is 2:1 then:
1000 x 1.5 ÷ 7 = 214 buildings
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Building Size PG&E SCE SDG&E SCG
5 to 9 Units 23,000 19,500 7,000 38,500
10 to 19 Units 9,500 8,000 3,000 16,000
20 to 49 Units 3,500 3,000 1,000 6,500
50 or More Units 2,000 2,000 500 3,500
Total 38,000 32,500 11,500 64,500
Estimated Number of Buildings Housing Low-Income Multifamily Households by Building Size
Where are the low-income multifamily building opportunities located?
Note: This table refers to building size. This is not the same as the survey data which reported the number of apartment units in CA.
36
Where are the low-income multifamily building opportunities located?
•Specific market data can help the IOUs develop customized marketing and delivery strategies for their target populations
It depends:Opportunities are associated with building vintageHeating and cooling equipment age, weather zone….
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• Statewide, 68% of low-income multifamily households live in units built before 1980 (~799,000 households) Best opportunity for shell upgrades
• About 80,000 of these households are in climate zones 11 through 16 and in pre-1980 buildings
• Costs for envelope and air sealing ~$155 per unit x 80,000 units = $12.4 million
Building Vintage
Riverside
San Diego
San Jose
Sacramento
Anaheim
Oakland
Los Angeles
San Francisco
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
17%
29%
31%
32%
34%
50%
51%
73%
9%
19%
19%
14%
20%
8%
13%
8%
7%
9%
6%
10%
13%
8%
8%
9%
10%
11%
8%
10%
6%
3%
7%
1%
34%
22%
5%
20%
18%
12%
8%
2%
9%
3%
5%
2%
2%
10%
3%
1%
4%
3%
11%
3%
1%
3%
3%
3%
10%
4%
15%
8%
6%
7%
6%
2%
Before 19701970 to 19741975 to 19791980 to 19841985 to 19891990 to 19941995 to 19992000 or Later
Distribution of Low-Income Multifamily Households by Vintage and MSA
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Heating Equipment
• 2009 Residential Energy Consumption Survey (RECS) for Western Census Region • 40% of low-income multifamily households have heating
equipment 20+ years old (49% gas heat; 32% electric heat)
• About 216,000 households have forced air heating systems 20+ years representing about 21,600 buildings
• Cost for furnace replacement @ about $1329 = $28.7 million
39
Cooling Equipment
• PG&E about 120,000 low-income multifamily households in climate zones 11 – 13. • 78% have central AC• 28% have equipment 20+ years old
• 25,200 households have central AC equipment 20+ years old• Cost for central AC replacement @ about $2,761 = $69.6
million
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Mobility Among Low Income Multifamily Households
• 55% of low-income tenants stayed in their previous apartment three years or less
• Over two 3-year cycles, the rate of turnover in an 80% low-income building assures that about 93% of a building’s units will have been inhabited by low-income households
0 to 1 1 to 2 2 to 3 3 to 4 4 to 5 5 to 6 6 to 7 7 to 8 8 to 9 9 to 100%
10%20%30%40%50%60%70%80%90%
100%
Low IncomeAdequate Income
Years in Prior Residence
Perc
ent o
f Tot
al M
ultif
amily
Ho
useh
olds
41
In what ways is this segment being served through the existing ESA program?
• Little policy distinction between SF and MF– Primarily in-unit measures– 80-20 Rule allows shell measures and vacant units
• Practical differences in service – Need for property owner permission for rental
property (99% of LI MF are renters )– Fewer feasible measures (potentially less savings)
42
In what ways is this segment being served through the existing ESA program?
• In 2012, utilities invested between $156 and $420 per household in energy saving measures
Utility2012 Multifamily
Households Receiving Measures
2012 Measure Cost
Cost per Household
PG&E 19,723 $8,283,942 $420
SCE 13,839 $2,158,019 $156
SCG 17,897 $3,925,482 $219
SDG&E 10,009 $2,878,598 $288
43
• Energy-efficiency services and incentives available to multifamily customers in California are divided: – Programs with a primary focus on serving the tenant as
the multifamily customer – Programs with a primary focus on reaching the building
owner as the multifamily customer
Who is the multifamily customer – the tenant or building owner?
44
What is available (services and benefits) to the Multifamily tenants and building owners now
Program Characteristics
Programs Targeting TenantsPrograms Targeting Building Owners
MFEERWhole Building
ESA Program CSD Program Bay REN EUC MF Path and SoCal REN
Building Areas Treated
Dwelling units Dwelling unitsDwelling unitsCommon areasCentral systems
Dwelling unitsCommon areasCentral systems
Dwelling unitCommon areasCentral systems
Typical retrofit scope
Lighting measures, hot water saving measures,
weatherization, refrigerator
replacement
Lighting measures, hot water saving
measures, weatherization,
refrigerator replacement
Single-measure upgrades: primarily lighting for PG&E,
SCE, and SDG&E, water saving measures for SCG
Multiple measure upgrades
Comprehensive upgrades
Measure Identification
Walk-through assessment
Energy audits using diagnostic equipment
No standard protocol, contractor may conduct an assessment to determine
scope of work
Building owner completes
software-based assessment
Investment grade audit
Incentive type Direct installation1 Direct Installation1 Prescriptive rebates2 – may cover full cost to participant
Fixed per-unit incentive3
Performance-based incentive4
45
What is available (services and benefits) to the low-income multifamily tenants now?
• Low-income programs targeting households: ESA & CSD Programs– Provide similar services focused on low-income
households – Primarily provide in-unit measures– Ongoing efforts to improve coordination– MIDI?
46
What is available (services and benefits) to the multifamily building owners now?
MFEER
• Single measure upgrades– Primarily lighting and hot water
savings measures
• No standard audit protocol– Contractor may conduct assessment
to determine scope of work
• Prescriptive rebates– May cover full retrofit cost for some
measures
Whole Building (e.g. EUC MF)
• Comprehensive upgrades
• Investment grade audit
• Performance-based incentives
• Single Point of Contact will direct building owners to appropriate programs and assist with coordination
47
Comprehensive Low-Income Multifamily in CA?
• LI MF building owners must participate in multiple programs
• Integration of ESA and MF EUC occurs differently across the state– Installation of ESA measures may make it more
difficult for a building to meet MF EUC performance targets
48
What are the barriers to serving MF customers?
• Need to obtain property owner permission is primary barrier to serving MF tenants
• Primary barriers to reaching MF building owners:– Lack of prioritization of energy efficiency– Lack of access to capital; other priorities for investment
• Both tenant and owner affected by split incentives– Reluctance (& inability) of tenant to pay for upgrades to
equipment in space they do not own– Reluctance of owner to pay for upgrades that lower tenant
(but not necessarily owner) bills
49
Thresholds for Qualification
Administrator Income Eligibility Requirement
Proportion of Tenants that Must Meet Eligibility Requirement
ESA Program 200% of federal poverty level or less 80%
Energy Outreach Colorado
200% of federal poverty level or less 67%
CSD Programs 60% of state median income or less 67%
Massachusetts IOUs 60% of area median income or less 50%
NYSERDA 80% of state median income or less 25%
50
Alternative Income Documentation
In comparison programs we found examples:– Primarily for buildings receiving housing subsidies
– subsidy status a proxy for income– NYSERDA “Rent Roll” certification offers a broader
alternative – the simplest, but least certain
51
Support for Building Owners
• A single point of contact provides this guidance– All comparison programs provide participants with
a single point of contact• Dual role: technical advice and program participation
support
– IOUs have proposed a single point of contact• Part of EUC MF Path program, but will work with
participants in other programs• Focus is on program participation support
52
How are other multifamily programs offered? What are their organizing principles?
• Promote comprehensive upgrades– Assess opportunities to develop a scope of work
based on cost effectiveness requirements– Provide substantial incentives– Assist with financing
• Nonprofit and public benefits organizations prominent in program delivery
53
How are other multifamily programs offered? What are their organizing principles?
Administrator Broad ApproachCNT Energy Partnership + case managementNYSERDA Facilitation + performanceEnergy Outreach Colorado Clearinghouse + general contractorMassachusetts gas and electric IOUs Gatekeeper + full servicePublic Service Electric & Gas Company (PSE&G) All comers + financing
55
ESA Program Multifamily Segment Study Recommendations Methodology
• Recommendations Context:– Develop alternative program design and delivery strategies for
consideration by IOUs and Commission
• Objectives: – Provide cost effective energy efficiency services to 100% of eligible
and willing customers by 2020– Program will be “directed, administered, and delivered in a manner so
as to yield significant energy savings”
California Public Utilities Commission. California Energy Efficiency Strategic Plan. January 2011 Update, pg. 23-24
Decision 12-08-044
56
ESA Program Multifamily Segment Study Recommendations Methodology
Barr
iers
, Driv
ers,
Rep
licab
le
Mod
els
Eligibility rules
Participant intake
Enrollment
Technical & Administrative support
Marketing & Outreach
Delivery and Implementation
• Reviewed– Research findings– Market
characteristics/analysis– Existing LI/MF efficiency
programs in California and elsewhere
Resulting recommendations fall under two scenarios: (1) Reaching more income-qualified people(2) Maximizing cost effective energy savings
57
RecommendationsReaching More Income Qualified People
• Context: – Goal consistent with ESA’s long term vision, as directed in California
Energy Efficiency Strategic Plan – Much already accomplished– Current operations comply with existing programmatic framework
with rules, policies, and procedures set by the Commission– Significant program design adjustments by IOUs may be limited
• But: As program matures, it will become harder to reach the “high hanging fruit”
• Recommendations intend to help ESA reach increasingly hard-to-reach populations and attract more income qualified households to the program
58
Recommendations Reaching More Income-Qualified People
• As program matures, IOUs will need to dedicate greater resources to finding harder to reach participants– Pockets of LI housing in affluent areas– LI tenants in market rate buildings– Older buildings, climate zones indicating shell potential– Specific equipment at or near the end of their useful lives
• Benefits: – Treat more households, contribute to ESA long term vision
• Costs: – Reallocate marketing dollars to enable targeted research to find
remaining eligible households
Consider adopting customized recruitment/marketing strategies (by IOU) to target measures, buildings, and geographic areas
59
Recommendations Reaching More Income-Qualified People
• Currently treats:– Occupied and verified units (80%) – Unoccupied units (within the 20% not verified)– But not occupied units with unverified tenants
• Benefits of treating all available opportunities – Saves outreach costs – Maximizes savings & minimizes lost opportunities– Likely to benefit low income households during the measures’ life
• Consider: tenant mobility & housing characteristics• Further research:
– Quantify costs and savings to treat units not treated in otherwise qualified buildings
In buildings where 80% of the tenants are income-qualified, treat all units in the building whether they are vacant or occupied, as well as the building shell
60
Recommendations Reaching More Income-Qualified People
• Current policies simplify income verification requirements to ease enrollment– Tenants can self-certify income in geographical areas with > 80% low
income – Categorical eligibility allows other assistance programs’ income qualification
requirements to serve as a proxy for ESA Program qualification• Recommend assessing opportunities to expand exceptions for buildings enrolled
in a subsidy program (e.g., section 8, HUD)• Two options, mutually exclusive, and likely applies to less than 18%
• Allow tenants to self-certify income in individual buildings that meet certain characteristics (for example, HUD, Section 8, deed restricted)
• Or, extend categorical eligibility policy to allow building level participation, i.e., the building could be treated without talking to each tenant, based solely on the records kept by the building
Consider options for expanding current process exceptions to subsidized buildings
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• Benefits:– Simpler process eases burden on contractor, tenant, owner for qualifying buildings– Serves more participants– Closes gap for missed tenants
• Costs:– Potential risk since the program could serve a larger number of people; some may
earn more than 200% of Federal Poverty Guidelines– Costs of treating additional units
• Additional research:– Determine whether subsidized buildings’ income eligibility rules are aligned with
ESAs– Quantify costs and savings of treating every unit in every subsidized (and yet
untreated) building, and units in subsidized, partially treated buildings
Consider options for expanding current process exceptions to subsidized buildings
Considerations
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RecommendationsMaximizing Cost-Effective Energy Savings
• Context:– Commission and Decision guidance “maximize cost effective energy
savings” points toward comprehensive approach– Requires significant changes to ESA program approach
• Treat building owners as customers • Market to building owners• Complex assessments and more expensive installations • Greater savings, more people served may offset costs
– May entail changes to policy or rules– Research needed to assess full costs and benefits
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Recommendations Maximizing Cost-Effective Energy Savings
• Comparison programs address building at 66% low income• 80% rule stems (in part) from prior ratepayer concerns • Benefits:
– More buildings and units treated, more energy savings – Due to tenant mobility, may benefit low income households – Alignment with CSD
• Costs:– Risk of serving non-eligible households– Strain program resources and/or divert spending from other goals
• Research needed to quantify verification savings, cost of treating non-eligible units, determine process for change
Review the rationale behind the 80/20 threshold for treating all units and building shell to ensure it remains consistent with the current policy objective
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Recommendations Maximizing Cost-Effective Energy Savings
• Larger buildings undergo renovations every 15-20 years– Requires recapitalization or new debt– Good opportunity to integrate energy efficiency upgrades – But, represents a relatively small population of larger buildings
• Recommend researching target buildings (and trigger points) to align outreach– Research permitting and land use data to approximate rehabilitation schedules– Coordinate with lenders active in multifamily market– Coordinate with local governments for data on trigger points– Use targeted direct communications
• Costs: relatively small, staff time to conduct research• Benefits: potentially significant energy savings
Consider researching building recapitalization cycles to inform marketing strategies that target building owners
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Recommendations Maximizing Cost-Effective Energy Savings
• Most challenging to implement• Suggests need for:
– Comprehensive building assessments– Significant technical and administrative support/single point of contact
approach– Marketing to building owners/managers– Analysis of costs based on per building estimates
• Three scenarios proposed
Consider adding a comprehensive project path for ESA building owners who wish to implement whole-building upgrades
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Scenario 1
• Allow buildings at the 80% threshold to receive:– All currently available services: unit upgrades, building shell, ceiling
insulation– Common area direct install measures – Common area lighting upgrades– Cost effective central system upgrades
Allow common area measures under the existing ESA Program rules along with shell measures
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Scenario 2
• Ensure SPOC can support all LI and MF programs: e.g.,– Screen participants– Guide them to appropriate programs – Verify eligibility– Provide administrative support to building owners
• Provide larger incentives for income-qualifying buildings to overcome cost barriers in low-income housing– MFEER: Larger prescriptive incentives for common area measures– EUC MF: Incentive adder for low-income units or custom approach– Require all cost effective in-unit upgrades
Create a low-income program path for eligible building owners and managers within the existing MFEER and/or MF EUC programs
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Scenario 3
• Train call center staff or add intake contractor to help guide participants, verify eligibility, and provide administrative support
• Add direct install measures for common areas• May entail both prescriptive (common area) and custom (whole building)
incentives• Allow building owners to use their own contractors or conduct a bidding
process
Create a new participation path within the existing ESA Program structure that allows building owners and managers to implement larger building upgrades
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Suggestions for Further Research
• To make decisions about program and policy, utilize data from EUC MF– EUC MF actual costs and savings– How the unit-level measure mix differs between EUC MF and ESA
Program• Determine the total number of ESA-willing and available tenants
– The number of units that were not treated because they did not meet the 3 measure minimum (provides more information about the total number of units)
– Further data about barriers to participation to understand the percentage who are unwilling
• What does it cost to income-verify a tenant (e.g., cost to program, to contractors, to building management)?
• How many buildings were not treated (lost opportunity) because 80% of units were not income verified?
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Suggestions for Further Research
• Determine the eligibility rules around HUD, section 8, etc., to see how they align with ESA program rules
• Determine the number of:• buildings (and units) subsidized through HUD, Section 8 etc.• buildings that have not been touched by the ESA program• subsidized buildings that have been partially treated
• How many market rate and subsidized buildings might qualify if 66% are income-qualified?
• In both 66% and 80% buildings, how many tenants are above 200% FPL• What are the costs for marketing research (e.g., to research recapitalization)
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A Few Last Notes• There is great interest in the low income multifamily segment
– And, it is a hard to reach, difficult to characterize and understand– Difficult to determine the relationships between buildings, properties,
and companies, but it’s critical to understand points of contact– Many programs touch these customers
• The time and effort needed for this research was far greater than anticipated– But we had a stroke of luck with 2011 AHS oversample
• Survey research with building owners and managers fell short of anticipated target; owners were difficult to identify and reach
• Building characteristics profile is not possible under this research timeline and budget, i.e., determine the number of garden apartments, high rises etc.
• Market rate tenants are difficult to identify and reach; we did not find a means to locate them or ways to enroll them – not feasible to go door-to-door to verify income
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Timeline
11/15/13 -- Public comments duewww.energydataweb.com
12/4/13 -- Post final report
Contact InformationMary O'Brian, PG&E: [email protected]
Tory Francisco, CPUC ED: [email protected] West, Cadmus: [email protected]
Eric Rambo: [email protected] Moran, Research Into Action: [email protected]