XX-XX: Behavioral Modification: Home Energy Reports

Residential (Single and Multi-Family)

Electric and Natural Gas

Issued: 6 / 1 / 1 8

Prepared by: DTE Energy

Version: 1.0

Michigan Behavioral Resource Manual 1 Version 1.0

Document Revision History

Version # Revision Date Description of Revisions and Affected Sections Edited By

1.0 June 1, 2018 1. Annual application for the Nth year measure. Specifically, introduces four new measures:

a. 7th year 7k-9k kWh Annual Usageb. 7th year 9k-11k kWh Annual Usagec. 7th year 900-1,2000 Therms Annual

Usaged. 7th Year > 1,200 Therms Annual Usage

DTE Energy

EWR Collaborative Review and Decision

Date Description of Collaborative Decision Lead

Michigan Behavioral Resource Manual i Version 1.0

Table of Contents

1. New Measure and Update to Existing Measure...........................................................................................1

2. Purpose and Measure Background...............................................................................................................2

3. Measure Description........................................................................................................................................2

4. Measure Specification & Savings Summary.................................................................................................3

5. Baseline and Proposed Improvement Description.......................................................................................4

6. Methodology and Assumptions......................................................................................................................5

7. Estimated Energy Savings over Baseline.....................................................................................................7

8. Potential Savings Overlap.............................................................................................................................10

9. Coincidence Factor........................................................................................................................................13

10. Measure Life...................................................................................................................................................13

11. Measure Cost..................................................................................................................................................13

12. Any Recurring Cost........................................................................................................................................13

13. Relevant Codes and Standards...................................................................................................................13

14. Ongoing EM&V, Research, and Calibration Planning...............................................................................13

15. Sources of Information...................................................................................................................................14

16. Attachments....................................................................................................................................................14

Michigan Behavioral Resource Manual ii Version 1.0

1. New Measure and Update to Existing Measure

1. Updates to Existing Measures

This workpaper does not propose updates to existing measures.

2. New Measures

This workpaper proposes updates to the Michigan Energy Resource Manual for existing electric and gas measures based on additional energy savings data for the 7th year of continuous HER program treatment.

Electric/Gas MeasureElec/Gas Behavior Modification: Home Energy Reports, 9k-11k kWh Annual Usage

(7th year) Elec/Gas Behavior Modification: Home Energy Reports, 7k-9k kWh Annual Usage

(7th year) Elec/Gas Gas energy savings for year 7 values for 900-1,200 Therms Annual

Usage (7th year)Elec/Gas Gas energy savings for year 7 values for >1,200 Therms Annual Usage

(7th year)

2. Purpose and Measure Background

This workpaper reports the results of the calibration of the Behavior Modification: Home Energy Report measure. Compared to the values included in the 2017 Michigan Behavioral Resources Manual, this calibration:

1. Updates electric energy and gas savings values for program year 7 based on additional energy savings data that has become available for HER program treatment between May 1, 2017 and April 30, 2018.

- Electric energy savings for year 7 values for 7,000 to 9,000 kWh annual usage band- Electric energy savings for year 7 values for 9,000 to 11,000 kWh annual usage band- Gas energy savings for year 7 values for 900-1,200 Therms annual usage band.- Gas energy savings for year 7 values for >1,200 Therms annual usage band.

3. Measure Description

The Home Energy Reports program provides residential households accurate and timely information on their energy consumption through a variety of communication methods to change the consumers’ energy usage behavior.

The Home Energy Reports program is organized around two concepts. First, motivate consumers through normative messaging to change their energy-use behavior. Personalized neighbor comparisons based on the size of the home, location, and heating fuel type—among other criteria—give households a motivational benchmark for their energy usage. Second, provide them with salient, personalized advice to capitalize on this motivation to use less energy and save money.

Home Energy Reports are delivered through direct mail and are often supplemented with digital communications such as email, the web, mobile phones, and social networks. This platform approach ensures that all households can access this information in the most effective way.

Michigan Behavioral Resource Manual 1 Version 1.0

Applicable Building Type(s)

Applicable Sub-

categories

Applicable Fuel Type(s) Affected End-Use Load(s)

Electricity Natural Gas

Space Heating

Space Cooling

Water Heating Lighting Appliance Process Other

Residential n/a

4. Measure Specification & Savings Summary

4.1 Measure Specification

Behavior Modification Reports are a tool that can be deployed to residential customers to drive a behavioral change to reduce home energy consumption. Key information includes:

1. Comparison of the customer’s home energy use to neighbors’ energy usage

2. An energy consumption grade

3. Comparison of the current period’s energy usage with a past period’s use and comments on increased or decreased energy utilization

a. Typically, this compares the current month or quarter with the same month or quarter from the prior year.

4. Suggested actions the customer can take to improve energy efficiency including some low or no cost ideas, as well as higher impact ideas that may require capital expenses

In addition, the program must have a simple opt-out process.

4.2 Requirements for Application

The Behavior Modification Report is restricted to single family residences.

4.3 Savings Summary

Electric Measures

Program Year Usage Band Electric Savings per Customer

Coincident Peak Demand Savings

7th Year 9k-11k kWh Annual Usage 2.73% 4.10%7th Year 7k-9k kWh Annual Usage 2.20% 3.30%

Note: Energy savings quoted as percentage of baseline energy consumption.

The addition of these two measures reflects new data available on the savings performance of the HER program in its 7th year of continuous operation at DTE. The savings data for these two measures are based on actual savings for the period May 1, 2017 – April 30, 2017.

Gas Measures

Program Year Usage Band Gas Savings per Customer

7th Year 900-1200 Therms Annual Usage 0.82%7th Year >1200 Therms Annual Usage 0.82%

Note: Energy savings quoted as percentage of baseline energy consumption.

The addition of these two measures reflects new data available on the savings performance of the HER program in its 7th year of continuous operation at DTE. The savings data for these two

Michigan Behavioral Resource Manual 2 Version 1.0

measures are based on actual savings for the period May 1, 2017 – April 30, 2017.

5. Baseline and Proposed Improvement Description

5.1 Baseline Measure, Practice, or Technology

The baseline measure is a control group customer that does not receive energy usage feedback and benchmarking from a paper or email Home Energy Report.

5.2 Improved Measure, Practice, or Technology

The behavior modification report is an improved measure in that it provides customer-specific energy usage feedback, benchmarking and tips to identify potential savings opportunities, thus altering participant behavior and energy consumption.

6. Methodology and Assumptions

The Home Energy Report (HER) program, implemented by the investor-owned utilities in Michigan (DTE Energy and Consumers Energy), delivers Behavior Modification Reports and employs a randomized controlled trial (RCT) design that allows for the accurate and unbiased measurement of program impacts. In an RCT design, eligible households are randomly assigned to either a treatment group that receives Behavior Modification Reports or a control group that does not receive Behavior Modification Reports. A sound randomization leads to treatment and control groups that are statistically equivalent along observed and unobserved characteristics with the sole difference being that the treatment group receives Behavior Modification Reports, and the control group does not. Therefore, any difference in energy usage observed between the treatment and control group can be attributed to the Behavior Modification Reports. The RCT program design is summarized in Figure 1.

Figure 1: Experimental Setup for a Randomized Controlled Trial

Experimental design is considered the “gold standard” of program evaluation and a RCT is recognized as an appropriate method for evaluation in the United States Department of Energy’s Uniform Methods Project1 and in an evaluation protocol report authored by the State and Local

1 The Uniform Methods Project is coordinated by the National Renewable Energy Laboratory (NREL). Available: https://www4.eere.energy.gov/seeaction/system/files/documents/emv_behaviorbased_eeprograms.pdf Michigan Behavioral Resource Manual 3 Version 1.0

Energy Efficiency (SEE) Action Network in 2012.2 Experimental designs eliminate self-selection bias, wherein customers who choose to join a program are different from those who choose not to join, making the savings estimates from experimental designs known to be unbiased.

The energy savings resulting from the behavior modification report are calculated using a regression-based ex post evaluation of the HER program, comparing participant energy use to a counterfactual, baseline usage scenario in the absence of the program. In the case of a RCT, baseline usage is determined by the control group. The regression uses a fixed effects model that controls for unobserved differences in pre-treatment baseline characteristics.

7. Estimated Energy Savings over Baseline

This section provides savings estimates from the regression model described in Section 6 and formulas to calculate energy and coincident peak demand savings for the behavior modification report, along with illustrative examples.

Figure 2 illustrates how savings are adjusted to account for savings overlap. The details of the savings overlap are discussed in Section Error: Reference source not found.

Figure 2. Summary of Savings

Source: Navigant

7.1 Regression Savings Estimates

The table below shows the estimates of per savings from the regression after adjusting for double counting. The double counting adjustment methodology is described in Section 8.

Electric Measures

Program Year Usage Band Percentage Energy

Savings Per ParticipantPercent Demand

Savings per Participant7st Year 9k-11k kWh Annual Usage 2.73% 4.10%

2 Available: https://energy.gov/sites/prod/files/2015/02/f19/UMPChapter17-residential-behavior.pdfMichigan Behavioral Resource Manual 4 Version 1.0

7st Year 7k-9k kWh Annual Usage 2.20% 3.30%

Gas Measures

Program Year Usage Band Percentage Energy

Savings Per Participant7st Year 900-1200 Therms Annual Usage 0.82%7st Year >1200 Therms Annual Usage 0.82%

7.2 Adjusting Estimates for Double Counting

7.3 Formula to Calculate Savings

For an electric Behavior Modification Report targeting 50,000 customers in the seventh program year, with average annual usage of 8,000 kWh and 5 coincident peak kW.

Electric Savings are:

8,800,000 kWh = 2.20% * 8,000 kWh * 50,000 customers

Where,

kWhSavingsRate is the electric energy savings rate according to program year and usage band

CtrlUsage is the 12-month average usage of the control group in the year prior to the current program year

NumHouseholds is the number of consistent households from the HER treatment group3

Coincident Peak Demand Savings are:

DmdSavings(kW )=kWSavingsRate∗CtrlDmd∗NumHouseholds8,250 kW = 3.30% * 5 kW * 50,000 customers

Where,

kWSavingsRate is the demand savings rate according to program year and usage band CtrlDmd is average demand of the HER control group coincident with system peak

(defined as 3 to 6 pm on the three hottest consecutive non-holiday weekdays in July) in the year prior to the current program year

NumHouseholds is the number of consistent households from the HER treatment group

For a gas Behavior Modification Report targeting 50,000 customers in the first program year and average annual usage of 1,300 Therms.

Gas Savings are:

533,000 Therms = 0.82% * 1,300 Therms * 50,000 customers3 The number of consistent households from the treatment group is determined by counting all households that are active and receive the full program year of HER treatment. Michigan Behavioral Resource Manual 5 Version 1.0

Where,

THMSavingsRate is the energy savings rate according to program year CtrlUsage is the 12-month average usage of the HER control group in the year prior to

the current program year NumHouseholds is the number of consistent households from the HER treatment group

For a Dual Fuel Behavior Modification Report targeting 50,000 customers in the first program year, with average annual electric usage of 8,000 kWh and 5 coincident peak kW, and average annual gas usage of 1,300 Therms, the electric, coincident peak demand, and gas savings are the same as above.

8. Potential Savings Overlap

Behavior Modification Reports may increase participation in other utility energy efficiency programs; this additional participation is known as efficiency program uplift and could result in double counted savings if not addressed. To avoid double counting savings, the savings from program uplift are subtracted from behavior modification report savings and attributed to the lifted program.4

The SEE Action Network’s report from May 2012 on best practices for measuring and verifying energy savings from behavioral program identifies the following three steps for measuring savings overlap using a difference-in-difference (DID) statistic:

1. Savings resulting from participation in all other energy efficiency programs are calculated for both the participant and control groups5

2. The difference between participant and control groups is measured

3. Any statistically significant difference in savings is then assigned either to the other program, the program offering behavior modification reports, or split between the programs—in this case all double counted savings were subtracted from the Behavior Modification Report

The general process for removing double counted savings from the savings estimate out of the regression analysis is described in Figure 3. The blue shapes outline the steps for the regression analysisError: Reference source not found, the green shapes outline the steps for the double counting analysis (described in more detail in the rest of this section). The equation at the bottom of the figure shows that double counted savings are removed from savings coming out of the regression analysis to get the savings value without double counted savings which is recommended for the Michigan Behavioral Resource Manual.

4 Refer to Chapter 17 of the Uniform Methods Protocol, Residential Behavior Protocol, for additional information uplift and the methods used to address double counting. 5 This does not include programs for which tracking data are unavailable, such as upstream lighting programs. Michigan Behavioral Resource Manual 6 Version 1.0

Figure 3. Double Counting Adjustment Process

Source: Navigant

Double counted savings adjustment values were last calculated by Navigant during the 2017 calibration study. The calibration study did not determine program uplift for each cohort. Instead, it combined average program uplift estimates for DTE Energy and Consumers Energy across all study cohorts, weighted by the proportion of participants from each utility.6

The program uplift estimates for DTE Energy were based on a DID statistic. This value is defined as the program’s participation rate change between program and pre-program years for the control group subtracted from the same change for the treatment group.

The program uplift estimates for Consumers Energy were based on a simple difference between treatment and control participation rates during the program year.

To calculate the DID statistic, Navigant subtracted the change in the participation rate in another energy efficiency program between the 12 months after a participant started receiving reports (the post period) and the 12 months before (the pre-period) for the control group from the same change for the treatment group. This calculation is shown in Equation 1. The simple difference removes the pre-period participation from the equation.

Equation 1. DID Statistic Calculation( post period treatment group participation−pre period treatment group participation )−(post period control group participation−pre period control group participation )=DID statistic

The DID statistic generates an unbiased estimate of uplift when the baseline average rate of participation is the same for the treatment and control groups, or when they are different due only to differences between the two groups in time-invariant factors, such as the square footage of the residence. The simple difference statistic is unbiased when the baseline average rate participation is the same for the treatment and control groups.

The steps to go from the DID or simple difference statistic to an adjusted per participant savings value are outlined in Equation 2. Multiplying the DID statistic by the number of participants gives the change in the number of people participating in each other energy efficiency program because of the behavior modification report. Multiplying this number of people by the median savings from the other program

6 Estimates were based on evaluations of program tracking data for all programs where data was available. Michigan Behavioral Resource Manual 7 Version 1.0

gives the double counted savings. The double counted savings is calculated for each other program considered and is then summed across all the programs to get total annual double counted savings. Dividing this total annual number by the total savings generated by the behavior modification report programs gives the double counting adjustment value.

Equation 2. Double Counting Adjustment Steps

∆ ¿ of people participating∈other EE programs=¿DID (SimpleDifference)statistic∗¿of participants∈the smartphonebehavior application

Double counted savings=¿∆ ¿ of people participating∈other EE programs∗mediansavings ¿other EE programs

Double countingadjustment value=Doublecounted savingsTotal savings ¿

Behavior Modification Report program ¿

The double counting adjustment values from past evaluations were combined to produce the following adjustment values:

Fuel Electric GasDouble Counting Adjustment Value 0.17% 5.04%

The reported savings values were calculated using the following formula:Regression Savings Rate x (1 – Weighted Average of Difference Statistics) = Reported Savings Rate

Electric Measure Adjustment for Double Counting

Program Year Usage Band

Energy Savings Before Adjustment for Double

Counting (%)Double Counting Adjustment Value

Energy Savings After Adjustment for Double

Counting (%)

7th Year 9k – 11k kWh Annual Usage 2.73% 0.17% 2.73%

7th Year 7k – 9k kWh Annual Usage 2.20% 0.17% 2.20%

Note: The double counting adjustment value for electric HERs is sufficiently small that it does not change the energy savings percentage value when rounded to the second decimal place.

Gas Measure Adjustment for Double Counting

Program Year Usage Band

Energy Savings Before Adjustment for Double Counting (%)

Double Counting Adjustment Value

Energy Savings After Adjustment for Double

Counting (%)

7th Year >1,200 Therms Annual Usage 0.86% 5.04% 0.82%

7th Year 900 – 1,200 Therms Annual Usage 0.86% 5.04% 0.82%

9. Coincidence Factor

The rate of coincident peak savings is 1 for all measures in this workpaper.

10. Measure Life

The measure life is 1 year for all measures in this workpaper.Michigan Behavioral Resource Manual 8 Version 1.0

11. Measure Cost

$6.77 per measure (i.e., cost to deliver the report to one participant for one year)

12. Any Recurring Cost

There are no recurring costs associated with this measure.

13. Relevant Codes and Standards

There are no relevant codes or standards associated with this measure.

14. Ongoing EM&V, Research, and Calibration Planning

Year 8 savings will be submitted for inclusion in the 2020 Michigan Behavioral Resource Manual.

15. Sources of Information

U.S. Department of Energy, “Chapter 17: Residential Behavior Protocol,” in The Uniform Methods Project: Methods for Determining Energy Efficiency Savings for Specific Measures, 2015. Accessed 22 March 2017, https://energy.gov/sites/prod/files/2015/02/f19/UMPChapter17-residential-behavior.pdf.

SEE Action Network, “Evaluation, Measurement, and Verification (EM&V) of Residential Behavior-Based Energy Efficiency Programs: Issues and Recommendations,” 2012. Accessed 22 March 2017, https://www4.eere.energy.gov/seeaction/system/files/documents/emv_behaviorbased_eeprograms.pdf.

SEE Action Network, “Insights from Smart Meters: The Potential for Peak-Hour Savings from Behavior-Based Programs.” 2014. Accessed 22 March 2017, https://www4.eere.energy.gov/seeaction/system/files/documents/smart_meters.pdf.

16. Attachments

Attachment A: “How to Count Behavioral Savings in Michigan”, presentation given to Evaluation Collaborative on July 17, 2012

o File Name: Attachment_A_HER_Program_Year 1_July_2012_Final.pdf Attachment B: MEMD Year 2 update slides

o File Name: Attachment_B_HER_Program_Year 2_Updated_12_Month_Data_5-29-13_FINAL

Attachment C: MEMD Year 3 update slides o File Name: Attachment_C_HER_Program_Y3_Values_5-29-14_Final.pdf

Attachment D: MEMD Year 4 update slideso File Name: Attachment_D_HER_Program_Y4_Values_final.pdf

Attachment E: MEMD Year 5 update slides.pdfo File Name: Attachment_E_HER_Program_FinalY5_Values.pdf

Attachment F: MEMD Year 6 Workpapero File Name: Attachment_F_MEMD_HER_Program_Y6_Workpaper.doc

Attachment G: “Custom Measure M&V Protocol: PPL Electric’s Opower Energy Education Program,” as approved by GDS Associates under Pennsylvania’s Act 129

o File Name: Attachment_G_CMP_Behavioral_PA-08-2010.pdf Attachment H: Allcott, Hunt. 2011. “Social norms and energy conservation” Journal of

Public Economics.Michigan Behavioral Resource Manual 9 Version 1.0

o File Name: Attachment_H_Allcott_Social_Norms_and_Energy_Conservation.pdf Attachment I: Navigant Consulting, Inc. 2015. “Behavior Modification Report Model

Calibration Study”o File Name:

Attachment_I_Behavior_Modification_Report_Model_Calibration_Study_May_2017 Attachment J: Steward, James (Cadmus) and Pete Cleff (PPL Electric). “Are You Leaving

Peak Demand Savings on the Table? Estimates of Peak-Coincident Demand Savings from PPL Electric’s Residential Behavior-Based Program.” AESP Working Paper, 2014.

o File Name: Attachment_J_Are_You_Leaving_Peak_Demand_Savings_on_the_Table.pdf

Michigan Behavioral Resource Manual 10 Version 1.0