Item 3. TARA presentation on TGS Efficiency Programs — original pdf

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PROGRAM BENCHMARKING, COST EFFECTIVENESS TESTING, AND BEST PRACTICES RECOMMENDATIONS OF TEXAS GAS SERVICE (TGS) ENERGY EFFICIENCY PROGRAMS PRESENTED BY ADM ASSOCIATES, INC. TO THE RESOURCE MANAGEMENT COMMISSION NOVEMBER 17, 2020 1 PRESENTATION OUTLINE  ADM Background  Natural Gas Utility Benchmark Research  Cost Effectiveness Review of 2018 TGS Programs  Evaluation, Measurement, & Verification (EM&V) Best Practices  TGS Customer Survey 2 ADM BACKGROUND ADM Associates, Inc. • Founded in 1979. • Longest-running energy evaluation firm in the United States still operating under its founding leadership. • Areas of expertise include: • Energy efficiency program evaluation; • Demand response program evaluation; • Process evaluation; and • Planning and regulatory support. 3 NATURAL GAS UTILITY BENCHMARK RESEARCH Overview • Natural gas utilities that were selected for the benchmarking study share common factors with TGS such as natural gas annual sales, customer demographics, conservation program tenure, regulatory guidelines, and similar climate zone. • Twelve utilities were contacted; a total of 6 utilities, including TGS, participated in the interview about their programs and current practices. • Five out of the six utilities are in the southwest or west coast regions. One of the six utilities is located on the east coast. • The utilities interviewed allowed for benchmarking of the most critical TGS Program attributes. 4 NATURAL GAS UTILITY BENCHMARK RESEARCH Program Attributes of Benchmark Utilities • Most utilities that were interviewed offer residential appliance, low- income weatherization, residential new construction, low-flow water- saving device, and commercial programs. • Several utilities offer mid-stream appliance programs, or mid-stream commercial food-service equipment programs. • Most utilities have a third-party program implementor for commercial sector programs, but not for residential sector. • Most utilities have strong trade ally networks. • Some of the natural gas utilities partner with the electric utility in the service territory to market programs and provide improved services and rebate offerings. 5 NATURAL GAS UTILITY BENCHMARK RESEARCH Research Findings • Partnership with Austin Energy continues to be beneficial when marketing and implementing the programs. Utilities interviewed noted that working with the electric utility in the same territory will provide customers with more rebate options and better services. • Having a third-party implementer is common among natural gas utilities, and third-party implementers help utilities with a range of activities including program implementation, data tracking, marketing, and engineering savings calculations. • Flexibility and simple processes in the rebate application process have helped utilities achieve success in terms of reaching savings and program participation goals. 6 NATURAL GAS UTILITY BENCHMARK RESEARCH Recommendations • Continue to explore opportunities for collaboration with the electric utility to help market the programs, provide improved services, and provide rebate offerings. • Continue to offer flexibility in the rebate application process and explore additional ways for customers to participate in the programs. • If pursuing a food service equipment pilot program, consider offering a midstream delivery channel as well as a traditional rebate application process. • Consider implementing a residential midstream appliance program which can connect the utility with local retailers and result in customers purchasing more energy efficient equipment as well as enhancing relationships with local retailers. • Consider building or enhancing existing trade ally networks to improve program marketing efforts. Trade allies often interact with customers and can be beneficial by promoting program offerings. 7 Research Findings COST EFFECTIVENESS REVIEW • Overall, the TGS outside expert and ADM cost effectiveness results were consistent and closely aligned. • TGS outside expert appeared to use reasonable assumptions for incremental costs and equipment effective useful life (EUL). • A review of tankless water heater installation costs for TGS and other utilities revealed that TGS customers had paid similar amounts for the purchase and installation of tankless water heaters. • TGS incentive amounts for rebated tankless water heater installations appeared reasonable based on a comparison with Arkansas Oklahoma Gas Company (AOG), Black Hills Energy Arkansas (BHE), and CenterPoint Arkansas and Oklahoma (CPA & CPO). 8 TANKLESS WATER HEATER INCENTIVE AMOUNTS COMPARISON Equipment Type TGS AOGC BHE CPA &  CPO Residential Tankless  Water Heater Commercial Tankless  Water Heater $650 $500 $300 $900 $600 $500 $300 $500 9 COST EFFECTIVENESS COMPARISON – 2018 PROGRAMS TGS Program Commercial Appliance Commercial Direct Install Commercial Sector Total Residential Home Improvement Residential Space Heating Residential Water Heating Residential Dryer Residential Natural Gas Vehicle Residential Low-Income TGS Outside  Expert ADM PACT/ UCT PACT/ UCT** Net TRC  Benefits Net PACT/UCT  Benefits PACT/ UCT 5.81 4.45 1.96 0.75 0.41 1.88 TRC 8.38 4.28 2.00 0.59 1.21 2.57 6.99 4.18 1.95 0.41 0.28 1.39 $187,056 $204,242 $547,373 $537,551 $734,429 $741,793 ‐$6,158 $30,833 ‐$57,781 ‐$249,054 $321,298 $96,372 2.58 2.40 2.23 2.23 $577,153 $490,254 0.00 0.00 0.00 0.00 $0 ‐$2,000 0.08 1.46 0.07 ‐$7,549 ‐$250,927 TRC 7.42 4.45 1.99 2.57 0.55 0.67 1.42 0.00 1.28 0.78 1.11 1.24 6.99 4.18 1.95 0.41 0.28 1.39 0.07 0.54 0.69 0.97 Residential New Construction 0.46 1.23 0.54 $76,343 ‐$330,133 Residential Sector Total Portfolio Total 0.80 0.98 1.25 1.42 0.69 0.89 $991,920 ‐$303,269 $1,726,350 $438,524 ** Portfolio Total PACT/UCT ratio excluding Low‐Income Program. 10 COMPARISON OF TRC BENEFITS Residential New Construction Residential Low Income Residential Natural Gas Vehicle Residential Dryer Residential Water Heating Residential Space Heating Residential Home Improvement Commercial Direct Install Commercial Appliance ADM‐Calculated Benefits Outside Expert‐Calculated Benefits 11 COMPARISON OF PACT/UCT BENEFITS Residential New Construction Residential Low Income Residential Natural Gas Vehicle Residential Dryer Residential Water Heating Residential Space Heating Residential Home Improvement Commercial Direct Install Commercial Appliance ADM‐Calculated Benefits Outside Expert‐Calculated Benefits 12 COST EFFECTIVENESS REVIEW Recommendations • Consider lowering the incentive for residential replacement and new construction tankless water heaters; a reasonable starting point for rebate adjustment would be in the $500 range. • Consider partnering with residential contractors who perform tankless water heater installations; this would help promote the program and further educate contractors and customers as well as increase participation in the water heater program. • Increase participation in the commercial direct install program to help improve overall portfolio cost effectiveness; focus could be on steam trap equipment replacements. 13 EM&V BEST PRACTICES Impact Evaluation Best Practices • Develop EM&V plans; • Review program materials and tracking data systems to support client deliverables; • Develop samples for field EM&V and impact analysis; • Collect on-site survey and EM&V data for sampled projects; • Develop simple engineering algorithms for non-weather-sensitive measures and programs with smaller impacts, drawing on deemed savings values (as appropriate); • Develop building energy simulation models for weather-sensitive measures within high impact programs (as appropriate); • Perform billing analysis (as appropriate); and • Present impact evaluation findings through written reports. 14 IMPACT EVALUATION ACTIVITIES 15 Process Evaluation Best Practices EM&V BEST PRACTICES • Providing feedback for the programs from the perspective of customers, trade allies, program administrators and other stakeholder groups. • Performing market research to support program decisions about measures to offer, markets to target, and program implementation strategies. • Providing actionable findings and recommendations that can positively impact the utility’s programs. 16 TGS CUSTOMER SURVEY Overview of Survey Effort • A total of 200 customers were surveyed about TGS’s residential rebate programs. • One hundred eighty of the survey respondents were deemed non-low- income customers. Twenty of the survey respondents were low- income customers. • ADM asked about household size and income level to determine if a respondent was at or below the 200% Federal Poverty Level to determine low-income respondents. • All residential respondents interviewed had not participated in the rebate programs in the past five years and were considered non- participating customers. • A total of 15 commercial customers provided complete responses to the survey • Commercial customer have not participated in the programs in the past three years and were considered non-participating customers. 17 TGS CUSTOMER SURVEY Research Findings • Generally, customers are not aware of the rebates provided by TGS. For residential and non-residential customers, over fifty percent of respondents were unaware of the rebate programs offered. • The majority of residential customers who had learned of the rebates or services learned of them through email or mail sources. • Most of the non-residential customers who knew about the rebates learned about them through informational brochures and the TGS website. • The majority of residential customers were interested in getting additional information on energy savings tips and energy efficiency rebate programs. • Generally, non-residential customers have not upgraded or replaced natural gas equipment in the last three years and do not expect to receive a rebate from TGS for future replacements. 18 PROGRAM REBATE AWARENESS AND INTEREST IN ENERGY EFFICIENCY – RESIDENTIAL CUSTOMERS Response Yes No Response Very Interested Moderately interested Slightly interested Not at all interested Percent (n = 175) 27% 73% Percent (n = 116) 26% 39% 23% 12% 19 MEASURES INSTALLED WITHOUT A REBATE – RESIDENTIAL CUSTOMERS 20 INTEREST IN HOME’S ENERGY EFFICIENCY – RESIDENTIAL CUSTOMERS 21 TGS CUSTOMER SURVEY Research Findings – Low-Income Customers • Smaller sample size compared to overall residential survey population (n=20). • Overall, similar findings to residential survey population. 22 HOUSEHOLD SIZE AND INCOME – LOW-INCOME RESIDENTIAL CUSTOMERS Response Percent (n=20) Response Percent (n=20) 1 person 2 people 3 people 4 people 5 people 6 people 8 or more people  5% 30% 20% 25% 10% 5% 5% $10,000 to less than $20,000 $20,000 to less than $30,000 $30,000 to less than $40,000 $40,000 to less than $50,000 $50,000 to less than $75,000 35% 15% 25% 15% 10% 23 PROGRAM REBATE AWARENESS AND INTEREST IN ENERGY EFFICIENCY – LOW-INCOME RESIDENTIAL CUSTOMERS Response Yes No Response Very Interested Moderately interested Slightly interested Not at all interested Percent (n = 18) 11% 89% Percent (n = 19) 42% 26% 16% 16% 24 MEASURES INSTALLED WITHOUT A REBATE – LOW-INCOME RESIDENTIAL CUSTOMERS 25 INTEREST IN HOME’S ENERGY EFFICIENCY – LOW-INCOME RESIDENTIAL CUSTOMERS 26 TGS CUSTOMER SURVEY Research Findings – Non-residential Customers • Small sample size (n=15). • Overall, low rebate awareness among surveyed businesses. 27 BUSINESS TYPE AND OWNERSHIP –NON-RESIDENTIAL CUSTOMERS Professional Services (Office) Grocery/convenience store Industrial/manufacturing Response Restaurant Healthcare Lodging Other Percent (n = 15) 33% 20% 7% 7% 7% 13% 13% Response Own and occupy the entire building Own the building and occupy part of it  while leasing part to others Lease the space Percent (n = 15) 13% 20% 67% 28 PROGRAM REBATE AWARENESS AND DECISION-MAKING ABILITY – NON- RESIDENTIAL CUSTOMERS Response Yes No Response Make those decisions Provide input to others who make  those decisions  Percent (n = 13) 38% 62% Percent (n = 15) 60% 40% 29 EQUIPMENT PURCHASE IN 2019 AND 2020, AND LIKELIHOOD OF SCHEDULING FACILITY WALK-THROUGH – NON-RESIDENTIAL CUSTOMERS Response Yes No Response 1 – Not at all likely 2 3 4 5 – Very likely  Percent (n = 10) 20% 80% Percent (n = 14) 21% 7% 43% 15% 14% 30 TGS CUSTOMER SURVEY Recommendations • TGS should increase marketing of equipment rebates due to the low level of rebate awareness that customers reported. • Marketing should be aimed at residential customers due to their interest in energy efficiency programs and actions. Contacting these customers can best be done via utility bill inserts, the utility website, or email communications. • Since respondents have been purchasing and installing natural gas equipment, TGS should consider implementing a midstream program. Conducting a midstream program can connect the utility with local retailers and enhancing that relationship, as well as resulting in customers purchasing more energy efficient equipment and raising customer awareness of TGS programs. • All non-residential customers who responded stated that they have not upgraded natural gas equipment in the last 2-3 years. This could be due to a lack of energy efficiency education, or lack of outreach by the program implementor. 31 QUESTIONS OR COMMENTS? 32