The URL can be used to link to this page

Home My WebLink About0130.093.' ". " "I ! i - January 21, 1993 HONORABLE CIT¥ COUNCIL Palo Alto,. CA Ilfctric oeaan4-Si~. x~agement (PSM) Pilot Programs Members ot the council: Report 1ft Briet 7 In Accordance with its budget objectives, the Vtilities Resource Management staff has developed several pilot electric Demand-side Manaqement (OSM) programs to begin implement,ing this fiscal year. The qoal of these conservation incentive pilot programs is to evaluate the effectiveness of different program tactics and technologies. successful pilot program efforts will likely lead to full-scale program implementation in the years ahead~ On the recommendation of the Utilities Advisory Commission {UAC) , (minutes attached), Counc~l is req4ested to review and approve tl'le following two pilot-scale programs: 1) cog.erclal Lis1:tt __ :i:.ng :Incentives -targeting both new construction and planned replacf.!mel'~t within existing construction. 2) R.si4.1l~1_.1 Compact rluores~Qnt L&lIP ICFL) Inee~_~J_ve. - targeting planned replacement in existin~ construction. staff intends to begin implementation of these programs, as approved, in early February 1993. 'l'he follo·wing report descri!::les these programs in greater detail and places the~ in the conte~~ of the Electric Integrated Resource Plan (IRP) and future pilot scale program development. FUnds for these programs and all other pilot programs plann~d for FY 92-94 total $1.3 million and are already in the Resource Management Divisionis approved bOl<1get. Backgro\p),~ A 1992 OSM Report~ approved by the Utilities Advisory Commission in March 1992, identifisd and ranked technoloqies in terms of their potential for saving both money and electricity for Palo Alto residents and businesses. That report also outlined a procedure for conducting t~o years of test prDgrams, to learn as CKR:130:9l L , ~. , - .. -.. -.. ----~---... "" ..... -.~ . .,..-.-~ .... "'"~,,-_. .""" much as possible ~o~t the performance of these technologies and the bes~ program tactics for getting these energy efficiency p:x~jects implemented. Funds .. ere budgeted tor F'i 92-94 to carry out these concepts. Meanwhile, the 1992 electric Integrated Resource Plan (!RP) was completed. (S~e related informational CMR in this packet). The IRP e..,alu~ted tt~e relative costs and be!'.efits to the Electric Utility of using various supply and demand-side resources to meet future electric needs. Through the IRP process, the specific programs, technologies and associated levels of electric energy savings, vhich were most economic for the utility to pursue, wer~ identified along with the appropriate timeframe for programs to be implemented. Staff then determined the priority oreer for pilot-testir.g technoloqie5 and progranls. During the next two years~ in addition to oper~ting pilot programs,. staff 'Will be conducting 1) val"io'..ls types of mar:ket and technology research, 2) lI!ore detailed analyses of other utility programs and 3) reviewing and fine-tuning program evaluation .ethods. This parallel research will serv~ not only t~ enhance the lesson. staff learns from the pilot programs about achieving quantifiable savings, but ~ill also help corroborate or modify ~any of the OSK assumptions that went into the initial IRP development. pi8cny.aipp. The following descriptions indicate those program components staff intends to implement beginning in February and which, therefore, need review and approval at this time" staff has used the heading -future directions· to indicate v~riations, expansions, and ne~ proqrams that are likely to be presented for approval during the course of calendar }Oear 1993. II!~IW<' COXKBRCI~!!'1'ING UlCJl!TlVES Objective.: The concept behind this program is to m~tivate customers to install new or replacement lighting technologies that are more efficient than that which would have otherwise been selected. In the case of ~eplacement projects, even ~ithout City incentives, customers ~ould inevitably increase their lighting efficiency given the improved products now on the market. In the case of major remodel and new construction, projects must meet th~ state of California's Title 24 energy standarcs regardless of an}' utilit)" program incentives. This pilot p:::ogram is designed to encourage an incr .. ental iaprovaaent beyond the increased efficiency these projects would have achieved anyway under Title 24 standards. ~ I i I 1 I I - Additionally, this pilot progra~ is beinq operated to assess: ( 1) (2) (3) The most effective point(s) fo~ intervenin9 in the new construction 0= remodeling process decision, purchase and installation; The relative effectiveness of rebate$ and design assistance in motivating customer action; The different dynamics affecting interest in, and acceptance of, the new technologies, based on the customer's business size and type; (4) Any barriers to customer liqhting efficiency improvements that have not yet be~n addressed; (5) (6) 'rhe on-site performance of specific technology packages in terms of product quality, energy savings achieved and the persistence of tho~~ savings; and The more cost-effective means of program a~inistration and marketin9~ ryp •• ot Ipcentives: Rebates that t}~ically cover 40 to 80 percent of the cost premium for proven state-of-the-art lighting measures will be paid to customers upon verification of i~tallation of specific high efficiency lighting improvements (e~g. T-S lamps and electronic ballasts,. Rebate levels will match PG&E'~ incentive levels wherever appropriate, and a per customer maximum of $50,000 will be established. Rebates may also be paid directly to suppliers/installers of a project, so that ~~~e customer only has to budqet funds for their final share of the project cost. Additionally, lighting design and installation professionals will work under contract to the Utilities Department to provide customers and/or their architects with assistance in preparing and analyzing lighting alternatives, especially in new construction~ f.Kget Market: The program ·",ill be directed towards all commercial and industrial customers who have new construction projects or plans to replace lightinq equipment. 'I'he program focus is on influencing the choice of lighting equipment installad in these projects. Since the rebate amount is based on acrMptal rather than full cost, it should rJot be sufficient to motivate a custower to initiate an ~u~planned" retrofit project. CIIIt: 130.93 - The marketing m3.t.erials used and the frequer::cy of outreach ""ill vary depending on customBr size an~ type of business. In addition to direct marketing, staff ~ill ~ork closely with local architects, builders and the City Building and Planning divisions to identify customers who are undertaking projects tor which the rebated technologies may be applicable. PUr&tloDi The program in its Ntest phase-is slated to beqi~ in February 1993 and continue through December 1993, althnugh there may he modifications made sooner if interim evaluation indicates ~iey are warranted. Since nev construction and planned replacement situations represent lost opportunities in the absence of a program, our intent will be to transition as quickly and directly as possible into an ongoing full-5cale program. KqDitoripq &DO zvaluatioD; Monitorinq and evaluation pla~s are b9inq ca~efully developed_ since evaluation is con~idered critical to the success of the pilot programs as learning expe-rieilces. A COmbination of methods 'Will be used. Engineering estimates will be tha primary method for analy~in9 savings impacts. These estimates ~ill ~e calibrated by sampled end use mete.rinq of consumption and operating hours for randomly selected program participants. Persistence of savings will be addressed by follow-up site visits and phone surveys on a sample group of program partiCipants. CUstomers who participate in ~~e program will agree to the possibility of pre-and. post-inspections as a condition of receivinq the incentives, even thouqh such inspections vi!1 not be par formed in every case. Surveys of partiCipants and non-participants will be used to assess customer avareness of, attitude towards, and satisf~ction with, the technologies being promoted. End-use surveys, telephon'l! surveys and focus qroups have already been conducted to help staff identify three benchmarks for bo~h customer perceptions about technologies and the existence of state-of-the art installations. Compre.hensive data bases viII be used to track th~ program components in order to evaluete the efforts. Tutu;. Dir.etioAn Late-r in 1993, the ligtltlng rebate program will be expanded to offer incentives for cooling and motor technologies as well. Incentive mechanisms other than rebates will also be tested. Some mechanisms staff is currently exploring include loans, buydown of bank loan interest rates, shared savinqs contracts and utility-financed demonstration sites. Through the Northern California Power Agency, Palo Alto will likely be contracting ~ith selected Energy Services companies to implement shared savings projects. CIIlI. 13 0: U 1 i PROQRAI; &lGIDEHtIAL COMPACT rLpORESCENT LAMPS (C7L) INC!~l~ Obi.etiy •• , A primary objective of the pilot program described below is to evaluate ", .. hether cllstomers are more motivated by up front cost savings (rebate), verification -eh3.t the techl'!.ol?qy is acceptable (30 day guarantee), pre-selection of products {utility bUlk buy} or spre.ading out costs (payment plan). The prilSlary objective of the point-of-purchase program, also described below, is to evaluate the ~ost effective ways retailers can be encoura~eQ to stock larger varieties of CF~ and to determine whether demand for CFLs changes due to increased availability. Both proqrams are designed to raise general awareness of CFLs and to stimUlate the retail market for them. Also through the programs, staff hopes to get better information on customer satisfaction with CFLs, persistence of CFL savings and whether there are ~snap back" effects (i.e. people leaving lights on longer becau!=e the n"!w lamps "don't -Ilse much energy'"). An assessment of the most cost-effective means to market and administer the program ~ill be made. Different delivery mechanisms will be piloted, including delivery during audit, and delivery by service groups, contract workers or mail service. Typal of tnc'Btivee: A htwo option-pilot program will be offered for a faw months and ~ill be followed by a 5econd "point of purchase-program. prior to and throughout the incentive proqrams, an active local retailer educdtion campaign will be ~aged to increase the variety of lamps stocked and the knowledge of sales staff. In the two-option program, a random sam~le of residential customers will be offered the choice of either 1) using a rebate coupon to get a fixed amount back if they purchase up to two ~lalifyinq CFLS or, 2} purchasing up to two CFLs from a selection the Utilities Department has bulk purchased. In this latter option, the CFL would be paid for through the utilities bill either in 1) one payment immediately, 2) one payment after a on~ month trial period or 3) a fe~ monthly installments after a ana ~onth trial period (interest fre~). The trial period allows for a 30-day satisfaction guarantee. . In the point-of-purchase program, various strategies will be used to encouraqe local retailers to stock CFLs. These strategies include special p,omotional events and providing selected products wholesa!e to retailers at subsidized cost, on consignment OT under guaranteed buy-back agreements. Additiona~ m~rket research conducted with local retailers will help staff determine the order and nature of the strategies implemented. ex.u 130:t3 • - Target Kark.t: This p~oqram hopes to reach single and multi fllmily residcn-cial Cl\sto!'lers~ 'Who hav~ never tried modern CFLs or have been discouraged in their .!'I.ttempt to use them. Educational information about CFts ~ill 90 out through the utilities bill. Hate~ials about the two-option program will be 4vailable only to a randomly e.e:J..ected qroup of rasidents through direct mail; while the point-ot-purchase program will De ~3rketed to all residents. ~~ ~ne basic ~t~o option program~ will be made available for two to three mont!lS during the February thL'Ollgh .April time period, based on customer interest. The point-of-pu~chase component is planned to start in early spring. Modifications will be made as soon as onqoing evaluation indicat~s they are warranted. Based ~n the lessons learned from these pilot programs and their variations, larger scale programs could be launched by late 1993. Iyaluatiop: Every program participant and participating merchant will be asked to complete a Drie~ survey to indicate what motivated them to participate and whether they were satisfied with the CFLs. Follow-up 6urveys and randcm inspections will be performed at regular intervals on a sample of participants, to assess both custODer acceptance and persistence of s~vinqs. 1ni tial proqram savings calculations will be based on engineering estimates, corroborated by post-installation surveys and random monitoring ot operating hours. The cost-effectiveness of the various lamp delivery mechanisms also will be evaluatsd. Additio,nally, surveys will assess the reasons 'Why some targeted customers may choose not to participate ~nd whether any non targeted customers purchased CFLs without gettinq an incentive. tutu._ Direction5j Two major hurdles to greater penetration of CFr.s into the residential market are their unavailability and their higher up front costs. To this end, concepts beinq pursued for mid-1993 include 1) incentives to distributers to reduce wholesale costs to r~tailers who agree to pass on th~ savings to customers and 2) publishing lists for custom6rs of retailers carrying specified products and point-vf-purchase support materials. Ho~es may be sel~cted as damonst~ation sites for ne~er technologies that may apply to this market (motion sensors, hard-vired fixtures, specially-designed table lamps, etc.). Fox Eid-~99J. a refrigerator rebate program is being designed to en~ouraqe residents who a~e replacing burned-out refriqerators to buy the hiqhest efficiency new models. This progra~ will be very ClOt. 130. U · . similar tc the one run by the Electric , Gas Incustries Association for PG&E. In 1994, incentives will likely be offered for other hiqh efficiency appliances including electric ~3shers, dishiiashers, dryers and freezers. w~ter and space heating retrofit in~entives for el~ctrically heated homes are planned for la.te 1994 or early ~99S. {This program may include incentives for fuel switching from electric to gas ~here appropriate.) R.ao .... ndati"mJ_ staff requests that the Council approve the commercial Lighting Incentive program and the Residential compact Fluorescent Incentive program as described above for implementation. Staff will return to Council when these pilot proqrams have been evaluated, when any new pilot proqrams are ready for i.plementatlon and when any pilot program is being proposed for full-scale i~plementation. Respectfully submit tad , Ci?::::z~ M~naqer, Resource Conservation ~£-.~ Richard L. young Director of Utilities ~lUlI.d' ~u~~e~i~ City Manager Attachment: Excerpt UAC Minutes (12-2-~2) CKR:130&:'Il , . r • f" , ~ , .. • 0 EXCERPT fro. XIIWTEB (If utilities A4vi~~mmi •• iQA •• dcas4ay, Oecaaber 2, 1992 Chairperson Grimsrud called the meeting to order at 7:30 p.m. in the City Council Conference Room, 250 Hamilton Avenue, Palo Alto, california. Roll call PRESENT: Grimsrud, Vejtasa, Eyerly, Hoffner, SutoriU5, ABSENT: None COUNCIL KEMSERS PRESENT: Cobb, Rosenbaum lev pax Proaram pr~sa18 Debra Katz, Resource Conservation Manager, said the development of the OSH proqrams was a team effort involving much hard, efficient work. The goal for the pilot efforts .. as to learn how best to aChieve the kind of energy savings Palo Alto -wanted to achieve. The emphasis was on hoy best to do so. Flexibility was one of the watch-words, and learning was the prime objective, not the energy savings the.mselves. staff wanted to understand how and why it attained savings and -whether it did so in the most effective possible manner. The pri~ary goal when programs went full-9~ale lriou1d s3vinqs, while continually learning 'Would be a secondary goal. Peter Govea, Resource conservation Program Coordinator, was pleased and proud to present the Commercial Lighting Program which was a compil~tion of much work do~e by statf over five months. Staff sought UAC endcrsement and recommendation of its plar. for Council adoption which would take place in Januarj 1993. tl) Program Basis: As in the Ele~tric IRP, staff's goal was to capture lost opportunities in terms of Replace on Burnout (ROB) and new construction by having a program in place 'Which provided adequate incentive to encourage the customer to adopt proven state-of-the-art (BOA) lighting technology in place of available minimum standard options. \ (2) (3 ) Program Pr-Q9.r.H_ll.2.n~ 1't~e progression relat.ed directly to the IRP~ Staff tried to select program elements and develop1l'ent in 't.ccurdance ...-i'th tl:1.e greatest number of opportunities and magnitude of impact. Therefore, focus would. begin on indoor lighting, shifting to H'V'AC and outdoor liqhting. Existing construction, planned replacement projects, and new construction components .. ould be examined. The two methods of compliance with the current energy code were a prescriptive and a performance method. Staff hoped to develop a program which 'Would specifically addr~ss either of those compliance ~ethodoloqies which projects CQuld use. ~: Goals were primarily learning-oriented during the pilot phase. Staff hoped to enhance customer awareness, as 'Well as lighting desiqners and vendors of pt.'oven SOA technologies. staff vanted to assess viability for incen tive and Cielivery mechanisms, initially focusing on a rebate-type tactic. Depending upon staff's ability, alternate incentive mechanisms .. auld be researched { e.g. low-interest rat€ loans or utilizing an NCPA contractor for shared savings efforts. Through operation of ~he proqr~, staff would de-terlbine 'Whether il'lce~tive levels were adequate (i.e., ~hether it had made a good enough offer), whether it reached the right people, ~tc. Staff wanted to ~esearch large and small comnercial market segDlents by business classificat.ions, e.g., restaurants, retail, hospitals, etc., to determine whether thA tactics staff had developed encouraged or ~ere effective in obtaining a response from a variety of market segments. Staff also ~anted the ability to re-tool and refine DSM esti~ates tor the next Electric IRP. '4) Program overview: Staff focused on cost premium and rebates per item as opposed to per kWh or per-kW and proposed making payment by check or utility bill credit. Staff also considered the possibility ot a check payable to a designat ed third party allo~ing the customer to direct the utilities to pay a contractor or vendor directly. staff decid.ed, at least in the pilot phase, to match as clQsely a& pcssible the PG&E programs because PG&E had an extensive marketing program. PG&E bought media time in a manner ~hich Palo Alt~ could not hope to match, had been on the street for come time with thei r proqram, vendors were familiar with PG&E proqrans, ~ome Palo Alto customers had facilities in PG&E's service territory and had experience with the program, PG&E 'Was a large and increasingly proqressive util ity in the area of DSM, and had done work which staff could benefit from. Therefore r staff attempted to match or model its programs after PG&E ~ The pilot phase 'Would run trom February through December 1993. The SOA technologies statf would promote included compact fluorescent lamps (CFLs) , T-8 fluorescent lamps, electronic ballasts, halogen lamps. and exit sign tw::: 12/02/92 -'-"'''''-," "'&7'-1-Irs" • i I I I i j 1 • - ( 5) conversions, all of vhich hac! "'ide5pr~ad ~_pplicability within Palo Alto's service area. ~.ing ApprQach: In the: existiT'lg construction areal the planned replacement and ROB projects ..-ould be marketed directly to the customers and would target vGrious market segments I which ~ould oe handled ~ostly by stdff~ In the new constructioJ". area, the targ€t audience included primari ly architects, designers, and developers, 'With :ma~)cet:tn9 more project-oriented through the ARB and pe:cmit p[·ocesses. With new co.nstruction, :narketing would primarily be. done via a contract lighting designer that would be sel~cted through an RFP process. The initial focus w~s on existing construc tion, ad~in9 the ne~ construction c~mpo~ent as quickly as a lighting designer could be hired. (6) Evaluation Approach: Enough emphasis could not be placed on L~e importance of evaluating the programs and staff did not 'Want to oversimplify evaluation. The major tech!1iqu09S staff intendad to use included heavy emphasis on engineerinq estimates, obtaining industry averages ~henever possible so staff was not reinventing the wheel. Statf intended to use sampled end-use~ monitoring primarily operating hours, and survey customers 't:o ascertain aspects of retention. The process evaluation would focus on hoW' the program went, staff implementation, customer paL'ticipation, smooth out rough edges, and streamline the operation. Information would be qa~hered through surveys and focus groups. commissioner Vejtasa asked whether a shortage of electronic ballasts would pose a problem in implementing the pilot p~ogram. Mr. Govea said the backlog in terms of order time for the ballasts had been reduced~ staff would encourage customers to apply for Palo Alto's program at a time when they could co~plete the project within a four-month time frame. If a customer af".ticipated difficulty in aC~Jiring equipment, staff ~ould ask the customer to defer its application to a tim~ when work could be completed ~ithin the four-month tine frame a Staff had no direct plans to address the backlog ordering other than to make customers aware of the situation and ascertain realistically wha~ it wasa Commission~r vejtasa encouraged staff to have information available for the customers. Mr. Govea said delay vas ~ost critical in new construction. ROB tended to indicate a failed piece of equipment. It also could be a planned obsolescence~ Realiz.ing that within six months an item would require replacement, customers could p.lan ahead, allowing time to deal with a backlog of ordering not possihle in new construction. comnissioner vejtasa' s point was well taken and staff ~ould attempt to have information available. Page 3 ~-! r~:i'fd"L f'~~~< .; __ ... _ ... ~...,.'--= "-,0", Chairperson Grimsrud asked whether staff ~ould coordinate ~ith the Building tiepartl'lent req3rdinq new building penuits, etc., 'When dealing with infrastructure within the City. , ! Mr. Govea said the Utilities Departmen~ and the Planning Department ~ere in th~ process of determining how best to notify utilities staff o! potential projects without .:;::reating problems for the Planning Department. Once a project entered the pel~it staqe J it \las normally too late for Utilities staff to impact a prcjEct unless it involved a direct sUbstitution. change oreers co,Quld be very costly. Staff ~as attempting to determine ways of finding out about a project well in advance of the permit application. Staff would attempt to have a c.redi~le presence in the archi t!:!ctural ar~na, making 2ugqestions early enough to be considered realisti cally within the design time frame. Utilitie-s staff ... ould definitely work 'With buildinq staff. Chairperson Crimsrud asked whether staff considered using Channel 16 or Channel 6 to inform both residential and co~ercial customers similar to PG&E's me~ia time. Mr4 Govea said staff had .;considered fer the res.idential proqram using Channel 6 as an <. tlet for proqrtl.m notification. other considerations 'Were direc .... mail or sponsc::inq vorkshops to inform customers about the program4 com.issioner sutor ius asked ho'''' things divvied up since $0. S million existed in the 1992-93 Budget for the two DSK p=oqrams. Ms. Ratz sai~ each of the two programs had different components, so many activities :might exist under one program umbr-ella4 It was di:f.!icul t to det~rmine how many program componen':.s would occur within a single fiscal year. One consideration was how programs progressed after ~hey started. A program which did not work might get modified, creating the question whether it would be considered a new p~ogram or the same proqram. The breakdown that 'Was in the DSH report o.! how staff would spend the dollars was still valid. To take advantage of lei31_rninq oppo~lJ!'lities and react q'..lickly to needed changes, flexibility in spending .. as required. From the perspective of a two-y~ar pilot effort, staff 'Would probably fully utiliza the total amount of the two-year budget requested. Commissioner sutor ius asked the cost of the two-year proqram. Ms4 Katz replied $1.3 million, the majority of which were incentive dollars, one of the most variable cost elements. Participation would be one of the biggest factors in determining how much money was spent. A sizable amount was budqeted for evaluation j one of the determinants being which evaluation activities staif undertook as opposed to hirinq contract help. U1IC:12/02/92 commissioner Hoffner eosked whether item6 had beer.. piloted else ~here, e.g., PG&E programs, and asked ~hether Palo Alto would pilot a program which was alread:,--on the stre€'t through PG&E. Ms. Katz said staff was piloting program aspects that differed from other proqrams. Although ancther utility was n:.nning a similar program. differences existe:d 'Within Palo Alto's territory which required different assumptions or program components. c01llJ:l.issioner Hoffner aSKed whether staff contemplated adopting PG&:E proqrams without going thrcugh a pilot. Ms. Katz replied probably not j n the near future. Everltually, staff might have proqram plans, especially as experience .,as qained, 'Which 'Would not require much testing. But it would bi; several years before staff would be able to detennine how the public would respond to various mechanisms, know how vendors worked, and knew the different systems. Commi.ssioner Hoffner a::;ked whether staff restricted vendors to those within Palo Alto City limits or vent to a broader area. Ms. Kat~ said staff was working with the City Attorney'~ Office on requirements as oppo~ed to 'What staff wanted to de. The goal was to get products to customers, so it 'Would not maKe sense to refuse to use suppliers or distributors f1:'om greater reaches. On the other hand, there 'Was value to stimulatinq the local economy which provided benefits to local supplie!'"s, etc. It .. ould vary by technology and the proqrams. Staff did not want to unfairly restrain trade. In the past, anyone ""ho advertised in the palo Alto telephone directory was offered the chance to be on suppliers' lists, etc. Staff liked the idea of providing local vendors with as much business as possible. commissioner Hoffner asked whether staff had potential tax revenue consequences of the City product rather than being sold ~hTOUgh a ~erchaht considered purchasing vendor. the the Ms. :t::atz sa5.o the city was required to pay taxes: on merchandise purchased. Commissioner Roffner asked whether tax consequ(!l"lces on the City had been considered. Ms. Katz said staff had nat really considered the tax aspect from the City'~ perspective, but had considered it fram the customer's per-spective as far as receiving a rebate in the torm of a check versus a utility bill credit to avoid taxable income problems. From the point of view of the tax base which the City had and how it 'Would be impacted, staff had not researched the issue. It was a good idea to at least look into the situation. tIlIC: 12/02/92 -----... --.~' '-~""""-"-, Linda Clerkson. Re~ource conservation presented the pr~ram pro,osals for the Program: Program Coordinator I Residenti31 Lighting (1) program Basis: The program. basis for residential .... as similar to commercial in capturing lost opportunities, i.e., people changed light b~lbs constantly and eFLs lasted considerably longer than regular bulbs. Promoting proven SOA technologies .... ould reveal how CFLs had been out for a long time and was the main technology which w~uld be pushed through the rasidential program. People .... ere still ten~a tive about trying the CFLs because ot the price, ho'Wever, staff wanted to show tlley were more cost;. effective than imaqined, lasted significantly longer, and reduced en~rgy use. (2) Program Progression: Focus would begin with indoor light ing. Later-it would move to appl iances, including refriger ators and freezers, l']si09 the ROB concept, getting decisions made at the poi!1t of pur-chase. Staff would focus cn existing construction first, then move into new construc ticn. Staff would attempt to get the edUcation and utility sponsorship going in an attempt to get people to understand the CFL technology. P} Program Goa.U: Staff wanted to en.l}ance awareness of SOA lighting, lncrease local availability of SOA liqhtinq products, which for residential was particularly important. Many residents shopped locally, so the lights needed to qet into the stores. Staff would assess the viability of ince.ltive and delivery mechanisms. With the C.?Ls, staff would attempt to modify eXisting utility industry programs to meet Palo Alto's neecrs. A leasing program existed on the East Coast and SMUD, charging 20 cents per month ~or five years.. But the incentive behind such a proqram was not appropriate for palo Alto because it was not an economically depressed area and technology '.as nOli more readily avail able. Staff ~ould test variations of other utility pro- 9~ams, and customer and vendor accept~nce of the program, e.g., were the vandors willing to work with staff, were they willing to ke~p the costs low so people would purchase the CFLs, ~ould the customer be motivated by oti,er rebates. Staff would also refine DSM resource estimates to determine ~hether savings were achieVed and whether people were keepi~q the CFLs installed. (4) Program. OVeryie ... : (a) payment Plan (lamp purchased fr9m utility> -Staff had modified the leasing program of other utilities to target people who were skeptical by providing a 30-day guarantee, buying in bulk to get a cheaper price for the customer. staff 'Would wcrk with the manufacturer or distributor to li1IC: 12/02/92 • • ~ . • , determine vhether returns ~ere possible. Staff thought the SO-day guarantee would allay the fears of some people. staft wanted to try the lease prcogram, but becduse (.If the current bill ing system j a five-year program of 20 cent paym~nts vas too cumbersome. Instead, staff would utilize three payments per u~ility bill, interest-free. Staff also wanted a program which woul~ reimburse the city, pcssibly with a revolving account to leveraq~ the ~oney fUrther. commissioner Sutor ius asked whether st~ff would deal in bulbs only or include the brackets and hardware necessary to convert the lamp. Ms. Clerkson said primarily bulbs, but harp extenders would be provided to assist in installation. It 'Was useless to ee11 CFLs which paople were unable to install. Tt,e goal was to he~p in any way po6sible4 One thing staff would not be doing extensively 'Was ·hard wiring. Many new fixtures could be installed in r-eside.nces vhich would not take anything but a CFL. It was not ~ major area of testing for the current ~ilot program. (bJ ~.e Coupgn (lamo purchased from retailer) -If a customer did not want the type of light selected by utili ties st.att, the customer could purchase their own lamp at the stor-e, discounted through a rebate coupon, credited through utility bill4 Staff wanted to test the options to determine ",hat customers would chose. Staff would test mailers which would allow the customer ~.:.o make the decision. (c) Point-of-Purchase -Staff attempted to determine what ~aG required to get CFLs into the stores, e.g., on consign ment, rebates with retailers, manufacturer rebates, etc. Sometimes price reductions were possible through lever-aging a $5.00 investment to a manufacturer or distributor. This would facilitate availability in the stores at a signifi cantly lower price ~ith a smaller mark-up. The goal was to get the products into the stores, available to the qe ',eral population, and lower the prices. Many utilities had conducted studies indicating if the cost ~as beloy $10.00, people .. ere willing to invest. It the cost was between $15.00 to $20.00, CFLs were not purchased. Regarding restraint of trade and: Palo Alto vend:ors, PG&:E currently had manufacturer rebates evcLywhere except Palo Al to and cheaper bulbs were not provided to Palo Alto retailers because it was not with.in PG'E territory. Staff would actively seek economic aevelopment wi thin Palo Alto and alloW" Palo Al t,o retailers a similar program for subsidi z.ed lamps, putting traffic into their stores. The City Attorney had reviewed the issue and had stated it was not a problem. The only situation he foresaw were the number of contracts which vould have to be drawn up for the retailers, but it was net a pro:t;:lem. Staff would 'Work with hard .... are stores and lighting suppliers to determine what would ~ork for them. tll\C: 12/02/92 Roqe 7 - (5) (6) ''''~--- ---" Cd) Duration -staff would run the point-of-purchase progra.m tor one month, if it could be worked out with i;he merchants. For the paynlent program and rebate option, tl"o.e program .0'.11d run for a period of thre~ to four months. The majority of information st£ff sought regarded whether it was an accept able de1ivery mechanism, whether education was there, etc. Staff had learned from the Ultra-Low Flow {ULF) toilet program that Palo Alto residents were ready to act. with education and incentive, customers made the proper purchas ing decision trom st3:ff's perspective, 'Which would probably be similar with the lighting program. It would not take an e~~ended time frame to deter.mine 'Whether the prograa should go full scale. There was the possibil ity that if the proqram worked out .ithin three to four months, it would go full scale much sooner than anticipated. The budget woul~ then be allocated or more ~ould be required. Some ~ample installations of occupancy sensors, etc., miqht be attempted to determine the market acceptability. There were also lamps which staft might want residenta to test on a small scale. Target Markets: Pri~arily staff would target residents and vendors. Staff hoped. to do a randomly selected group of residents. rather than tirst-come/Cirst-served method used with the ULF toilet program. The ULF toilet program 'Worked well for customers who were proactive, non-procrastinators, but staff wante.d to reach the qeneral populace with the liqhtinq program. staff wanted to work with local vendors, without iqnorinq surrouncUnq vendors. Staff 'Would also work with regional distributors. It was unlikely staff could get a manufacturers' rebate for just Palo Alto, so staff 'Would test the idea on distributors and merchants. ~luation Apprgach: The approach would he similar to the commercial program. utility standard~ would be employed, engineering estimates, utility industry averages, and sampled end-use monitoring and inspections and surveys. SOlZ!e utilities with programs similar to Palo Alto's did mail or phone surveys, but the public answered guestinns the way they thouoght the utility wanted them to. Random inspections were necessary to determine whether lamps were retained or used as long as the customer said. In follow-up surveys I customers indicated a reluctance to offend the utility. Staff would evaluate the process. Rebates and utility bill credits were administratively heavy and possibly not the best method, while d.ealing with merchants might be more effective. Staff would determine the most streamlined method. Commissioner Eyerly asked distributed the items, or channels. whether PG&E acted through supplied. retailers, normal manufacturinq tll\C: 12/02/92 • Ms. Clerkson was not sure ho"W' PG&E handled the programs because each was handled di fteren"!:ly at dj fterent times. PC&E normally worked ~ireotly with manufacturers 'Who supplied specific stores within the region, or worked with anyone who agreed to do the processing paperwork. Som.e stores had restrictions on specific brands, necessit~ting special handling, ho~ever, PG&E appsared to have wcrked succeosfully vithin the constraint~ Commissioner Eyerly asked whether the produ.cts staff dealt -with were generally stocked in ha~dware, electrical, or fixture stor&s. Ms. Clerkson replied yeS I the problem involved the small variety 'Of products available and the very high cost. If a prod~ct did not sell over a period of several months, vendors ~ould reroove it from the shelf. Vendors also carried older products like the magnetic ballast, lr.'hich flickered, causing customers nat to retain them. Staff wanted vendors to carry more acceptable products, instant ons, lower priced, etc~ It was also staff's job to educate the cuctomer. not the vendors. commissioner Eyerly asked about manufacturer domination., e.g., General Electric {GEl, Sylvania, etc" Ms. Clerkson said originally larger manufacturers dominated the :market, but there ,,"'ere more manufacturers and constantly new products coming out. Commissioner Eyerly said if the City ~ere to recommend a particular product through the program, it behooved them to determine where it ~as manufactured, where it was warehoused, et.c~ The closer in proximity, the less inventory vendors 'Would have to carry. The City should not distribute the product because of the bureaucracy of city government, less economic handling, and the considerable overhead~ Ms. Clerkson saie: the payment program involved city purchases. Staff was investigating the use ot service organi~ations as depot ami distributor. The city Attorney indicated it ... ·ould not be an issue. The Senior Center was being considered, allo~ing for the possible use of a previously City-funded orga~ization, providing a profit for them as well as a benefit to the City. Chairperson Grimsrud said the DSK ~as e~al to a 30 MW power plant in the l'Ong-run. The UAC 'Would understand more fully how the utility stood as mo~e information was gained and questions vere answered such as: Was a pilot necessary? How long 'Wo~ld it take for full scale implementation? What utilities had already utilized pilot programs: nOW DSH estimates related to estimates in the IRP? Was the DSM resource still 30 MW? Ms. Clerkson said the pilot scale program involved just as much work, if not more, to establish. The work required to go full scale involved tweaking numbers, i~e .• participation rates, budget, lll\C: 12/02/92 " etc. Typically, most of the work was ilLV'olved in the initial st~rt-up stage. Chairperson Grimsrud said because there ~ere 40 different compo nents to the DSM po.er plant, ~ith differing ramp-up rates, it vas fairly complicated. The UAC should be p~ovided yith more informa tion ~ithin six months. MOrIO.~ Commissione~ Vejtasa ~oved, seconded by Ho!fner, that the Utilities Advisory Commisslcn accept the pilot Commercial Lighting Incentive and Res.idential compact Fluorescent Incentive programs and recommend it to Council. ComMissioner Sutor ius said he would vote for the motion if statf would also investigate Little League, Bobby sox, and Girl Scouts, shift from candy to light bulbs. Me. Cleritson said it was an issue the City Attorney expressed concern about. KQTIOB PASSED 5-0. R>ge 10 •