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Home My WebLink About0187.093', .. , - ~-~-------"-"'" .-.-;: """" ~staH ~ :te.Xflt 1 I ~----l March 11, 1993 THE HONORABLE CITY COtTNCIL Palo Alto, California ~QtriQ Daaand 8i49 Management; Refrigerator Rebate Pilot P;ogry. Members of the Council: Raport in tria! This report was submitted t~ the utilities Advisory Commission {UACJ ~t their March 3rd meeting for the purpose of recommending Council approyal of the Refrigerator Rebate Pilot Program as described below. Funds have been allocated for the rebates, marketing and administration of this program. Backgreund In March 1992, the UAC recommended Council approval of a Demand Side Management (DSM) report that identified and ranked energy etficierlt technoloqjes on ener9Y savings potential and cost effectiveness. In January 1993, Council approved the Electric Integrated Resource Plan and the first of :c'lany electric DSM pilot programs to be implemented during the next two y~ars (C'MR:130:93). The Refrigerator Rebate Pilot program has been designed to addr~ss the potential savings that result from replacing broy.en refrigerators with highest efficiency replacements as indicated in the DSM report. The program, as proposed, is consistent ~ith a program offered by Pacific Gas and Electric (PG&E) , in order ,to leverage regional appliance. retailer acceptance and awareness of Palo Alto's program. pzogr .. De .. ~erJpti9n:- Obiectives: The primary objective of this program is to motivate residents replacing refrigerators to purchilse ones with an incremental improvement in enargy efficiency rating, that goes beyond the California Energy Commission's 1993 Appliance Energy Efficiency Standard. The secondary objective of this progr<!m is am,187,U '-L· " " I" I : i I ~ , i j ! to educate Palo Alto consumers en the cost o! operating refrigerator(s) in their nomes and the availability of higher energy efficiency rated refrigerators. Additionally, this pilot proqram is bein9 operated to assess: (1) The most effective means of encour~ginq customers to purchase re!rigerators beyond the stanoard. t2} The most effective ~eQns of d~aling with local vendors in promoting the proqram a~d its benefit6. (3} The availability of refrigerators locally with energy efficie.ncy ratings beyond the stat\dard~ (4) The cost premium of purchasing refrigerators beyond the standard. (5) The market for el"'.erg-y efficient refrigerators in the absence of a program~ (6) The rate at which old refriqerators are retained and used as a second refriqerator in the home~ (7} The process and cost of removing the old refrigerator from the home .. (8) The process and cost of old ~efrigerator disposal. (9} Tbe different d}~r.amics affecting interest in, and acceptance of, the more efficient technology based on customer demographics~ (10) The most cost e~fective means of program administration and maruting. ell} The market potential for this progra~ in the future. Type. qf IAo.ntiyes; The rebate level will be set to cover the cost premium Of purchasing the above-standard refrigerator~ The incentive will vary based on the percentage of efficiency above the standard; that is, the higher the efficiency the greater the incentive~ For purposes of consistency, the rebat~s are set in accordance to those being offered by PG&E. Target X!rket: The program ~ill be targeted toward residents r-eplaciT19 refrigerators that have burned out or needed for a ~itchen remodel~ Since the incentive level is based on the incremental rather than full cost of replacing a refrigerator, the incentive should not be sufficient to motivate a customer to initiate an unplanned replacement. Based on staff's evaluation, CXlU187:93 --~~,-., --- L - • -, there is a poter.tial for approximately 300 replace~ents during the proqra~ time period proposed below. CUstorr.:ers viII be targeted primarily through point-af-purchase mark.eting techniques, but some direct lIlai1 .... ill be used. DUrat.ion; The: prograIr. is sl~ted to begin on May 28, 1993 and run through September 6, 1993. The majority of opportunities foe refrigerator replacement oc~ur Q~ring these three months. This situation is due to the high rate of refrigerator compressor failure caused !:1y .. "arm ..... eather. PG&E will run their prograrn Quring this same ti~eframe; therefore, the City ..... ill benefit from any marketing that PG&E runs during this time. Mogitorinq anA Iyaluation: 80th a process and i~pact evaluation are planned for this program. The process evaluation _ill look at the effectiveness of the prcgram's marketing and administration l as well as the motiv=tion and barriers behind the acceptance ot this technology. The impact evaluation vill assess the energy savings related. to the program. Engineering estimates ..... ill be used primarily to assess g'ross savings. Participant follow-up surveys will be perfcr2eo to assess net 9avings~ Informatior. from industry studj,es on the deiliation from plate performance rating versus field performance ~ill be incorporated into the impact eval\.i.ation. A comprehensiv~ data base yill be oeveloped to monitor program participants and proqram cost. future pirectl_ons: The rate at .... hich residents retain a second. re~rigerator i~ currently unknown. It is known, however, that these second refrigerators tend to be very energy inefficient. ~hay are often Old, placed in unconditioned spaces (i.e., the garage), and not filled to capacity; therefore, the savings that could be achieved through the removal and permanent disposal of the second refrigerator can be gr~at. Adding a component for a second refrigerator trade-in incent~ve ".'ill be evaluated based on the rate at which second refrigerators are retained, the ener~f use or the second refrigerator, and the cost associated with ren;cving and recycling the secono refrigerator. The City is currently involved in a state-wide program that provides incentives to manufacturers to produce a super efficient r.afrigerator~ If programs such as tl"~is one are successfu.l aud manufacturers increase their efficiency, then repate programs may not be necessary in the future. Even 110\11, t.h.e incremental savings above the standards are diminishing each year as more and mere states set higher efficiency standards. Eventually, it may not be cost-effective to offer refrigerator rebates based on the small incre~ental savings. CXR:J.&7:93 - I ~. -- '.o?U 9nOa tiofl 9% t}.Jt.. ___ ~ After rsview of the program the UAC ~ade the following motion: Commissioner Vejtasa moved to approve the pilot program as outlined with the understandinq that the staff will brief the VAC on the progress of the pi lot program at the August :!lleetillg. The motion was seconded by Co~issioner Horfner. The motion passed 4-1, Eyerly "no·, Stafe '.cp ... n4ation: St~ff requests Council approval of the Refrigerator Rebate Program as described above. St~ff will return to Council with an evaluation of this pilot program and reco~endations for future p~oqram direction. (07~~~ ,~ CLERKSON program Coordinator Resource conserv~~n L,(~0 EDW~ oJ. MR A"EI< ~~n~~f Utilities ~ E FLEl!ING r Ci y Manager Related CMR: CIOl: 187: t3