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April 14, 1994
The Honorable City council
~alo Alto, california
Ut ilitioQ BleQ.tric Dema~...li1JL .. lliU1~.!tll.t Programs
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"this reporl fO.l'wards to Council a Utilities Advisory Commission
reco:rt~lendation for approval of three Electric Demand-Side
Management {DS~n Progl .. lms proposed for implementat ion during the
rem!,lil1d~r 1993-::14 and 1994-95. These are: 1) a pilot Commercial
Air-conditioning Pl"ogram, 2) a Residential Compact FlUorescent
J..amp Program, and )} a Residential Refrigerator Rebate Program.
Due to the seasonal nature of the programs, implementation will
begin prior to-the end of PY 1993-94 and will operate into FY
1994-95 (into FY 1995-96 for t.he Commercial Air-Conditionillg
Progl"am). Start-up funds have been budget.ed in FY 1993-941 and
additional funds may be requested during the the F'f 1995-96
budget p):"oceS8 if participation exceeds expectations.
The expenses for th~ combined programs total $584 1 550 and
ropr.esent significant (me1"gy savings OVel" the lifetime of the
inotallcd measures: 44 1 000 megawatthours and a 2 megawatt demand
reduction. This investment has been determined to be cost
effective on a Total Resource Cost (TRC) basis. since the program
expenses. including lost revenues are still less than the cost of
purcnasing electricity ..
}:!ackgrouod
In January 1993. Council approved the Electric Integrated
Resource ~l~n (IRP) which included DSM as a viable reSOurce to
supply purchases (CMR:137:93), These three programs were modeled
in the IRP and represent one new pilot program (Commercial Air
Conditioning) and two revised and expanded programs offel~ed
CMR:23l:94
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pre t,'.1ously (Compact Fluorescents and Rofrig6l"atorsi .
each prOgram are attached to thio report as follows:
1. l'ilot Comm~rci81 1;.1); Conditioning Program
2. Residential Coopact Fluorescent J.,amp Program
3. Residential Rofrigerator Rebate Program
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Details of
The Utilities Advisory CO!n:ni8fJ.ioll revie",-'ed ;;.nd approved these'
three pr09,rama by a (-0 vote (one ahaont) on Apr!l 6, 1994..
Staff recorr.rr.{I'nc;ia Council ;,pp:coye the following three Uti lities
Blectric D€'mand .. $ide Managet1':ent Pl:ogXilms~
1) Pilot CO"f.(~el·cial Ail: Condit ioning Pr09t'"am,
2' The Resident ial Coc .. pact ~~1IJ01·€'8Gent Lamp Progt-am r and
) The Residential Refrige:rato1.-Rebate Pr09ram.
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Managar, Resource Con8ery~tlon
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Director of 'Utilit.ies
~ City Manager
cc: utilit~e8 AdviBory C~~lsgion
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April 14, 1994
The Utilities Advisory CowmLssion
Palo Alto, California
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Members of the Commission:
This report requests that the: Util itiee l\dviso:ry C(,").~·r,j ssion
(UAC) recolT\ffiend Council appl'oval of the ;:'iuIti'-year pilot
Commercial Air-Conditioning P:t'O<Jl·arra as deocr-ibed c-elQw.
In accordance with the 1992 Rlectric Integt-i.Ited ResOurce
Plan (IRP). the Utilities Resource Conservation staff is
developing a pilot scale Corr·mercial Aik:-Conditioning l Demand~Side M;magemcnt (oSM) pl-ogl:aln. This program pI'opo!jaL
is significantly different iron .. previous Os.~ proposals.
because the program will be·. open for urdimited
participation within a defined time period.
The program would begin approximately .July 19901. and operat.e
for a two year period. After ptogram authorization, staff
will finalize program development an.d p:coduce program
marketing materials. Start-up costs for the pxogram al:e
included in the 1993-94 adopted budg~t. A total of $1)2,000
will be budgeted in FY 1994·95, and $2'12,000 will be
requested in FY 1995-96. The total program cost. therefore,
is estimated to be $~04.000.
If customer pal'ticipation exceeds estimates, additional
funding may b~ requested. Additional pa-rticipation 'Would
remain cost effective.
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BackgroUQd
The 1992 Electric Integrated Resource Plan (CMR 13'1:93) identified
which end U'Jes and associated level anQ type of electric load
shaping were the rr~st cost effective for the Utility to pursue, To
date, Btaff has implemented varioua pilot scale programs to market
test the DSM parameters modeled in the IRP. 'rheae programs include
commercial lighting. residential lighting and residential
refrigeration. The proposed program represenrs the first two years
of t.he long-term commercial air-conditioning program WVAC-ROBJ
recommended by the IRP,
Program goal and Qb1eotiy§R
The goal of the Commercial Air-Condi tioning program is to reduce
futun;", electl."ic loads (energy and demand) of space conditioning
equipment in the non-residential sector. Tlle estimated program
impact, net of free riders, totals l,980 Nwh annually and Q, 2 ~!w
peak reduction when all customer projects have been installed, The
lifetime program impact totals 39,600 Mwh and 2 M-..:.
The primary objective of the program is to motivate cust<)mel"S to
install new or replacement air-conditioning equipment. that is more
efficient than what would otherwise have been selected in the
absence of the program, New and replacement eqt.tiprnent must comply
with the State of California' 9 Appli.ance Efficiency Standat'ds
(Title-20) • which establishes minimum energy efficiency
requirements. This standard represents the no-program base caoo
for equipment selection. More efficient equipment is available
commerciallYI but is often not selected due to higher first cost.
The pilot program is designed to encourage sel~ction and
installation of the more efficient: equipment.
A.dditionally, the" program has sevel:;al rnrtrket. research and
evaluation objectives. which include 'assessment of:
(1) The most cost,-effective point (0) for intervening in the
equipment selection process for both new conetl"uction and
planned replacement projects,
(2) The relative effectiveness of l."ebateR and project design
assistance in motivating customer action in the purchase of
efficient air conditioning equipment,
(3) The p'redominant market barriers to customer selection of
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efficient air-conditioning equipment in various market
segments.
(4) The market acceptance of the program design and the m"lgnitude
of customer demand fol," efficient equ.ipment,
(5) The applicatio~ of the medBUrem€'nt and evaluation protocol
(currently under development) whi.ch includes project tracking.
short-term monitoring and post-program verification,
(6) The cust.orner decision-making process (length, internal review,
financial considerations),
(7) The market potential for alternative incentive funding
(utility financing, lease/purchase options, interest-rate
buydowns. third party financing, etc.l,
(S) The market potential for prescriptive versus customized
pl:ograms. and
(9) The market potential for p:reventative maintenance services.
The Commercial Air-Conditioning Program offers incentives to
customers to inotall proven, state-of-the-art, high efficiency,
electrically powered equipment. The program targets three
categories of equipment: packaged air-conditioning units, built-up
system components (chillers, cooling towers, fans, pumps f and
cooling coils) and motors. The program application process 'IJill
l":equire Utility pre-notification of projects prior to equipment
purchase. Once the project is accepted, a pre-installation field
inspection will be required.
The customer will have a stipulated period of time <related to the
equipment type) to install the equipment. A post -installation
field inspection will be required, prior to the issuance of the
rebat.e check or bill credit. Short durat.ion monitoring 'will be
performed for a sample of the installatiolls as directed by the
evaluation protocol.
Budget and Funding
The 1994-9S budget (first year) required to achieve the program
goal is projected to be $1.32,000. This includes $.tlO,OOO for
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incentives. $7~OOO for marketing material8, $10,000 for tracking
ayate,m 8oft",'are and $5,000 for evaluation. Second-year budget is
project~d to total ,272,000 (with $257,000 for incentives, $5,000
for I'1'lat'koting materials and $10,000 for evaluation). Therefore,
total progr~m cost based on the expected case is $404 .. 000. If
pOIrticipittion exceeds projected, lev-ela due to the unlimited
participation component. additional funds for incentives may be
requh:ed and ~111 be requested, The cost of conserved energy is
expected to be $0.0102 per KWH over the life of the equipment and
$199 pet' pe.k KW.
Jl~Cel\U.ves vi11 be in the form of cash rebates and engineering
dQsign assistance, The rebates will typically cover SO to 70\ of
the incrcrr.ental cost for qualIfying equipment and will be paid upon
vorl!ication of installation. Rebates will be paid to the
cllsto."ners,' or to a third party of their designation (i ,e. ouppliers
or installers of the pt:ojectl. so that the customel'S only have to
Dud':}et_ hmde tor thei r net share of the project cost,
Incel1tivcD' will be paid on a prescriptive basis (dollar per unit)
k'athor ,than a cU9tomiz.ed ba91s (dollar per-KW or KWH reduced),
R~~te levels will be ~caled in proportion to the efficiency gain
achieved by the project 'i ,.0, highet· rebates paid for more
efficient equipment), Over the course of the program's operation,
alte:rnatiV'c: rr,onetary incentive mechanisms may be used, such as
expediting the permit approval process for new construction
projects through partial funding of cOllsultanto for plan review.
To provIde high caliber design aosist:ance, mechanical engineering
pr~fesaionala on contract to the Utilities Department will provide
. cuetom.t)rs and their design teams with assistance in selecting
officient 9ir·conditiontng equipment. One component of that
assistance will be ~ducalion, reinforced through documentation and
articulation of the added value that energy efficiency contributes
to a project, especially in new construction.
IA.N~_t Horlcat
The program will be dil'ected towards all commercial and industrial
customers who have new construction projects 01' plan to replace
existing alr·conditioning equipment, Since the l'ebate is based on
incremental rather than ftlll cost, it is not expected to motivate
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a customer to initiate a retrofit project that had not previously
been planned. Program targeting will generally correlate with
equipment categor.ies {packaged. bui It -uP. rr.r..ltors~. Addi tional
segmentation will be done On an us-needed ba9is.
Program marketing will 00 through Resource Conoen·ation Advisor
contact: (phone calls, aite visits), di:(cct (n(lll (program
arulouncemont, advertising flyen), newsletter, pl'ogram -literature)
customer meetings (pl'ogram introduction, Energy "\anagera Network) ~
and vendor support. The extent and o<.'ale of tAarket il19 effo!·tB ..... 111
depend <m customer rsapon66 to the prograM U .e. low }.·coponae w1l1
trigger increaaed marketing activity) and ma:rketplace dcv~lop.-r,ent8
that offer additional opportunitics 0),-pl.·cacnt new barriers.
The projected two Y13ar pl'ocJl"am part icil'al ion levels .tire 6400 tons
of cooling and 1500 moto:t: hOJ:ot'!po .... er. Thi6 repn~sent8 the expected
caso and the actual pu:ticipati.<1rl levcl will vary_
The pilot progTcll:l will be offl.'H-ed for a period-of at. leaot two
years, which is based in part on custo<""e:t-feedback from thf.!
Commercial Lighting Progrt"m. 1\.'0 years 19 viewed a.:.:t the Ininimum
window of opportunity noeded for l'UBlo-meta with widely varyIng
budget cycles and approval loops to di,1fJign~ opeci fy more ef ficient
equipment, document. bid, begin con.atruclion and cotr>mit to a firm
completion date fOl" their Pk"Ojccts. 'rhe program is planned to
start July 1, 1994 and cont inue thn:mgh June 30 t 1996.
The pr09ram will also M "offered on an" a:ll~cQr.lorB basis. again
baaed on customer feedback. While -(ir.at cO{r,e, fh:et seTved" and
-until the money I-una out .. offerA: can be effective motivators. tlley
are not effective for assessing market magnitude or demand, which
1s a program objective. By dcfinition," a pilot: progTam is a
limited offer. The limitation for this program will be its
duration. This way, customers have p--rcdictable financial
participation from the Utility for theil' a61ection of qualifying
(more expensive first-cost) equipment and can include th~ rebate in
their facility project proposals to ~nagement. CUstomer budget
cycle is thereby removed as a barrier to parti.cipation. Utility
funding impacts of thiB approach have been addressed previously,
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The evaluation will use a calibrated engineering model in
combination with short-term end-use monitoring on a sAmple of
p}':'ojects to estimllte program sayings. CUatomers who participate in
the progra.m will agree to allow pre-and post ~in9pect ions as a
condition of receiving the incentives.
Surveys of participantB and non-participants will be used to aBBOSS
cU8to~r awareness of, attitude towards. and satisfaction with·the
technologies being promoted and with the program it-naif. A
comprehensive tracking system will be used during: progr.lm
implementation to aasist the evaluation efforts.
ReCommendation
Staff requests the UAC to recommend approval to Council o( the
pilot Commercial Air-Conditio'ling Program concept and COmt"i'lencerl'.ent
as described in this report.
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TOl1 AUZENNE
Manager, Reoource Conservation
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Dire~tor of UtilitieB
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April 14, 1994
The Utilities Advisory Commission
Palo Alto. California
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llictrig DAlMnd~9~L~flnt I 1994~_ReB1d8!!~Jal Compact
Fluorasa&D.t LIlJlP. Point of .FYAQ.b~_~ Pro...9£a.m
Members of the Commi~sion~
RoporUn....Brief
This report l:€',quests that the Utilities Advisory
Commission WAC) recommend Council approval of the 1994
Residential compact Fluorescent Lamp (CFL) Point of
Purchase (POP) Program as desc:t'ibed below. Start-up costs
for the program are included in the 1993-94 adopted
budget. The total program budget is $95.000 ..... ith total
prcgram cost of $50,000 (after receipt of $45,000 in
customer repayments). If customex participation exceeds
estimf\tes, additional funding may be sought for 1994-95.
11'1 March 1992', the UAC l."ecommended that Council approve a
Demand-Side ~'anagement IOSM) report that jdentified and
ranked energy efficient technologies on energy s3vings
potential and cost effectiveness. In January 1993.
Co~ncil approved the Electric Integrated Resource Plan
which included DSM as a viable resource to supply
purchases (CMR:137:931 and the 1993 Commercial and
Residential Lighting pilot Programs (CMR: 130:93).
Two residential pilot prog:rams for compact fluoreocent
Jamps 'CFLsl were implemented from February 1993 through
April 1993: the 2 Option Mail-in Program (2-0P), and the
Point of Purchase Program (POP).
Program 1: 1993 Residential 2 Option CPL Mail-in Program
The first pilot program to be implemented was the 1993 2-
OP CFI. program. This p:t'ogram was designed to target the
residential market and test two different incentive
mechanisms. Residents were asked to select one of two
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options: purchase CFLo on their own and obtain a utility rebate or
purchase a CFL from the utility through a mail order program.
A rebate was chosen to ta~~et those aware of CFLs but who needed
a small incentive to try them. Because CFLs usually cost between
$9 and $25, the $5 rebate was used to bring the initial cost
under $10 {the acceptable level for nrnall household purchases) .
A mail· order option was included in the program to target risk
adverse cU9tome~s. The utility purchased 7 different CFLs and
made thom' available (at coat) to participants through the mail.
Acc.c88ories such as fixture harps, harp extenders, and socket
extendero were aleo offet:ed. Participants were billed for the
CPLa on their util ities bill, 'fhe program included a 30-day money
back guarantee and c~lstomerf:l could maKe payments in 1, 2 or 6
~.onthly il1stallments. Staff wanted to assess whether consumers
would be wi! ling to pay full cost for the CF[,s over time and to
dcter11"line if the program could be self-supporting,
P:a:ogl'62e 2: 1_993 Roa:idential Point of Purchase CPL program
The 1993 pop program fOl: CFLa was designed so that residential
utili~ies customerB would have easy access to low cost, high
quality compact fluorescent lamps (CPLs), with minimum impact on
utility staff til1'..e. The program was designed BO the utility ... lOuld
select a few high quality CFLs and bulk buy them to take
advantage of a quantity' discount. The $12 -$13 lamps were then
aold -in ha~:dware stores with a subsidy to bring the lamp price
down to $9 apiece, 1'hrough a contractual agxeemenc I the hardware
stores agreed to Bell the lamps, with no markup, since the
program offered no risk to them and the opportunity for h'ee
'advertising and increased foot traffic. Vouchel's were sent to all
Palo Alt.o re8idential customers which allowed then; to buy up to
two CFLs at the special progrClm pr;'ce. The vouchers limited the
program to only Palo Alto utility customers and allowed for easy
poat-program evaluation.
Pilot Program. R'eBulta
Both programs attempted to l'each the residential market and
motivate consumers to buy and install CFLs in their homes. Both
,pilot programs were Buccessful in that staff achieved their
objectives. The pop pl'ogram proved very cost-effective and
partictpation was close to what was projected (see attached
evaluation report). Because of thoee results, staff ia proposing
a modified POP program for 1994,
'The proposed 1994 program will be Bimil.:lx to the 1993 POP pl.'ogram
but with changes that will decrease the program's costs and
increase the total energy savings.
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The 1994 pop program is designed sO that l"eeidcntial utilities
customer{l have easy access to low COBt~ high quality compact
fluorescent lamp~ and energy efficient halogen floodlights, with
.til minimum impact on utility ataff time. The utility will eelect
a ,few high quality C~l,,9,.and bulk buy, them to tak.e advantage of
quantity discounts., The bulk purchased CPLe will th(:on be further
subsidized to bt:1ng the lamp price: to an acceptable level (about
$101 to· the cUDt~r. 'through a contractual agreement, the lamps
will be Bold in hnrd",'al:e and light lng specialty stores in Palo
,'Ito at 1'10 rT'!,!:r):;.\lp, since the pr-ograM offers ho ris.t.c; to them and
the oppoX"tlJni ty for f!:ee advertising and increased foot tloaffic.
BUlatlJffora wIll be sent to all palo Alto customers 'allowing
them to buy up to 5 CFJ,$ at the spt'!cial program price. Included
with the ,billstu((er wi 11 he a money-saving coupon allo .... ing
cuetOc"fiers to pUl."chasc h.;llogen floodlights at a discounted price.
The use of the b1l1stuffelo "",Hl help to li(nit p:rogra1n
pal'ticipa,ti<lf1 to f'alo Alto utilit.y cUato:ners,
Goalo and Obj~ct1v~s
'i.'he oVof"t'-311 pl:ogram goal is to cost ~effectively captllre energy
Ikilowatl hours) savings through residential in8tallationG of
compact fluol"c8cont and halogen la(r,po ° Rebates encourage
Consutr.et"s to, pu.rchasc these etficient lights by r.educing the high
fi rat cost prefl'lium. ,The pop pl"og)."am is expected to achieve 522
MWh par year and 3,209 ~'h in total energy savings The
paJ;"ticipatiorl .. 'atee aloe oliticipated to be '7t of tile residential
market.
Other pl"ograrn object;" vt)8 axe:
l} Assess the rna;rkct acceptance of halogen lamps.
2') SuPPO).°t local busineoscs which eel I energy efficient
latnps.
3) A9S~SO whether co~~erc1al participation resulting from
bil10tuffer marketing ia a factor to considel." in any
futul"e pro9xam design"
Target M!ll')(:et And. Sa.ving,. PotIQntial
This program is prirn~rily targeted towards Kcsidential utility
customers. 7here arc approximately 23,000 single-and multi
family resid.ential customers in Palo Alto. 'this program will
attempt to encourage 1. '100 r.esidents to purchase efficient
lights. up to five CFLs and/or up to two halogen lamps,
The estirr,atcd savings for this program aloe 522 M'"wh per year and
3,2BS MWh OVfH: the 8. S year life of the CPI .. s and the 1.8 year
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Product Selection
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The CF'L product selection cl"iteriu will be tho same as last year.
Staff. will look fOt' high quality Cfo'!.,a th<1t are small enough to
fit into a large number of applications. The Cf~ must be
electronic ballasted with tri-phosphor cQ4ted lamps. Staff will
decide whether two, three or fOUl" diftenmt Gtyle6 of CPLe will
be made available. An emph~ais, wIll be-placed thiu year on higher
wattage lamps to increase the Davlngs benefits of the progt:am. and
customer satisfaction" The final decision on product selection,
however. will depend UpOn price, availability~ a'nd abilit.y to
offer an adt".quate selection to resident ial (:ueto.'!'oere.
A new addition to this program HH1 be the inclusion of ha~0gen
flood lights for \lse in recesued-can dO'«lll Lgl'lt appl icationa such
as kitchens or living nxxns where CPl,s are iP'opractica! Ot"
undesirable 'i.e. high ceiling6 (,'1': dirr.rr.er controlsl ~ A \,,:oul>on
will be developed which will .1110'", CIJGtornerD to -get a 8pec~fi.ed
dollar amount off the price of the lamp. This will rwt only
benefit the customer, b1.1t it will also benefit the vendor. The
vendor will be able to oell product from thc-ir Q' .. m stock and be
permit.ted to chat'ge a markup on the halogon lamps. This profit
opportunity should encourage lnore acti .... e participation fl"o:-n the
vendor9. It will also benefit the utility because tho vendor will
instead pay the up front costs to purchase the halogen lampo"
Progr&m Duration
The program will l'un for up to eight weokn in the fall when the
daylight savings time ends. Hardware store v~ndor$ have indicated
that t.his is an optimal time for selling the m.a~imum number of
lamps to the public.
Program ~mpl.mentation
The program will be impl€!mented throu-gh 1 ighting xetF,tile:rn: 1"
Palo Alto~ most notably four hardware 8tOL"~8. Staff will al.oo
look into the viability or expanding the pl.'ogralli to include othel"
lighting or specialty suppliers in Palo ALto.
In-house staff will handle the administration of the enth"c
program. Participating retailerd will provide the· ehel( space fer
the lamps and provide the consum.er8~ point of pUl"chase.
Marketing
The program will utilize a v~riety of mass fI'Iarketing techniques".
Advertisements will be placed in the local newspaper before dnd
during the program. A voucher authorizing the bearel" to
participate in the program will be sent as a billstu(!er" In-
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store displays of informational materials and working meter
demonstrations wi.l1 also he provided.
Among the largest costs of the 1993 program were the printing and
mailing of the vouchers. While this was an effective way to
introduce a new program, a billstuffer should suffice to
reintroduce the program in 1994. However, using a billfltuffor to
publicize the progra~ means that the program will be open to all
Palo Alto utility customers, including commercial customers.
Staff feels that'the cost saving of this change will e~sily
outweigh the small chance that some CFLs could be installed in
facilities outside of the Palo Alto service territol'Y. All other
marketing materials will be geared toward residential cuatomers.
R.Logram Budget
The proposed scope of the program is to sell 5.000 Cf'r,s and to
l'ebate 4,000 halogen lamps, Sta.ff is requesting a budget of
$95,000 for the initial cost of this program, of whicb $45.000
will be l"eturned to the utility, The anticipated cost of this
program is itemized below~
Acimin/r>farket ing
Cost of CFLs
Halogen Rebates
Initial Program Costs
Contingency
$12,000
66,000
8,000
66,000
9,000
\76ta-l-Fiinding Requirea.-----'l9S,051;
Less Cash Repald----'----------------45, 0-0-0
Total Program Cost
Progr~ Monitoring and Evaluation
$50,000
Paz:-ticipation in the program ~"ill be monitored closely throughout.
the program. Continuous communication with the retailers will be
pursued. Eval~~tions of the program cost effectiveness and
customer satisfactiQn will be conducted at the end of t.he
progr'am, using. information gathered from the program stE\tietics
and participant surveys,
FuCure Direotion
It is anticipated that an annual CFL incentive program such as
the Point of Purchase Program will remain cost-effective. Program
parameters and utility objectives will be reviewed annually. A
final evaluation of the 1994 program's cost-effect".iveness and
energy savings will be conducted at the end of the program,
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E~ergy savings will be calculated using the recommended
evaluation protocols currently under development.
aecmpm.nd ati.2D
Staff requests the UAC to recommend Council approval of the 1994
Residential CFL Point of Purchase Program and budget as described
above, Staff will return to Council with an evaluation of this
pilot program and recommendations for future program direction.
~~~tted'
TOI1 AUZB truS
Manager, Re80ur~on8ervation
Eo{1r7::K
Director of Utilities
Attachment: 1993 POP Program Evaluation
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City of Palo Alto Utilities
1993 Point of PUrchase Compact. Fluorescent Lamp
Pilot Program Evaluation
~~);;qroW)d
After he~rin!J the success stories from large utilities about
their \o' .• :mufacturer rebate programs. the Palo Alto Utilities
Department tried to imitate their accomplishment. A manufacturer
rebate program <=onsists of an incentive paid directly to the
O'.snufacturer to 10'o\'cr th.e product r.et.ail price. Theoretically,
this incent.ive mecoCinism should reduce the amount of markup at
each level of the. distribution channel (manufacturer i
di8tributer~ retailer) 80 that in the end the customer pays less
for the product at the 9tore~ Typically, these incentives are
administered at the manufacturer level through contractual
a9i:eel:lents with ut.ilities. 1-'0&8 and other large investor-owned
utilltiea have fun successful manufactureL" rebate programs.
I\ftc .. · tiJlking to a IHlmher of lighting manufacturers; howevol'." it
became quite obvious that Palo Alto "-'<>:9 too small a market to
-dt.tract manufacturers to this style of p,.:ogram. Convinced that
the idea W~B a good ,one; the Utilities Department developed a
manufacturel." style rebate program, without the help of a
manufactul.'er.
'rho Utilitie.s; acting as a wholesaler, purchased lamps in a bulk
Qrdor at a discounted price. The cost of the lamps was then
decreased even more via a subsidy. so that the cost to the
C"UBtONer would b~ under the preconceived customel" barrier of .$10
each (fl.·om i\PR[ . report TR-l00734. Perceptions of Compact
Fluor(lscent Lampa on tho Residential Market, J"i.1y 1992). Local
hardware a.tore.s then Bold the lamps fOl:" no m~!..'kup, received free
~dverti8ing, the goodw.i.ll for participating in an environmental
program, and a l<U."ge number of walk-in customers,
~~e program was designed to motivate residents of Palo Alto to
purchase .high quality compact fluorescent lamps (CFLs) BO that
their first impression of these newer-generation lamps would be a
positive one. Vouchers were sent to all residential customers
which enabled ti:em to purchane up to 2 of the CPLs at the
subsidized price of $9.
A total of 22,970 VOlJChel"S were mailed through the program with
1 ,2:)4 residents participating in the program, which amounts to a
response rate of 5.4\.
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The uti} itie8 Department, wanted to make the customers first
experiente with newer type CFLo R positive one oS well as
affordRble. Staff ),;esearched many styles and makes of CFLs. then
chose those: lampe: which offered the most benefits to its
cuetomel:s. Each CPr.. has an el(lcttonic ballast and a tri ~phoBphor
lamp coating to ensure relatively qu'ick 6tarting and a high
quality light:.. Wattages of lS~ :23~ and 30 ·",-er('· chosen to offer
customers a wide range of b'l'igl\tnC!sa (SO, 90. and 150 watt
incandescent equivalents). The lam.ps -cho~Qn .... ·ere also Son\e of
the: physically smallest available, allowing C\,IBtOi'rlers to fit thern
in ,a greater number-6f -applications.
The pl-ogram tOOK place du:dng the r."Onth of April, 1993. APt'il
was selected 6Q that tlle prC9r.l~ .... ould coincide with Earth Day
and the publicity th~l tHJrroundu it..
7hc program \IIa8 designed so that once it began, it v}xtually ran
itself. The Utilitie9 Dcp<lrLr.-.ellt did aoll of the: pre-progr<ltn
design and all of the post-program wrap-up. Once the program was
up and running, the hard .... ~lt-(l stores took cal.-e of just about
eve~ythin9. They ...... cr{J ve:ry Ilappy to hlive custom"l:}:"s co:ne into
their stores and purchase the lahp.a. Sometimes it resulted ill
additional sales for the (;tores ilind aometime!3 it l-esulted in a
new customer walking into thoi'l-otore for tho fh,-at time. The
utilities only l'.csponaibili..ticG once the program staJ~ted ",-as to
anewer questions from the, hardware stores and to ki:!ep them
stocked in lamps,
Program U.rketlng
Before the progr.am began, a billet-utfer and an ad in -a local
newspaper wel'"e l'tJ,n .... hich promoted the benefitl;' of CFLe. Once the
program began, ada wero again run in a loc~l newspap~r Which
prorrloted the program. The main, fl'tat"kcting picco was the: voucher
itself. The voucher "':a8 ~ threc .. fold -eelf-m~11el" that not only
promoted the benefits of these lamps, but WdiS also needed to
verify Palo Alto residency. Displays and brochu~es were aloo
made for in--store usage during the pt-ogram. At the end of the
program, a final ad was run which thanked the stores and all the
participant~ for making the program a succeos.
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When-the initial program bid went out. the Utilitico Department
requested 2, 3(l3 lamps for the program. By mid program. the
decision was made to purchase 363 more lamps to satisfy customer
demand. By program end, two of the three stylea of larnp~ had
completely Bold out and only 56 of the third style t·cmained. Of
those 56 leftover, half were purchased from th~ utility by one of
the hardware stores, while the last. 28 we-i'e retained by the
utility for exchanges.
Although the maximum numbel' of ).amps a cUBtomer could p·urchaoe at
t.he subsidized price was two. the average number of laf:ips
purchased by a ClJstomel-was nearly 2.1. This occu:l:red bitcausc
most of our customerR {94\') bought two Ot-,'!'\Ore lamps, paying full
price for the extra units (2~403 lamps \-,,'cre pu)::"chaaed uGing 1.214,
vouchers/ while 217 lamps \'I~re purchased at full pt"ice).
First year energy savings are proj ected to .be 169 H'Wh~ ~'hi1t!
lifetime energy savings are pI'ojected at 1~4S4 l-ri'fh. 'the total
reSOl,ll'ce cost of the pt-ogram was greater that one wlli Ie the rata
impact of the program tlas less than one. Huch of the coat of the
program can be attributed to the pilot nature o( the program.
I-uture programs will no doubt have lowe):: up front costs.
A post program survey was sent to all parti~ipants, The O\ll'VC,'
addressed issues of both a 'I'lantit,a;tive and qualitative nature,
A few key points from the survey of note are:
9?~ liked the long life of the lamps
84%" thought the light quality was acceptable
75% thought the bl.'i<,Jhtnes9 was acceptable
70% thought the start-up time was acceptable
59% were motivated to purchase eFts for money saV'ings
41% \-Jel-e motivated to purchase CFLs for the en ..... ironfl1cnt
14% had previously tried CFLs and were satisfied enough
to try them again through pop program
85% would purchase CFLs ag~inj eepr.cially if diacQunted
in price
Program 2ecOQAj~
The program was featured in a number of trade journals as an
example of a successful and innovative program. 'rhe Utilities
Department also won a grant from the California ~'unicipal
. Utilities Association to demonstrate to other utilities how to
run a similar program.
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Program Coato
Admin/Marketing
Cost of CFLs
Initial Program Costs
Leas Cash Returned from Stores
Total Program Cost
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$ 10,249
36,501
46,756
24,330
$ 22,426
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City(JPalo AltQ
Wililic;Depm1menf
April 14, 1994
The Utilities Advisory commission
Palo Alto, California
~~~~~-Bide Man.gamont: 1994 Residential
B.§fi..L~L1!!!!laC!8Clent and RamoYM..YJ::~
Members of the Commisslon;
Feport ip, .. W§!
This report requests that the Utilitieo Advisory
Commissioll (UAC) recommend Council approval of the 1994
Residential Refrigerator Replacement and Removal Program
as described below. The total program costs a:t"('! estimated
to he $85,550. Start-up costs for the program are
included in the 1993-94 adopted budget. If customel"
pa~ticipation exceeds ~Btimates, additional funding may
be sought in 1994-95.
Sac kgrou.,.n.g
In March 1992, the UAC recommended that. Council approve a
Oemand-Side Management CDSM) report that identified and
ranked energy efficient technologies on energy savings
potential and cost-effectiveness. In January 1993,
Council approved the Blectric Integrated Resource Plan
which included DSM as a viable resource to supply
purchases (CMR:137:93) and -in March 1993 Council approved
the 1993 Energy Efficient Refrigerator Rebate, Pilot
program (CMRr187:931 as one of the electric DS?-t programs
to be tested at a pilot level .
The pilot program ran from May through September of 1993.
Th.:= program was lilnited to single family dwellings a.nd
targeted homeowners who were planning to, or needed to,
purchase a new refrigerator. Overall the program was
successful. Energy savings were achieved cost
effectively. That is, the program's benefits exceeded the
program's costBI and participation in the program was
close to what waa projected (see attached evaluation
report) .
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P.o.BoxlO250
Pa!oAlto,CA9Ul.l
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The propc(Jed 1994 program \I,'ill l"etain the rebate cor.iponent for
single fa-mOy d",'cllings, with eOO1e modifications to improve the
Qverall,co8t-ef(ectiv.oncs8 of the: prograrr.. Two new r;omponenta will
00 added: a rebate tor multiple family dwellings, and an incentive
to retr..ove oecond refrigerators from single faroil)' dwellings.
Th~ proposed program differs from Pacific GaB and Electric's (PG&E)
proposed 19905 refrigeratot' program. Difter-cnccs of which staff is
aware in.clude~ POt.E docs not ha'le a second refrigerator removal
cooponEmt.. PO"g aleo. offers Inultiple :rebate levels for multiple
[ami ly and has difte:rent pl'09ram eligibi lity 1:cquirements.
'Tho overall program goal io to cout.;.effectively capture energy
(kilo-;.;oClt'; hours) saving" th~ough residential l.'oeft'igerar.ion. There
are t.wo components to the overall progr,all1~ new pIJ!"ci1ase rebates and
second l·efrigorator re;o.ovals. The sirtgl~ and multiple family
dwell ing rebato cO:1ponent will capture energy savings by
encoltraging (:QI1Gumero to put:<:hase the most efficient refl-igerator
poooibl.c ..... hen thGY are l.'eo.dy to ,replace their existing
r~fr~gerat<H'. The pilot rcf-rige):ator removal component will achieve
savings by p~r~~nently removing' old and inefficient second
rOfl"lgel'atora fi.-om conourr,ers' home8., The pilot removal program has
the gr~atest potenti~l for energy eavlngs and represents
&'{)pl'oximately 8S" of overall program savings if penetration targets
8l:'C met.
7he entire refrtgorator program is e>,pected to achieve an average
IHLVings of 623 mega'A'at't hours per year and a total savings of 5.082
. megawlltt. hour-o OVQt" the! life 'Of the program. The participation
)'ates are anticipated, to be a 87% penet.ration in the Replace on
Burnout (ROB} potential for refrigerator revlacemente and a 20%
penetration rate for second r~frlgerator removal,
Othe~ program objectives are:
11 Determine effectivene.s9 of a single rebate level tOt
mUltiple family dwelling refrigerators,
2) Assess replacement. potential in the commercial customer
market eegl1"lent f
3) Artalyze the second refrigerator buyback potential,
Pursue further l"ceearch on cost premiums of higher
efficiency reh'igerators.
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Single ramilLPlt.JJJ..Jing' RtP.a.£m.!1.~lIlpyn'Rt
This component will tat'get Bingle f.arlli ly .d~'(llling homeOWnek"S who
are })lantling l or need, to replace their primary refrigcl·ator,
Rebates will be offered tc FnQtivate the homeowner to purchase: a
refrigerator that exceeds the Depa:t'tment of Enel.-SY'.o {DO'S} 19~J
efficiency standard tOt' refrigerators. The .n:'!batc lavol wi 11
increase as the efficiency level of the refrigerator increHAee.
Rebates will be limited to one :t"ohate per single family dwelling
utilities account Jlumber.
Effioie~cy Level Rebate
Level <\ above DOR standaxd) Amount
1 1!i to 19.99\ $lS
2 20 to 24.99\ $50
3 25\: 0"£ (f,ore S1S
P,('ogram Duratior,
The program will 1.-UO during the surr~~,er for appl:oxirrlatoly three
months from May 27, 1994 t:hrough September ~. 1994 (~er:,(a-i31 Day
weekend through Labol" Day weekend) .
Pot~ntial PaTtlcipant~ and Energy SAvings
'['here are approximately 15,000 primiu·y refrigerat.ol:s In the Palo
Alto ,single family dwell ing mar)cet .. Reh'ig(n.-atoro typically have a
life of 20 years, therefore evet"y year approximately ?SO
refrigerators burn out.. The pr03ram will attempt to e·ncoti:rage 430
homeowners replacing their refrigerat.'>r to purchase .a. hi9h
efficiency unit" The 430 l:efrigeratorEJi represent 51\:, of all the:
refrigerators that butn out du~ing a year and 66\ of. tho
refrigerators that hUrn out durin.9 the progl'am' 8 time frame"
Energy savings are dependent on the. 9ize, featured, and efficiency
level of each refd.geratol'; The expected energy savings. per
refrigeratol' is the difference in ene . .x:'gy \l5e bet. .... een what the
participant purchased and what t.he DOS's minimum efficiency
standard is for a unit with the same f€atul:es and size.
The estimated energy oavings for thio program is 59.9 MWh's per
year and 1,199 MWhls over the 20 year life of the refrigerators.
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Morketing
Because the program targets homeowners who are alread~' in the
market for a new refrigerator, concentration will be placed on
point of purchase marketing at the retail appliance store.
Multiple Pamily Dwelling Re£riq8rat~ace.mpnLCopm9n6n.t
, ,
This compommt will target multiple family dwelling manage:nl and/or
owners .who are planning, or need, to replace their tenanto'
~efriger3torB, A rebate of $50 will be offered to motivate the
property managers/owners to purchase a refrigerator that exceeds
the DOE standard by at least 20%. The rebate will be limited to a
minimum of at least two rebates per mUltiple family dw~111n9.
Progr~ Duration
'The program will l."un for approximately seven month9 from May 27.
1994 through Decetnher 31, 1994.
Market and ~nergy Savings Potential
There at.'e approximately 9,400 refrigerators in the multiple fami 1:.-'
dwelling sector. Every year approximately 470 refrigerators aloe
expected to hurn out. The program will attempt to encourage
property managex·s to purchase 270 high efficiency unit" during the
program' 9 time fl.·arne. The 2'70 represent 57% of the estimated anllual
burn out pot-ential ana 87% of the potential during the pn>gram'.9
time frame.
Energy savings are determined using the same assumptions and
calculations as in the single family dwelling market. An average of
26.7 MWh~B is estimated to be saved per year and 515 MWh's over the
20 ye~r life of the refrigerator.
Program Marketing
Marketing effot"ts will focus on point of purchase marketing at the
appliance stores; however, direct mailings to pl'operty
managers/owners will also be used.
mot Refrimn:ator Buy Bac1Lk2..~!;
This component will be tested at ~ pilot level and will target
homeowners that have more than one operating refl'igel'ator in their
home. To encourage participation, an incentive of $50 plus free
refrigerator removal and disposal will be offered to the
homeowners_ The City will hire a hauling company to remove the
ref.t"igerators from the homeowners' property and deliver them to the
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City landfill. A recycling company will be hired to dispose of the
refrigerators properly.
program Duration
The program will run for six months from october 1994, through
March 1995. The program will stal·t after the rebate program ends to
avoid paying incentives to refrigerator owners who were already
picnming to dispose of theilA old refrigerators.
Market and Energy Savings Potential
There are approximately 1,750 (12% saturation) second refrigerators
in the single family dwelling market. A high participation rate in
the program is not anticipated, because many homeowners regard
their second refl"igerator as a necessity and therefore would be uml:· lling to pal"t with it. The program will attempt to capture 345
{20'\,,1 penetration rate) of these refrigerators.
The energy savings potential for this program is dependent on the
age, style, and size of. the refrigerators that will be removed. The
estimat~d energy savings for this program is 534 1~lh's per year and
3,308 MWh's total.
Program Markoting
The focus of the marketing for this program will be on educating
the public about the enormOUB energy use and cost of operating
second refrigerators. Marketing will be dil.·ected to the general
public through billstuffers and newspaper ads.
~.Qgra.m Budget
Administration
The single and multiple family dwelling rebate components will be
administered by the Electric and Gas Industries Association fEGlA)
The fixed administration cost includes program set-up expenses,
data management including participant tracking and reporting,
periodic updates of qualifying refrigeratots, and liaison with
local appliance vendors regarding the program. Variable
administrative costs include p~ocesaing applications.
The second refrigerator removal component will be admini(J.tered in
house. Removal and disposal COBts are listed below under
~Administrationn.
Xarketing
M~rketing expenses include developing, printing and distributing
program materials, advertisements, and billstuffeys.
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'.the InCenth~e budget for the program ia based on pal.'ticipation.
Rebates will bo the incentive mechanism used fot.' the single and
Il'\ultiple family d .... ·elling refrigeJ:"ator rebatp" component. The
incentive level and mechanism for the second refrigerator removal
component has not ~en determined at this point, but io not
anticipated to be greatel." than $50 per participant.
Cont 1ngoJl1lY
Since ~uch of the program expense is dependent on participation, a
$(i:1 900 contingency is being l"equested in the event that the program
iG over au~scribed.
PJ;""'J~M1 B'I,1dgat
Single Multiple Second
PemUy F .... ily Refrigerator
Rebate Reb",-te Removal Totr\l
Arhthti8tration $4,200 $3,300 $15,550 $23 .. 050
Marketing 2,000 2,000 3,500 7,500
Incentives 1'1,250 13,600 17,250 48,100
Contingenoy -2....!iQQ _2....!Q!! _.J...:l.QQ ~OO
Total $~5,950 $21,000 $39,600 $85,550
1'..mru::.m..H2nll.Q.l:1n..<t...lIlli! Bvalu.tion
Par.ticipation in the program will be closely monitored through a
(lata management system to track expected energy savinge and program
costa. A final evaluation of the programls cost-effectiveness and
eno~ savings will be conducted at the end of, the program. Energy
savings will be calculated using the recommended evaluation
protocols currently under development.
Participants will be surveyed during and after the program to
determino the 199~ prOgramlB overall effectivene8B. the
participants' mot.iv.a.tion for purchi:'llsing high officiency
refrigerators, and to identify program features which should be
modified.
It is anticipated that an annual refrigerator l"ebate program will
remain coat-effective until 1996 when a new DOB standard for
refrige:ratol' energy efficiency will be in effect. The 1996 standard
is expacted to be significantly more stringent than the existing
1993 standard. When the new standard comes into effect, staff will
reasse.an the need for a refrigeL'ator incentive program.
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Staff requea:to· the VAC to ).'ecom..1'1cnrJ Cound.l approval of the 1994
Reaidenti.al Refrigel"ator Replacement. and Relooval l'rogram and budget
as d.aacribed aoove. Staff will t'cturn to Council with an evaluation
of this program and recoo:n.endatione for future program direction.
Attachment 1 1993 Re(t" iger-Ator Hebate Evaluation
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City of Palo Alto Utilities
1993 Energy Bfficient Rofriger.to~ R~ato
Pilot Program Evaluation
bokgEOund
In 1993 the city of Palo A.lto· s Utilities 'departn-:ent imp)4}r.',.')nted 'a
pilot level program· to asoeSB t~e potential for cost effective energy
savings from a high efficiency ref::igerator r:cplace on burn-out tROB)
program. 'l'he results of the pilot llrogram wO\lld be used to decldt'!
whether the pl"ogra;m should be implemented on' ~ larger scale, and if 90.
how should the program be changed to increase ita m.,,\rkctability and
cost effectiveness.
!:.roqram DeBQr~
The program was designed to motivate r~oidents to P',t~-chaBe a high
efficiency refrigerator by offet'ing thc!~ a )"ehate that ..... ould coYer a
portion of difference in cost bet .... ·een the standal'd and h'igller
efficiency r:efrigerator ("first cost premium) .
To qualif:y for a rebate the new refrigerator' 8 enel:'gy Qfficiel1cy
r(\ting had to exceed the standard rating set by tile United State~
Department of Energy (OOE) by lOt or more. A reirlgsl-atol' .... hich .... ·as
rated 10% above the 008 standard, meant th.lt it used 10\ 16S8 eo(',r9Y.
Five efficiency levels were set with tlle rebate levol inc}:-eaelIl9 as
the efticiency level increased. This was done: to motivate COf)sume:rlJ"lo
purchase the m,oflt efficient refrigeratol·, Also. etaf! aB~IUfl'lcd that the
higher the efficiency rating of a refrigerator, tile 11ighe .. ' th.e Urnt
cost premium '''''ould be. therefore a higher rebate would be needod to
offset the cost.
Bffiaieaoy Level
(' above DOS standard!
10 to 14.99%
15 to 19.99%
20 to 24:99%
25 to 29,99%
30% and over
Rebate
Amount
$50
$75
$100
$]25
$175
The program targeted the single family replace on burn-out CROB)
market. ~i'he ROB market included all ctlotomers who wen! either planning
or needed to'l"eplace their existing refrigerator.
P~ogram Duration
The program ran fr'om May 28, 1993 through Sept.ember 6, 1993 tHernoxia!
Day weekend through Labor Day weekend}. The majority of opportunitieo
for refrigerator replacement occur during these three months due to
the high rate of refrigerator c('lmpreS90r failure Caused by wart"
weather. Additionally. during this time appliance retailors offer more
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promotional programs to get customers into their stores.
Program Dmplementation
'the City hired the Electric and Gaa Industries Association (BGIA) to:
develop and distribute all point.-of-purchase marketing and application
materialB~ procesD all rebate applications, and monitol-pl'ogram
participation. EOIA was chosen because of their experience in
administering PG&E' 8 refrigeratur rebate p~:ogram and their
relationship with local appliance retailers. Additionally, EOIA kept
an updated database of energy use and efficiency ratings for all
refrigerators Bold in the United States. The database was used to
qualify refrigerators for the rebate program and to calculate the
rebate levels per refrigerator.
Progr~ M&rketing
Asidi! from three utility bill inserts regarding the progra.m and
general refrigeratol" informat.i.on~ most of the marketing was done at.
the retail appliance store. It was determined that I,"oint of purchase
mal"keting would be the most effective way to reC'\ch :t"esidents who were
all"cady planning to purchase a new refrigeratol~.
~am Ob...i§.QtivM....§.1ld A~biElv@~nts
Obj-ectivoiO
The primary objective of program was to assess the potential for cost
effective energy (kilowatt hours) savings from the ROB market.
Additionally I from the prog:t"am staff would gain gelleral market
intelligence regarding: con'sumers purchasing motivations and habits
and the potential for other refrigel.-atol-programs.
Single Family ROB Potential and Program Participation
The program re~ulted in the purchase and installation of 362 efficient
refrigerators, about 87% of the total 418 single family ROB potential
during the program's time frame.
60% of the total refrigerators purchased were in the first t\l,'O
efficiency levels (10 to 19.99% above standard). 40% of the
refrigerators purcha~ed were in the third efficiency level (20 to
24.99% more efficient than the standard). There was no participation
in the 'last-two levels due to a lack of availability of these
refrigerators in the market' place.
Program Cost
Program coot were projected at $41,750 which was based on 400
participants in the program. Total program coat of $35~77S carne under
the projected budget because of the lower participation rate and
because their were no rebates issued at the two highest efficiency
levels. A total of $28,000 (18% of program costs} was awarded in
rebates. The average cost per refrigerator I including administration,
marketing and rebate a was $98.
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Energy and Dollar Savingo
The total energy saved by t'.he Cit~I' over the life of the refrige'rators
is estimated at 874,800 kWh. Half of the tot~l energy Daved were
achieved in t.he third efficIency level (20 to 24.99% more effiGient
than OOE standard). On average each participant will save a total of
2,417 kWh arid $263 over the 20 year life of the ref.l"igerato::s.
Coat BffectivaneS8
Overall the benefits of the program outweighed the cost. From a total
resourGe cost perspective the benefit of the program was the City's
avoided cost of purchasing electr.icity '(kilowatt hours saved times the
City's marginal cost fOl" electricity). The progre.rn costs included:
administrative expenses and the participants first cost premium. The
oonefit to cost ratio for the program was 1.12.
l!8SI!Onn LaarMd
One of the objectives of the program was to gain market intelligence
about the refrigel:.'ator replacement market. We wanted to leal'n what
motivated cuatOmAX'S to purchase a new l"efrigeratori their purchasing
habits~ (i.e., features, "brand, price, location); and what they did
with their old refrigerator. This information will be used to
determine the potential for futur.e ROB programs and for a refrigerator
buy-back program to remove old refrigerators retained as back-up
units. Below al"C soMe key findings gained thz."ough the program.
Replacement
~O\ of thc participants purchaaed the new refrigerator to replace
an existing refrigel:."ator.
10' of participants did not have an existing refrigerator
Motivation
73% of participants were ROB participants. that is they had
planned or needed to purchase a new refrigerator:
-56% of purchased a new unit because th~ old one was no
longer working,
-6% replaced their refrigerat.or becauf::Ie they felt the old
one would fail soon,
-12% replaced their refrigerator because they wen~
remodeling their kitchen.
2'/% of the participants purchased a new refrigerator for reasons
other than planned or due to failure.
Purchasing Habita
The most typical refrigerator ptn."chased in program \"'36 a r,leciiurn
size (approximately 19 cubic feet) top h"eezer style with an
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dutomatic defrost feature.
The averago reba,te given was $77 and the average percent
officiency above the DOH standard was 16\.
There are no refrigerator appliance stores in Palo Alto~
therefore participants had to go outside the a-rea to p~rchase
their refl"igarator. ,,~ large percentage of the participants, 45%~
purchd80d th'6ir refrigerator at various stores in Mountain View.
Oi8P<'B&l of Old Re[r1g~ ... t"r
GO\ of pan:ictpanto had their vendor remove their old
refl'igeratDr
32\" of the old refrigerators replaced will remain in use:
7\ of participants will keep their old refrigerator as a
back-up unit (thi9 is leo9 than the 12~ estimated in the1990
Resident.illl End-Uae SUI'vey)
-25\ of participants either donated or sold their old
rc'iiiyerator
OthGr Pindingo
Program part.icipation and first cost premiums by efficiency level
did Ilet ll1eeL 8taff'3 expectations. Staff had estimated high
participat ion in tile !i lost two efficiency levels because of the
expected low fb.'st cost premium over the standard refrigerator
a.nd low participation in the last tJll.-ee efficiency levels because
of expected high first coat premiums. I-Ihile there was no
p..'\\-tlcipation in the two highest efficiency levels, the third
level (2Q to 24.99~ more efficient than standard) made up 40\ of
the total pa.:t'ticipation. Staff could not find a relationship
.betweon efficiency and first cost premium. In many cases j higher
efficienc~f ):'flf~igerator8 cost less than its standard counterpart.
Staff bag ~QnQluded that popularity of a mCldel l size~ features,
looatiQJl, and bl'and playa Dtuch greater role in price than
effioienoy do ••.
~he_firat efficiency level (10 to 14.9\ above standard) was not
coot effective. The energy savings weL'e not great enough to
justify the cost of promoting and purchaDing these refrigerators.
Using WtA proved to be an effective way in which to administer
the program.
Multiple family property managers and owners often inquired about
multiple )"ebate6 for refrigerators for their rental properties.
Throughout tho program. staff received many inquiries from
cuutomer.s wanting to know where they could purchase refrigerators
in the last two effici~ncy levels~ but staff was unable to locate
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many and the ones available were very expen9ive.
Further Research Need~d
Many participants in the thlrd efficiency level (20 to 24.99t)
which received ~O\ of the pa:rticipation, purchased srMll
refrigerators (14 cubic feet). Mal'kat l"csea"(-ch should he'
conducted to determine whet?lcr participants purchuscd ama~ller
units becauee of the program :or to repla.ce '.existing small units.
Because 32\: of the tefriqcratora replaced will remain in
operation (1\ aa bac)c;",up unital _2$\ donated 01.' sold), l,>esearch
ohould be done to determine ""hat percent Of the_ refrigoratora
will remain ,in Palo' Alto. how ,ruuch energy the retrige:r:ators use,
the remaining life of the: :n~frigQrator6 • .and .,.,'hat could be done
to' motivate consumers to perrr.eiincntly l'cmov-e the' old units.
Research regarding the ou,pe:r high cnet·gy e'fficient units C2S\-or
more above the stand.1r(1) should be done to .'1ddl"cSB the local
availability, first coat pl'er:\iU!:l. and pOtential r7'0i1rket for these
units.
Research should be conducted to determine U~e ),:elationship
between pl'ice, energy efficiency, size. and st~'lc,
Research should be conducted to dete~,'-fninc the demrmd (01: saleo)
of energy effj.ciellt refr5.gel'atol>s in the abs(~nce of a progJ':am.·
Overall the program was cost etfective and PBlr-licipat.ion wa~ high.
St~ff :recommends that this program be continued on a full ncltle basis
wl.th the following modifications:
-Eliminate the fj rat effb;:hmcy level (10 to 14,9\ above
standa~d> because it is not cost effective.
-Adjust the rebate levels to better represent first cost premium~
however maintain them at an tncre.ao:ing l,'ate consistent with the
increase in efficiency levels.
-Add a m~ltiple family sector .... ebata com'pon~nl
~Pilot test a second ref~igera~or removal component
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