March 13, 2006

The Energy Policy Act of 2005Understanding & Opportunity

Bob Trate - CPMR

Agenda

• EPAct 2005 Overview

• EPAct 2005 Lighting Provisions

• ASHRAE 90.1-2001 Standard

• Tax Deduction Opportunity

• Lead with Lighting

• Getting Started

• Advance “Optanium” Electronic Ballasts

• Lighting Controls

EPAct 2005 Overview

Background• Signed by President George W. Bush

August 8, 2005• Over 3 years of legislative development• First major overhaul of the National

EPAct since 1992• Estimated to result in ~$500M in

incremental sales of lighting systems• Covers energy generation, transmission,

distribution, and energy efficiency

EPAct 2005 Overview

Objectives• Reduce the nation’s energy consumption

• Decrease pollutant emissions

• Cut dependence on foreign fuel

• Encourage innovation of products & systems

• Improve global competitiveness

EPAct 2005 Overview

Tactics• Reduce energy consumption at the application level

• Set product and system energy efficiency requirements – Strengthens requirement to use the EPA’s Energy Star

rated products/alliances

• Improve interior lighting, HVAC & building envelope systems

• Reward improvements with one-time tax deduction

EPAct 2005 Overview

• Tax deduction provisions are intended to allow credit for alternate design methods:– Automatic lighting controls

• Daylighting• Occupancy sensors• Dimming systems not included

– Improved fan motor efficiency– Variable speed controllers– Fuel cells– Low loss wire for building power

distribution

Federal Building Provisions• Existing federal buildings

– Reduce energy based on gross consumption per sq ft in 2003– Starts 2006, must reduce consumption by 2% per year– Goal in 2015, achieve overall 20% reduction vs. 2003– Install sub-metering by 10/1/2012, hourly reporting

• New federal buildings– Exceed ASHRAE/IES 90.1-2001 standards by 30% for

commercial buildings– Utilize sustainable design principles for siting, design and

construction

EPAct 2005 Overview

EPAct 2005 Lighting Provisions

Efficacy Standards for Lighting Products

• Exit signs– Must meet Energy Star Version 2.0 after January 1, 2006

• Torchiere– Must not consume more than 190 watts and not capable of

operating lamp with more than 190 watts after January 1, 2006

• Traffic Signals– Must meet Energy requirements from Traffic Signal Version 1.1

after January 1, 2006

• Medium Base Compact Fluorescent Lamps– Must meet August 9, 2001 Energy Star requirements after

January 1, 2006

EPAct 2005 Lighting Provisions

Efficacy Standards for Lighting Products• Ceiling Fan Kits – effective January 1, 2007

– Lamps, screw-based or pin-based must be packaged with light kit– Medium screw based socket must use CFL that meets Energy Star

3.0 requirement or another light source with equal or better lumen per wattage efficacy

• Magnetic Fluorescent ballasts – Energy Savings lamps (F34T12, F96T12) are added to the 2000 DoE

Ballast Ruling, effective 2009– Manufactured on or after July 1, 2009, sold after October 1, 2009

• Installed in a luminarie by luminarie manufacturer after July 1, 2010

• Mercury Vapor ballasts – Shall not be manufactured or imported after January 1, 2008

EPAct 2005 Lighting Provisions

Ballast Regulations

BEF = ballast efficacy factor

Requirement

2005 BEF Standards for Full-Wattage

T12 Lamps

2009 BEF Standards for Energy-Saving

T12 Lamps

April 1, 2006

EPAct 2005 Lighting Provisions

Replacement Ballasts• Can be manufactured until July 1, 2010

– Must be marked “For Replacement Only”– Shorter lead lengths– Packaging limits, 10 units or less

Ballast Exemptions • Dimming ballasts with 50% or lower of max. light output• F96T12HO ballasts for -200F ambient or outdoor signs• Power Factor <0.9 that are designed and labeled for

“Residential Use Only”

ASHRAE 90.1-2001

Lighting Power Density• ASHRAE 90.1-2001 set max watts per sq ft

(lighting power density)• Exterior and interior building have separate limits• Can tradeoff within exterior or interior, but not

across them• DOE utilizes as baseline for State energy codes

– Participation varies by state

• Two methods to measure lighting power density– Building Area– Space-by-Space (by room type)

LPD Calculation Methods

Building Area Method• Total wattage vs. established standard for the

entire building

Space-by-Space Method• Standards based on task specific & room type

requirements• May trade-off between wattage on interior

applications• Credits for control are not allowed

Lighting Power Densities

State Standards

State Standards for Lighting Power Density

States & EPAct 2005 Assistance

Individual State Assistance• Have conservation plan that targets a 25% efficiency

improvement in energy use by 2012 (vs. 1990 level) – Appropriations to states of $100,000,000 for each fiscal year 2006 &

2007, $125,000,000 for 2008

• Residential rebate programs use Energy Star Products

• New commercial construction must exceed most recent IECC State code by 30%

• Renovations of existing buildings must achieve 30% reduction in energy use versus level prior to renovation

Tax Deduction Opportunity

Tax Deduction Provisions• Efficiency based on ASHRAE 90.1-2001

• Certification of energy and power based upon 2005 California Nonresidential Alternative Calculation Method Approval Manual

• Deduction cannot exceed cost of upgrade, including materials, labor & design

• Deduction taken in the year placed in service

Tax Deduction Opportunity

Tax Deduction Provisions• Qualifying property must be put in service from

January 1, 2006 – December 31, 2007

• Up to $1.80/sq. ft. for “Energy Efficient Property” used for new construction or renovation– $0.60/sq. ft. each for interior lighting system, HVAC, and

building envelopes

Tax Deduction Opportunity

Two Types of Tax Deductions• Whole Tax Deduction

– Interior Lighting, HVAC, Building Envelope – One time deduction up to $1.80 per square

foot if ASHRAE 90.1-2001 is exceeded by >50%

• Partial Tax Deduction – Not all systems achieve 50% improvement

over ASHRAE 90.1-2001– One time deduction up to $.60 per square foot

for Lighting with >40% improvement

Interim Rules for Lighting Systems

Tax Deduction Eligibility• 25% - 40% improvement over 90.1-2001

• 50% improvement required for warehouses to achieve $0.60/sq. ft. deduction

• Controls Provisions: bi-level switching, automatic light shut-off, tandem ballast wiring

• Minimum requirements for light levels per IESNA

Tax Deduction Opportunity

Tax Deduction Recipient• Tax deduction recipient is dependent upon building

ownership– Private: Owner or party who paid to have the building

constructed or renovated– Federal, State, local/political subdivision: Party primarily

responsible for designing the property

• No deduction for low-rise residential buildings

EPAct 2005 & Lighting

Why lead with Lighting?• Lighting consumes up to

40% of total energy costs

• 80% of buildings use pre-1986 lighting technology

• Only 20% of buildings built before 1986 have since had lighting upgrades

• Lighting is the fastest and easiest way to upgrade

• Offers substantial and lasting energy cost reduction

• Average 2-3 year payback on lighting upgrade

EPAct 2005 & Lighting

Why lead with Lighting?

Example: T12 to T8 Lighting Upgrade3-YR Potential Energy Savings: $96,030

Energy Saved

97 watts per fixture$53.35 annual savings per fixture$32,010 total annual savings$96,030 total 3-yr savings

Current T12 System

300 Offices with two 4-lamp fixtures ea. 600 4-lamp Fixtures2400 40W T12 Lamps 2401 Magnetic Ballasts (2 per fixture) 172 Total System Watts

Based on 5500 annual burn hours and electricity rate of $.10 per kWh.

New T8 System 300 Offices with two 4-lamp fixtures ea. 600 4-lamp Fixtures2400 F32T8 25 watt Lamps 600 LW hi-efficiency electronic ballast 75 Total System Watts

Lighting upgrades yield great returns – without incentives!

EPAct 2005 & Lighting

Sample Calculation:

Partial Deduction for 48,000 Sq Ft Lighting Upgrade

• 300 Offices @ 160 Sq Ft each = 48,000 Sq Ft

• Lighting power density improved by 37.5% over ASHRAE 90.1-2001

• $.54 per Sq Ft tax deduction

• Corporate tax rate of 33%

• 48,000 Sq Ft. x $.54 x 33% = $8,554 one-time tax savings

Tax Savings are the icing on the upgrade cake!

Getting Started

Lead with Lighting• Reduce building-wide energy consumption by

up to 20%

• Add cash savings annually to bottom line profitability

• Earn EPAct 2005 one-time tax deduction to accelerate ROI

• Enhance property value and marketability

• Increase tenant safety, satisfaction, productivity

• Meet requirements for LEED and sustainability

Getting Started

Talk to the Experts• Request a SmartCalc audit from Advance

• Contact an energy service company (ESCO)

• Talk to a utility representative

• Consult an accredited lighting designer

Getting Started

Talk to Advance• Visit the Advance energy bill website

• Know why efficient lighting starts with the ballast

• Explore a full range of ballast options

• Keep your future lighting options open

www.energybillinfo.com

Getting Started

Why Advance?• Ballast technology leadership

• Solutions that support unrestricted lamp, fixture and control innovation

• Driving higher efficiency lighting systems

• Brand most specified by electrical contractors

• Industry leading Plus 90 system warranty

Introducing OptaniumIntroducing Optanium™™ 2.0 2.0 Introducing OptaniumIntroducing Optanium™™ 2.0 2.0

Moving beyond high-efficiency to Moving beyond high-efficiency to True Performance TechnologyTrue Performance Technology

Electronic Ballast TimelineElectronic Ballast Timeline

1980’s 1990’s

2nd generation -“Centium” “RCN-VCN” dedicated voltage, Mark V & Mark VII

1st generation – “REL-VEL” dedicated voltage

’98 – ‘04

IntelliVolt versions of “Centium”, “Smart-Mate” & Mark VII. Also Mark X

’04 – ‘05

“RCN-VCN” Centium slated for discontinuation – “Optanium” 1.0 introduced

2006

“Optanium” 2.0 and “Energy-Saving” T-8 Lamps

T-12 to T-8 Retrofits – Some or no lighting controls

T-12 & Std T-8 to High-Efficiency Electronic and “Energy-Saving” T-8 Retrofits – Lighting Controls standard – Systems integration

What is “OptaniumWhat is “Optanium™™ 2.0”? 2.0”?

Original Optanium™ (aka Optanium™ 1.0):

High Efficiency Instant Start Only Dedicated voltage Lamp auto-restrike

Optanium™ 2.0 adds features and functionality

Optanium™ 2.0…

Not just moving beyond dedicated voltage Optanium, but eclipsing all competitive

offerings as well…..

What is “OptaniumWhat is “Optanium™™ 2.0”? 2.0”?

OptaniumOptanium™™ 2.0 2.0

True Performance TechnologySM

…

A “Twelve Step Program” for high performance-high

efficiency T8 lighting

The OptaniumThe Optanium™™ 2.0 Advantage 2.0 Advantage

1. High Efficiency Ballast Ballast consumes approx 3 watts less than standard

electronic IntelliVolt technology

Most high-efficiency ballasts stop here. Sure, some brands add another feature or two… but the total performance of Optanium 2.0 is unmatched.

True Performance Technology begins where standard high-efficiency ends…

1. High Efficiency Ballast Ballast consumes approx 3 watts less than standard

electronic Intellivolt technology

3. Optimize Lamp Life with Starting Options Instant Start – meets ANSI lamp ignition specifications of

<100 ms Programmed Start – optimized performance for frequent

on/off applications

2. Energy Savings – Today AND Tomorrow Constant current design delivers maximum energy-saving

performance from standard AND energy-saving T8 lamps

The OptaniumThe Optanium™™ 2.0 Advantage 2.0 Advantage

6. Suitable in Temperature-Sensitive Applications -20° start temp for 32W T8 lamps on instant start models Ideal for parking garages, warehouses and cold storage

areas

5. No Interference with Security Systems Operating frequency range is 42-52 kHz Avoids 30-40 kHz IR range Avoids 54-62 kHz anti-theft device range

4. Trouble-Free Installation Leads exit ballast on the correct ends Reduces installation and maintenance costs Significantly lowers risk of pinched leads

The OptaniumThe Optanium™™ 2.0 Advantage 2.0 Advantage

9. Meet new NEMA/CEE High Performance T8 Lighting System Specifications Advance’s broad range of instant and programmed start

models qualify users for Super T8 rebates

8. Lower Maintenance Costs Lamp auto-restrike capability allows the ballast to ignite

replacement lamps without cycling the power

7. Anti-Arc Protection UL Type CC rating protects system components in event

of damaged sockets or poorly seated lamps, without compromising other system capabilities

The OptaniumThe Optanium™™ 2.0 Advantage 2.0 Advantage

10. Increased Light Quality Anti-striation circuitry eliminates lamp striation problems

11. Flexible Solutions Available in low, normal, and high ballast factor

configurations to meet a wide range of application needs

12. Extended System Warranty Protection Regardless of lamp manufacturer or wattage, Advance’s

PLUS 90 Protection warranties the entire system for 90 days beyond the lamp manufacturer’s published warranty

The OptaniumThe Optanium™™ 2.0 Advantage 2.0 Advantage

Why Choose Advance Why Choose Advance OptaniumOptanium™™ 2.0? 2.0?

Why Choose Advance Why Choose Advance OptaniumOptanium™™ 2.0? 2.0?

Feature ATCOthers meeting

all specs

High-efficiency DesignConstant Current DesignInstant and Programmed Start ModelsLeads Exit Ballast CorrectlyAvoids Anti-theft Device Interference Low Temp Lamp IgnitionAnti-Arcing Type CC Lamp Auto Re-strike Many Skus Meet CEE/NEMA SpecsLamp Anti-Striation Low, Normal, High BFExtended System Warranty

NONE

Unparalleled FeaturesUnparalleled Features

Unparalleled ChoiceUnparalleled Choice

Comprehensive system warranty puts the lamp choice back in the end-user’s hands…

…without sacrificing warranty protection.

ONLY from Advance… where great lighting starts.

Ballast Factor In Terms of Control

Electronic ballasts are offered with different ballast factors (refer to Advance catalog)

Selection and application of ballast factor can act as a form of lighting control

Reducing the ballast factor reduces light output and saves energy

Ballast Factor Defined

“Measure of light output from lamp operated by commercial ballast, as compared to laboratory standard referenced ballast specified by ANSI.”

You have 3 ballast factor choices when using electronic ballasts:– Normal ballast factor (≈.88)– High ballast factor (≈1.20)– Low Ballast factor (≈.75)

Ballast Factor Is Important

You can control the amount light you need by selecting the correct ballast factor

Low ballast factor = less light and saves energy High ballast factor = more light and less energy

efficient Know when and where to use the different

ballast factors

0 800 1600 2400 3200

BF

Lumens

1.00 2950 Lumens / lamp 64 WattsReference

Ballast

.87 2567 Lumens / lamp 58 Watts Normal PowerBallast

.75 2213 Lumens / lamp 51 Watts Low PowerBallast

1.20 3540 Lumens / lamp 77 Watts

High Power Ballast

Ballast Factor & Light Output

Performance Comparison of 2 – F32T8 Lamps

Performance Comparison of 2 – F32T8 Lamps

Fluorescent Dimming

An excellent method of control resulting in exceptional energy savings

Varies ballast factor from 1.0 to .05 % Advance offers 2 types:

– Mark X® – Powerline 2-wire– Mark VII® – 0-10 Volt D.C. Control

Multiple control manufacturers including Leviton Mfg.

Leviton Lighting Controls

PAC Presentation Template 48

Lighting Energy Standards, LEED & Energy Tax Bill

Energy Codes

Safety or Building Codes

Dark Sky Codes or Ordinances

Lamp/Ballast Disposal

“Energy issues overlap different codes.”

Four Code Types to Consider

PAC Presentation Template 49

Lighting Energy Standards, LEED & Energy Tax Bill

ASHRAE/IESNA 90.1 – 2004Advanced Energy Design Guide for Small Office Buildings

IECC – 2003 (next release due January 2006)

USGBC LEED 2.1 (next release 2.2 due First of 2006)

Advanced Buildings Benchmark V1.1 (V2 due spring of 2006)

CHPS (schools only, started in California but followed in Washington and Massachusetts and work has started on a national version)

CEC Title 24 2005

“Energy standards are authorized models used to define design criteria to meet or exceed code requirements.”

National Energy Standards

PAC Presentation Template 50

Lighting Energy Standards, LEED & Energy Tax Bill

Determine a power density rate and lighting control requirements for allowable energy consumption for whole buildings, spaces, or occupancy

Typically expressed in Watts per Square Foot (W/SF) as Lighting Power Density (LPD)

Can include minimum efficiencies for equipment typically expressed in Lumens per Watt

States adopt standards or criteria and enforce as code

“Energy Codes define the maximum usage, not the optimum design.”

Lighting Energy Codes

PAC Presentation Template 51

Lighting Energy Standards, LEED & Energy Tax BillEPACT requires all states to have an energy code equal or better than 90.1-1999

Lighting Energy Codes

PAC Presentation Template 52

Lighting Energy Standards, LEED & Energy Tax BillEPACT requires all states to have energy code equal or better than 90.1-1999

Lighting Energy Codes/Standards

Lighting Power Allowances (W/Sq.Ft.) Building Area Method

90.1-2001

90.1-2004

IECC 2003

IECC 2006*

LEED 2.1**

LEED 2.2**

T24 2001

T24 2005

AB Benchmark

v1.1 Hotel/Motel 1.5 1.0 1.0 1.0 1.5 1.0 2.0 1.1 1.0

Office 1.3 1.0 1.0 1.0 1.3 1.0 1.2 1.1 0.9 Schools 1.5 1.2 1.4 1.2 1.5 1.2 1.4 1.2 1.2 Manufacturing 1.6 1.3 1.7 1.3 1.6 1.3 1.2 1.1 1.3 Dining 1.4 1.3 0.9 1.3 1.4 1.3 1.1 1.1 1.3 Warehouse 1.1 0.8 0.8 0.8 1.1 0.8 0.6 0.6 0.6 Retail (whole bldg) 1.9 1.5 1.7 1.5 1.9 1.5 1.7 1.5 1.3

* Pending approval September 2005** LEED is a voluntary program and follows ASHRAE or local energy codes as a prerequisite.

PAC Presentation Template 53

Lighting Energy Standards, LEED & Energy Tax BillEPACT requires all states to have energy code equal or better than 90.1-1999

Lighting Energy Codes/Standards

* Pending approval September 2005** LEED is a voluntary program and follows ASHRAE or local energy codes as a prerequisite.

Lighting Control Requirements/Credits Control Scheme

90.1-2004 >5000sf bldg

IECC 2006* >5000sf bldg

LEED 2.2** T24 2005 AB Benchmark v1.1 >5000sf bldg

Daylighting Perimeter Zone

Control 15’ & max.

200 sf 50% ≥250sf 50% & max. 2500sf

Skylight Zone Control

Automatic multi-level or TC

≥2500sf

50% & max. 2500sf

Bi-Level Switching

Required Required Required

Automatic Shutoff

TC or Occ Sensor

4-hour max override

TC<25,000sf zone

2-hour max override

TC or Occ Sensor

≤5000sf per zone TC ≤20,000sf

open retail, indust., auditoriums

≤2500sf per zone TC – bldgs ≤10,000sf, ≤5000sf per zone -

>10,000sf Occupancy Sensors

Classrms, meeting rms, break rms, 30 minute time-

out

Classrms, meeting rms, break rms, 30 minute time-

out

PAF Credits ≤300sf, 30 minute time-out, plus

restrms, classrms, meeting rms

Exterior Photocell or TC

Photocell or TC

Photocell or TC

Photocell or TC Photocell or TC

PAC Presentation Template 54

Lighting Energy Standards, LEED & Energy Tax Bill

Determines minimum amount of light and can be contradictory to energy codes

Emergency lighting

Accessibility codes (ADA and the like)

May require energy code compliance

Safety & Building Codes

PAC Presentation Template 55

How Leviton is Ready to Support Energy Programs

Lighting Control Requirements

Lighting Control Requirements/Credits Control Scheme

90.1-2004 >5000sf bldg

IECC 2006* >5000sf bldg

LEED 2.2** T24 2005 AB Benchmark v1.1 >5000sf bldg

Daylighting Perimeter Zone

Control 15’ & max.

200 sf 50% ≥250sf 50% & max. 2500sf

Skylight Zone Control

Automatic multi-level or TC

≥2500sf

50% & max. 2500sf

Bi-Level Switching

Required Required Required

Automatic Shutoff

TC or Occ Sensor

4-hour max override

TC<25,000sf zone

2-hour max override

TC or Occ Sensor

≤5000sf per zone TC ≤20,000sf

open retail, indust., auditoriums

≤2500sf per zone TC – bldgs ≤10,000sf, ≤5000sf per zone -

>10,000sf Occupancy Sensors

Classrms, meeting rms, break rms, 30 minute time-

out

Classrms, meeting rms, break rms, 30 minute time-

out

PAF Credits ≤300sf, 30 minute time-out, plus

restrms, classrms, meeting rms

Exterior Photocell or TC

Photocell or TC

Photocell or TC

Photocell or TC Photocell or TC

Energy Savings Using Sensors

Source – Leviton Manufacturing

Occupied Area Typical Energy Savings

Private Office 13 to15%

Open-Plan Office 20 to 28%

Classroom 40 to 46%

Conference Room 22 to 65%

Bathrooms 30 to 90%

Corridors 30 to 80%

Summary

Identify end users who may benefit from “EPAct”, Advance “Optanium”, and lighting control technology– Educational– Healthcare– Property Management Firms– Warehousing and distribution centers– Lighting intensive industrial users

Summary - continued

Understand the application choices– High-Efficiency electronic ballasts– Energy-saving T-8 lamps– Lighting controls– Ballast factor– Mercury vapor being discontinued

Inform end users of D.O.E. legislation affecting magnetic ballasts

Summary - continued

Understand the application of ballast factor Present the benefits of “EPAct” Adjust your inventories to include “IntelliVolt

designs where appropriate– Fewer SKU’s for both you and your customer– 2nd generation design– Lower total harmonic distortion