Midwest Energy Efficiency Alliance program webinar

November 10, 2009

Midwest Consumer Electronics Program (CEP)

Webinar Outline• Utility Roll Call (after roll call, please mute calls until Q&A!)

• Introduction of Speakers– Jay Wrobel, Director of Programs - MEEA

– Tim Michel, Senior Program Manager - PG&E

– Stephanie Fleming, Senior Manager, Residential Sector – NEEA

• Why the CEP is important for the Midwest

• Why MEEA is recommending this particular program

• Consumer Electronics Program Overview– CEP addresses program barriers inherent with consumer electronics programs

• Marketing Opportunities through CEP

• Program Results & Savings to Date (in other regions of US)

• 20 – 30 min for Q&A (please hold questions)

CEP – A Great Opportunity for Midwest Sponsors

• Large claimed energy savings potential– Electronics account for 10% of residential electric consumption and is growing!

– This is a turn-key program to reduce energy use and claim the savings

– Dynamic program that evolves with the changing product efficiencies in the market

• Highly customizable– Utility chooses the products to be covered (TVs, computers, monitors, etc)

– Utility chooses incentive $/unit

– Utility sets total incentive budget

– Utility can pilot with limited partners or reach all major retailers

• Offers utility-specific PoP signage and marketing opportunities

CEP – Why MEEA?

• MEEA has a history of administering multi-utility/multi-state programs

• One of MEEA’s missions is to promote best practices around emerging technology issues

• By coordinating, the overall program costs are reduced to all utilities

• MEEA’s role is then to:

– Sign contracts with retailers, making it easy for utilities to join

– Enable quick launch by leveraging existing program infrastructure

– Reduce overall program costs (administration and implementation)

– Collect and disseminate all program reporting data

– Assist in retailer relations in the Midwest

– Simplify program payment requirements (not paying each retailer)

– Ease transition from pilot phase to full program launch

• Voice for participating utilities for future program planning

Mid-Stream Incentive Program & Costs

A midstream incentive program for electronics is the most cost-efficient & effective implementation strategy

Handling downstream rebates for large volumes of qualifying products would be prohibitively expensive & ineffective because the end-user rebate is small relative to the purchase price of the product, such as $10.00 on an $800 flat screen TV.

A midstream program strategy is effective because a small $10 -$20 incentive multiplied by the large volume of unit sales made in the service territories of participating utilities results in a significant financial motivator for a retailer.

An aggregation of utility programs has a significant impact on the retailer’s decision to add higher energy efficient products to their assortments and market those products with more intensity and frequency

Program economics:

The program has an overall TRC of between 2 and 3.

The total cost per kWh saved for the first year is $.005 to $.010 per kWh for market outreach, data management and detailing

Claimed savings can be quite high – e.g. 1 incented TV = 137 kWh

CEP Program Elements

• CEP currently running in 5 Western states – CA, ID, MT OR, WA

• Upon execution of a non-disclosure agreement with PG&E and the letter of intent to participate in the program, program sponsors will have the right to use all of the existing data and processes of the CEP.

• Joining the program leverages these key elements of the existing Program:

– Work papers

– Account relationships and account management processes

– Agreements with retailers

– Data collection and management processes

– Qualifying model database and validation processes

– Performance measurement processes: data collection, management, and analysis

– Marketing tactics and collaterals approved by ENERGY STAR® and participating retailers and OEMs

– Technology roadmap

Program Design – Addressing Barriers

Program Barriers New Processes to Alleviate Barriers

Very busy / distracted industry participants• In most organizations the buyer is the single point of contact• We need to be easy to do business with

Continuous / experienced channel outreach• A market facing team that knows the market• Clear and succinct communications• On point of tactical communications

Products evolving quickly – challenging any specifications in place• Need to keep an eye on the market & influence specifications • Need to regularly update work papers• Need to manage Energy Star / CEE initiatives

Product / measure management• Developed processes and organization to annually update

measures and expand portfolio• Many products; therefore utilities could benefit through aligning

roadmaps and focused efforts• CEP program develops an annual technology road-map which

identifies new measures to add to the program

Base line data is not readily available

• Data submitted for historic Energy Star products often does not track criteria for new Energy Star specifications, limiting base line comparisons

• Model numbers among manufacturers, retailers and Energy Star do not match

The program has developed base line sales data for 2008 and 2009• Includes Energy Star 3.0, CEE Tier 2 & 3• Modeled Energy Star 4.0 and 5.0 (historic and manufacturer data)• Verified that products qualify for the program, outreach to

manufacturers and retailers to understand naming conventions• Retailers product lists, on average 27% matched Energy Star. Our

proprietary database is now at +90%.

EM&V model did not exist and needed to be created• Incorrect to use downstream EM&V approach

EM&V planning and tracking • Built a mid / upstream EM&V model• Real time on-line tracking of communications to and from channel

participants to capture industry interactions

Program Flexibility

CEP offers utilities the flexibility to meet their own budgetary and regulatory guidelines

Maintain / Enhance local relationships and branding - own brand on signage

Utility to choose Program participation

Products

Channels

Incentive levels

Alliance – help shape the future of the program

The program provides a roadmap for capturing savings in consumer and business electronics for the next several years

CEP Marketing Opportunities

Store detailing and training

Provided by Detailing Service

Options for own field service team

In-store Events & End Caps

Advertising and PR events

Web Marketing

POP

Results to date: Agreements

In DiscussionUnder Agreement

Retailers

Private Brand changed TV supplier to eco panel

Added ES 4.0 Desktops to assortment

Added ES+15% and ES+30% TV’s to assortments

Manufacturers

Added specifications to new product development

Supported model number translation efforts

Creating energy efficiency landing pages

Consumer Electronics Association (CEA)

Arranged Utility Program meeting at CES 2009

ENERGY STAR®

Co-branding strategy

Supported development of a 2-tier specification for TVs

Projected Results vs.

PlanPG&E SMUD NEEA*

Plan25 GWH 4.27

MW3.25 GWH

.5 MW8.76 GWH

1MW

Results42.7 GWH6.41 MW

7.0 GWH1.05 MW

9.96GWH1.49 MW

% of Plan171% GW150% MW

215% GWH210% MW

114% GWH149% MW

Note From Best Buy

“Best Buy would appreciate if Utilities throughout the US would combine Electronics programs for effectiveness and simplicity. Our buyers are extremely busy and having a common program makes our ability to support utility programs even stronger!

Best Buy is pleased to be a participant in the BCE program; we believe our partnership with QDI Strategies, Energy Solutions and the participating Utilities is instrumental in driving energy efficiency throughout the Consumer Electronics sector.”

David Hilbrich Sr. Specialist – Green Products & Solutions

Similar endorsements are available from Wal-Mart Corp. Sears and Costco

Results to Date: Impacts & Savings

* Estimates based on utility reporting to date - actual will be higher

Consumer Electronics Program Alliance

PG&E SMUD NEEA

Who we are

Regulated Utility

15 million customers

Shareholders

Municipal Utility

590,000 customers

Customer owners

Alliance of Utilities

11.5 million customers

130 utilities in the Northwest

Why we started an electronics

program

Energy Savings Potential

Portfolio Diversification

Energy Savings potential

Market Transformation

Customer Service

Energy Savings Potential

Opportunity to accelerate market transformation

Background Work required for

Program Start-up

Conducted market & technology potential studies 2005-2008

Developed work papers

Dedicated internal resources to run program

Initial advertising campaign

Budget / staff dedication for 2009 program

Conducted market and technology potential studies

Dedicated internal resources to run program

Challenges to start-up

Program design

Regulatory requirements

Evaluation for up/mid stream

Program design

Understanding of marketplace

Internal operations adjustments

Program design

Funding

Technical Specifications

Contracts

Benefits to working with Alliance

Program

Cost-sharing opportunities

Increase market share potential

Drive Retailers, OEM’s and Stake-holders for greater efficiency

Marketplace influence

Leverage combined funds

Shared successes

Effective, able team to address shared issues

Drive Retailers, OEM’s and Stake-holders for greater efficiency

Drive Retailers, OEM’s and Stake-holders for greater efficiency

Cost Sharing

Opportunity to influence CE Roadmap

Wrap-Up and Questions

• CEP – A Great Opportunity for Midwest Sponsors

– Large claimed savings potential

– Highly customizable

– Utility-specific PoP & marketing opportunities

• Acting as the CEP regional administrator, MEEA will:

– Maximize economies of scale & reduce program costs for all utilities involved

– Sign contracts with retailers & implementers, making it easy for utilities to join

– Enable quick launch by leveraging existing program infrastructure

– Collect and disseminate all program reporting data

– Simplify program payment requirements

– Ease transition from pilot phase to full program launch

– Provide voice for participating utilities for future program planning

• QUESTIONS?