2010 Electric Gas Conservation Programs PROGRAM UPDATE

2010 Electric & Gas Conservation Programs PROGRAM UPDATE Connecticut Energy Efficiency Fund Programs for Commercial & Industrial Customers A Joint Presentation by: CL&P’s and UI’s Conservation and Load Management Department

ENERGY CONSERVATION MANAGEMENT BOARD Kevin Hennessy Connecticut Business & Industry Association Jeff Gaudiosi, Esq. Manufacturing Alliance of Connecticut C&I Program Vision The overall Vision for the future evolution of the CEEF C&I programs is to cost-effectively support a sustainable and competitive business climate for Connecticut’s businesses and industries based on bottomline solutions for economic competitiveness, environmental stewardship, and social responsibility.

Agenda CT Energy Efficiency Fund (CEEF) C&I 2010 Program Budgets/Caps C&I Programs American Reinvestment & Recovery Act Training Important Reminders Contacts Questions? 3

Energy Efficiency & Background Connecticut Energy Efficiency Fund (CEEF) was created in 1998 by CT State Legislature Energy efficiency is a valuable resource for Connecticut, it: ◦ Reduces air pollutants and greenhouse gases ◦ Creates monetary savings for customers ◦ Reduces need for more energy generation ◦ Creates jobs Money for programs comes from electric and natural gas utility customers ◦ Electric customers pay 3 mils per kilowatt-hour ◦ Natural gas programs are funded through gas utility bills and approved by the Department of Public Utility Control Programs are for firm gas customers only 4

2010 C&I Program Budgets* CL&P UI YGS CNG SCG $47, 300, 000 $11, 838, 953 $ 2, 290, 000 $ 1, 409, 976 $ 1, 353, 335 *Proposed – Pending DPUC Approval (Dockets 09 -10 -03 & 08 -10 -02) Includes CEEF, RGGI, ODR and ARRA Funds 5

2010 Project Incentive Caps $300 K Incentive Cap for each meter per year AND $750 K per year Per Federal Tax ID ◦ This Incentive Cap is not applicable for natural gas projects 6

American Recovery and Reinvestment Act of 2009 (ARRA) ARRA Grant from Connecticut’s Office of Policy Management for the Energy Opportunities and Small Business Programs ◦ CL&P $4. 6 M ◦ UI $ 1. 15 M Funding is targeted to all fuels. Additional requirements: ◦ Davis-Bacon ◦ Buy American 7

ARRA Buy American provisions require items installed in public buildings be manufactured in the US unless no alternative is available. Davis-Bacon is the prevailing wage law. Requires any individual that is working on a job funded in whole or in part by ARRA to be paid the prevailing wage. Customers must provide weekly timesheets to the respective utility documenting the wages paid to all of the workers on the installations. Other provisions, such as posting appropriate DOL wage posters on the job site are required. 8

Program Highlights Program Enhancements from August 2009 are still in effect: ◦ ◦ Comprehensive Approach Energy Management Systems Lighting Financing 9

Commercial & Industrial Programs New Construction, Major Renovation & Equipment Replacement Retrofit Projects & Small Business Operations & Maintenance Projects Financing 10

New Construction, Major Renovations & Equipment Replacement Energy Conscious Blueprint Program Captures electric and natural gas savings where they are cost-effective; during design Provides $ incentives for installing: energyefficient lighting*, lighting controls, HVAC equipment, motors, refrigeration, process equipment, gas boilers, VFDs, etc. Covers up to 95% of the incremental cost of installing measures Prescriptive incentives are used where available Subject to Utility Caps * Lighting projects use watts/sq. ft. calculations relative to ASHRAE 90. 1 -2004 baselines 11

New Construction, Major Renovations & Equipment Replacement Energy Conscious Blueprint Program Provides prescriptive rebates for: ◦ CT Motor Up Rebate for Motors ($ per motor) ◦ CT Cool Choice for HVAC Equipment ($ per ton) ◦ Gas Food Service Equipment ($per unit) Utility prescriptive caps apply to the following: ◦ VFDs ($ per hp) ◦ Gas Boilers ($ per MBH) ◦ Window Glazing ($ per sq. ft. ) ◦ Pool Covers ($ per sq. ft. ) ◦ Cool Roofs (White Roofs); ($ per sq. ft. ) ◦ Air Compressors (semi-prescriptive) From 5 hp to 100 hp ($ per hp) 12

New Construction, Major Renovations & Equipment Replacement Lighting Incentives If lighting design is below code by >10%: ◦ Incentive will be the lesser of $0. 15 sq. ft or $50 per fixture If lighting design is below code by >30%: ◦ Incentive will be the lesser of $0. 50 sq. ft or $50 per fixture Occupancy sensors receive $20 per fixture controlled However: ◦ Buildings over 5, 000 sq. ft. must have lighting control strategy (as required by code) ◦ Incentives will be offered for occupancy sensors on projects that have another control system that turns them on/off, i. e. , Energy Management System 13

CEEF-funded programs can help if you are building new, making renovations, or adding equipment • Early involvement key • Incentives address the incremental costs for the typically more costly energyefficient equipment 14

Retrofit Energy Opportunities Program Encourages customers to replace functioning equipment with more energy-efficient options (excludes equipment that is > 75% of its useful life – use ECB rules) Provides incentives to customers who install electric and/or natural gas measures: energy-efficient lighting, lighting controls, compressed air systems, motors, HVAC, VFDs, steam traps, etc. Covers up to 40% of the installed cost for lighting and nonlighting measures Prescriptive incentives are used where available Subject to Utility Caps 15

Retrofit Energy Opportunities Custom Lighting Incentives Can be earned if redesign of lighting system exceeds ASHRAE 90. 1 -2004 by 15% ◦ Must use watts/sq. ft. methodology ◦ Must submit dimensioned floor plans Will be the lesser of 40% of installed cost or Utility Caps Solid state or induction lighting eligible for up to 50% of installed cost Express Lighting Rebate Prescriptive dollar per unit Subject to Utility Caps 16

Lighting Incentive Enhancements ◦ For Lighting Measures, EO and SBEA offers CEEF incentives of: Up to 40% of the installed cost ◦ To encourage and promote emerging technologies, an incentive of up to 50% will be offered for installation of qualified solid state lighting (LED) and induction lighting technologies. ◦ This higher incentive will only be applied to qualifying LED and induction lighting technologies. 17

LED Categories CL&P and UI have clustered LED categories into groups to establish CEEF Incentive eligibility: Group A – Energy Star® List for LED Products ◦ ◦ Recessed, surface and pendant-mounted down luminaries Under-cabinet shelf-mounted task luminaries Wall wash luminaries Bollards Only Group A luminaries identified on the Energy Star® List will be eligible for CEEF program incentives. http: //www. energystar. gov/index. cfm? fuseaction=ssl. display_produ cts_com_pdf 18

LED Categories Group B – Design. Lights™ Consortium ◦ ◦ ◦ ◦ Outdoor Pole/Arm-Mounted Area and Roadway Luminaries Outdoor Pole/Arm-Mounted Decorative Luminaries Outdoor Wall-Mounted Area Luminaries Parking Garage Luminaries Track or Mono-point Directional Lighting Luminaries Refrigerated Case Luminaries (not eligible for 50% incentive) Display Case Luminaries The technical requirements for Group B luminaries can be found at: http: //designlights. org/solidstate. manufacturer. requirements. php Group B products that have not been submitted to Design. Lights™ Consortium (http: //designlights. org/index. php) for qualification may be approved for CEEF program incentives by CL&P/UI until March 31, 2010. After this date, all Group B products must be submitted to, and approved by, Design Light Consortium to qualify for CEFF program incentives. Effective, June 1, 2010 Group B Luminaries must be identified on the Design. Lights™ Consortium Qualified Product List to be eligible for CEEF incentives. This includes any product which has previously been approved by CL&P/UI. 19

LED Categories Group C – LED Lamp Requirements ◦ ◦ ◦ ◦ Outdoor Pole/Arm-Mounted Area and Roadway Lamp retrofit Outdoor Pole/Arm-Mounted Decorative Lamp retrofit Outdoor Wall-Mounted Area Lamp retrofit Parking Garage Lamp retrofit **Omnidirectional: A, BT, P, PS, S, T **Decorative: B, BA, C, CA, DC, F, G **Directional: BR, ER, K, MR, PAR, R **Non-standard The technical requirements for qualifying Group C products are provided by CL&P/UI. Group C Technical Requirements are in your package and will be available on the Utility Web sites. LED Lamp replacement requirements will be updated semi-annually. Products that meet these requirements will be eligible for CEEF incentives. All LED products will be reviewed on per project basis. For Group C items identified above with “**“, the Energy Star® requirements are finalized. Effective August 31, 2010 only fixtures identified on the Energy Star® list will be eligible for CEEF incentives. 20

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Comprehensive Initiative ◦ A Comprehensive project must meet the following criteria: Must have energy savings from at least two electric end uses and at least two measures At least 15 percent of the value of the project’s electric energy savings and peak summer demand reduction must be in a non-lighting end use (based on $0. 50 per annual k. Wh and $700. 00 per k. W) No one measure can have 85 percent or greater of the value of the project’s energy savings and peak summer demand reduction (based on $0. 50 per annual k. Wh and $700 per k. W). * For more information, refer to Comprehensive Guide and Q&A in your package 23

Comprehensive Incentives Lesser of: ◦ 50% installed cost (electric portion only) ◦ Buy-down of project to 2–year payback based on customer electric metered savings ◦ Energy savings caps of up to $0. 50/annual k. Wh + $700. 00/summer peak k. W combined (see example) Additional Comprehensive incentives for firm gas customers: ◦ 10% added to all qualifying gas measures (unless capped at Utility energy savings caps) 24

Installed Three Measures Calculated Energy Savings Measure End Use M 1 M 2 M 3 Lighting Cooling Other - Pump/Fan Motors 24, 000 k. Wh 12, 800 k. Wh 16, 000 k. Wh 6 k. W 16 k. W 4 k. W 52, 800 k. Wh 26 k. W Total M 1 M 2 M 3 Value based on $0. 50 k. Wh and $700. 00 k. W Energy Value Lighting $ 12, 000 Cooling $ 6, 400 Other - Pump/Fan Motors $ 8, 000 Total M 1 M 2 M 3 Lighting Cooling Other - Pump/Fan Motors Total Calculated Demand Savings $ 26, 400 Demand Value $ 4, 200 $ 11, 200 $ 2, 800 $ 18, 200 Total Energy + Percent of Demand Value Savings $ 16, 200 36% $ 17, 600 39% $ 10, 800 24% $ 44, 600 25

Energy Management Systems (EMS) Existing EMS may be upgraded or replaced regardless of system age. No incentives will be offered for repair or replacement of pneumatic controls with pneumatic controls. For qualifying projects, the incentives will be calculated based on the lesser of: ◦ 40% of the installed cost ◦ $500 per point (total system points impacted) ◦ avoided energy cost (1 yr) - up to $0. 30/Annual k. Wh and $700. 00/ summer peak k. W combined ◦ Refer to EMS guidelines in your package 26

Operations & Maintenance Improves electrical and natural gas efficiency through changes and repairs that can be classified as maintenance procedures rather than capital investments Not intended for normal preventive maintenance, repetitive procedures or to subsidize major equipment purchases Provides incentives for repairs or replacements for defective steam traps, condensate return, compressed air systems (i. e. , repair of leaks) and EMS maintenance, such as: replacement of defective sensors, relays, actuators and reprogramming Incentives of up to 40% of the installed cost for qualified O&M measures Subject to Utility Caps 27

Retro Commissioning Program Optimizes operation of customer’s facility without installing capital equipment through technical, engineering and implementation support Requires minimum facility size of 100, 000 sq. ft. Requires fully functioning Direct Digital Control (DDC) Energy Management System (EMS) that can conduct trending & reporting 28

Retro Commissioning Provides incentives for a variety measures including: ◦ Reset chiller discharge temperature ◦ Reset pump and fan speeds ◦ Demand ventilation ◦ Optimization of AHU supply fan static pressure ◦ Broaden humidity set points in data centers ◦ Boiler optimization ◦ Confirm sequence of operations for EMS equipment Covers 40% of implementation costs for investigation fees and improvements 29

PRIME Process Reengineering for Increased Manufacturing Efficiency Program Increase productivity and reduces-per-unit energy usage through Lean Manufacturing Techniques and the Kaizen process Focuses on industrial manufacturing processes Provides benefits ◦ Reduces waste of material, time and transportation ◦ Reduces inventory requirements Using utility approved contractors, the first two events are provided at no cost to the customer. The customer shares 50% of the cost for up to two subsequent events Subject to Utility Caps 30

Small Business Energy Advantage Program Provides cost effective, turnkey energy-saving and retrofit opportunities for small commercial and industrial businesses ◦ CL&P customers < 200 k. W average monthly demand are eligible ◦ UI customers < 150 k. W average monthly demand are eligible ◦ Has pre-approved list of contractors to provide energy assessments and installation of energy-efficient measures 31

Small Business Provides incentives to customers who install: energyefficient lighting, lighting controls, refrigeration controls, compressed air systems, VFDs, programmable T-stats, etc. Incentives cover: ◦ Up to 40% of the installed cost for lighting and nonlighting measures ◦ Solid state or induction lighting may be eligible for up to 50% of the installed cost Offers 0% financing for qualifying customers Maximum loan of $100, 000 On the bill financing available Subject to Utility Caps 32

Financing Opportunities SBEA & Municipal Small C&I CHA DPUC 33

SBEA & Municipal Financing ◦ 0% interest loans to SBEA program participants and Municipalities ◦ On-Bill Financing ◦ Utilities provide the funding source ◦ Maximum loan amount of $100, 000 ◦ Maximum Loan term CL&P – 3 years; UI – 4 years ◦ Customer Size CL&P – up to 200 k. W; UI – up to 150 k. W ◦ New construction/major renovation projects are not eligible ◦ Requires good credit history with utility 34

Small C&I Financing Low Interest Loan Available to CL&P & UI customers: ◦ Average monthly demand greater than 10 k. W and below 350 k. W over the past year ◦ In business at least 3 years ◦ Qualify via 3 rd Party lender’s business credit review process (starts with the loan application process) Loan amount between $2, 000 and $250, 000 providing interest subsidies on the first $100, 000 Maximum Loan term not to exceed 5 years 35

Small C&I Financing Example 11. 25% Market Rate: Base (Market Rate) Project Cost $ 100, 000. 00 CEEF Incentive % 40% CEEF Financing (7%) $ 100, 000. 00 Customer Savings 40% CEEF Incentive $ 40, 000. 00 Loan Amount $ 60, 000. 00 Annual Energy Savings-$ $ 50, 000. 00 Payback Period (Yrs) 1 1 Loan Term (Yrs) 2 2 Monthly Loan Payment $ 2, 803. 44 $ 2, 686. 35 $ 117. 09 Annual Loan Payment $ 33, 641. 27 $ 32, 236. 26 $ 1, 405. 01 Customers Cash Flow $ 16, 358. 73 $ 17, 763. 74 $ 1, 405. 01 Customers Total Payment $ 67, 282. 54 $ 64, 472. 52 $ 2, 810. 02 CEEF Contribution $ 40, 000. 00 $ 42, 476. 34 $ 2, 476. 34 CEEF Contribution - % Increase over Incentive (Capped at 12. 5%) 40. 0% 42. 5% 6. 2% 36

Other Financing Opportunities Connecticut Hospital Association (CHA) ◦ Helps Connecticut hospitals finance major energy-efficiency projects. Contact - Bob Sandler (203) 294 -7312 Department of Public Utility Control (DPUC) offers loans to C&I customers for installing distributed generation equipment & energy efficiency projects that reduce system demand. ◦ 3 rd Party - Bank of America ◦ One percent below Customer’s applicable rate or no more than the prime rate ◦ Minimum Loan Amount $1, 000 Contact - Courtney Guzman (Bof. A) (617) 434 -2888 courtney. guzman@bankofamerica. com (860) 827 -2811 maureen. hoffman@po. state. ct. us Contact - Maureen Hoffman (DPUC) DPUC Web Information: http: //www. ct. gov/dpuc/cwp/view. asp? a=3356&q=419794 37

Financing Contacts ◦ CL&P; Randall Vagnini Phone: 860 -832 -4753 E-mail: vagnirg@nu. com ◦ UI; Roy W. Haller Phone: 203 -499 -2025 E-mail: roy. haller@uinet. com ◦ 3 rd Party - Univest; Craig Hemler Phone: 1 -866 -604 -8160 (ext. 116) E-mail: chemler@univestcapitalinc. com 38

Tax Incentives ◦ Energy-efficient Commercial Buildings Tax Deduction ◦ Renewable-energy Tax Credits And Grants ◦ Qualifying Advanced Energy Project Investment Tax Credit ◦ More Info: www. dsireusa. org www. energytaxincentives. org/business www. irs. gov/irb/2006 -26_IRB/ar 11. html www. treas. gov/recovery Handout 39

Upcoming Training Events Financing/Tax Incentives High Performance Lighting Advanced Lighting Controls Daylight Dimming Boiler System Optimization Check CL&P/UI Web Site Events Calendars For Updates/Registration 40

Important Reminders Contact us early Letter of Agreement(s) must be signed prior to the purchasing energy-efficient measures (except rebates) Agreement Milestone Dates Project Scope Changes Project Close Out Documentation ◦ Examples: Invoices Permits Disposal Fees Lifts 41

CL&P Contacts New Construction (ECB): Lomont White (860) 665 -3790 Retrofit (EO): John Matchett (860) 665 -3054 O&M/RCx: Dave Mc. Intosh (203) 352 -5457 Cool Choice/Motor. Up Rebates: Dave Hayward (860) 665 -3386 Express Lighting Rebates: Dave Hayward (860) 665 -3386 Small Business: Randy Vagnini (860) 832 -4753 Financing: Randy Vagnini (860) 832 -4753 PRIME: Rich Asselin (860) 665 -3292 Residential Programs: Joe Swift (860) 832 -4936 Natural Gas Programs: Rich Asselin (860) 665 -3292 CL&P Account Executives 42

UI Contacts § § § § § § New Construction (ECB): Roy W. Haller (203) 499 -2025 Cool Choice: Michelle Le. Moine (203) 499 -5828 Motor. Up: Michelle Le. Moine (203) 499 -5828 Retrofit (EO): Roy W. Haller (203) 499 -2025 Express Lighting: Roy W. Haller (203) 499 -5828 Small Business: Dennis O’Connor (203) 499 -3715 Financing: Roy W. Haller (203) 499 -2025 O&M Services: Marissa Westbrook (203) 499 -3314 Load Response: Rick Rosa (203) 499 -2632 Residential Programs: Chris Ehlert (203) 499 -2965 Natural Gas Programs: Roy W. Haller (203) 499 -2025 UI Account Managers 43

Web Information CEEF/DPUC CL&P UI Yankee Gas CNG SCG CCEF www. CTEnergy. Info. com www. cl-p. com www. uinet. com www. yankeegas. com www. cngcorp. com www. soconngas. com www. ctcleanenergy. com 44

QUESTIONS? ? ? 45