Summary of Utility DSM Efforts John Masiello Director

Summary of Utility DSM Efforts John Masiello Director, DSM & Alternative Energy Strategy Progress Energy Florida Dennis Brandt—FP&L John Floyd—Gulf Power Howard Bryant—TECO

Overview • • • 2 Programs and Measures Program Expansion DSM Research and Development Innovative Programs Awareness and Education Lessons Learned

Florida DR and Energy Efficiency Background • Florida has engaged in Demand Response and Energy Efficiency Since 1980 • Demand Response and Energy Efficiency are part of each major Florida utilities' annual planning process • Florida utilities consistently look first to Demand Response and Energy Efficiency to meet growing electricity demand • Florida ranks 2 nd among states in Demand Response and Energy Efficiency 1 3 1 Source: 2005 per DOE EIA F 861

Programs and Measures 19 Programs Over 110 opportunities for rebates

Energy Audit: Inform, Motivate, Implement • Educates and motivates our customers to implement measures using our rebates • Almost 3. 4 million customers have received an energy audit— 48% of customers • Helps to eliminate Free. Riders • Educate customers on true energy savings, not the “mystery box” that will save 35% energy! • Work done—Inspect minimum of 10% of improvements for quality control Energy Audit Services Provided: 5 On-site On-Line Phone Assisted Mail Paid

DSM is………DR and EE Demand Response • • • 6 Energy Efficiency • Ceiling Insulation • Duct Repair • Hi-efficiency HVAC upgrades • HVAC tune-up • Compact Fluorescents • Etc. Load Management Standby Generation Pricing Signals Interruptible Service Etc.

Programs and Measures: Residential • Energy Audit To Promote Audit, Customers receive CFL lamp ― ― ― On-Site On-Line Phone Assisted Mail-In Paid Computer Analysis ― ― ― ― Hi-efficiency Heat Pump Geothermal Heat Pump HVAC Commissioning Supply & Return Plenum Duct Seal Proper sizing of Hi-efficiency AC Central AC =>14 SEER non-electric heat ECM Fan Duct Test Duct Sealing Spray-in Wall insulation Ceiling Insulation Reflective Roof Coating Window Film or Screen Replacement Windows ― ― ― ― Duct Seal Conditioned Space Air Handler HVAC Commissioning High Efficiency HP Geothermal Heat Pump Manual D (Duct design) Energy Recovery Ventilation Attic insulation Cool Roof Attic Spray-on Foam insulation Window Film/Screen High Performance windows Energy Star Alternate water heating • Energy Improvement • New Construction/Energy Star 7 • Homebuilders and Buyers Education Seminars • Low Income Weatherization ― ― ― ― ― Attic Insulation Upgrade Compact Florescent Lamps HVAC Maintenance HVAC Filters Duct Test and Repair High Efficiency Alternate Water Heating Reduced Air Infiltration Water Heater Wrap / Replacement High Efficiency Electric Heat Pumps ― ― ― Compact Fluorescent Bulb replacement Water Heater Temperature Check and Adjustment Low Flow Faucet Aerator HVAC Winterization Kit Low Flow Showerhead Change Filter Calendar Refrigerator Coil Brush Wall Plate Thermometer Refrigerator Thermometer HVAC Filters Weatherization Measures (weather stripping / door sweeps / etc. Water Heater Wrap and Insulation for Water Pipes – Neighborhood Energy Saver ― • Renewable – – Solar Thermal WH with DLC Solar PV for Schools with DLC

Programs and Measures: Commercial • Energy Audit ― ― ― • • Chillers Thermal Energy Storage Packaged Heat Pumps Small Heat Pump Geothermal Heat Pump DX Roof top units ECM Fans Roof Top Unit recommissioning Packaged AC Steam Cleaning Duct Sealing Demand Control Ventilation Energy Recovery Ventilation Efficient Indoor Lighting Occupancy Sensors Ceiling Insulation Cool Roof Insulation Green Roof Window Film or Screen Efficient Compressed Air System Efficient Motors Refrigeration (Anti-condensate) Heat recover units for Water Heating Heat pump water heaters New Construction – designed to ensure buildings are built to levels higher than Florida Energy code ― ― ― ― ― Retrofit Existing Facility ― ― ― ― ― ― 8 On-Site On-Line Paid Computer Analysis Green Lodging LEED’s assistance • Chillers Thermal Energy Storage Packaged Heat Pumps Small Heat Pump Geothermal Heat Pump DX Roof top units Demand Control Ventilation Energy Recovery Ventilation Efficient Indoor Lighting Occupancy Sensors Ceiling Insulation Cool Roof Insulation Green Roof Window Film or Screen Efficient Compressed Air System Efficient Motors Innovation Incentive – For customized improvements • • • Thermal Energy Storage Heat Pipes Hi-efficiency Energy Recovery Ventilation

Programs and Measures: Direct Load Control Residential Commercial • Load Management (LM) – – Cooling Heating Water Heating Pool Heating • Peak Pricing – Programmable thermostat • LM with Solar water heating 9 – Cooling – EMS Integration • • Standby Generation Interruptible Service Curtailable Service Real Time Pricing

Programs and Measures: Home Energy End Use any M t— Tips udi gs A in Sav of 60% e has sag bates U e 0 r 7 • Heating & Cooling measures = 40 • Water Heating = 4 • Building Envelope = 26 10

Florida vs. USA: DSM Spending Levels • USA dropped 53% by 2003 • In 1998/2003 Florida was 19% of total Nationwide Source: DOE EIA F 861 1990 -2005 Reports 11 $000

2006 Program Expansion & Results

Winter Demand Reduction 2006/7 Expansion: 85% increase over 2004 filing of 2005 -14 DSM Plan +803 WMW= Winter Megawatts 944 WMW 13 WMW

Summer Demand Reduction 2006/7 Expansion: 93% increase over 2004 filing of 2005 -14 DSM Plan +878 SMW= Summer Megawatts 945 SMW 14

Megawatt Hour Reduction 2006/7 Expansion: 48% increase over 2004 filing of 2005 -14 DSM Plan +527, 211 MWH= Megawatt Hours 1, 187, 105 MWH 15 MWH

Program Saturation • Audits— 3, 380, 000 – 48% of Customers • Load management customers— 1, 160, 000 – 16% of Customers • Building Envelope Rebates — 1, 140, 000 • HVAC rebates— 1, 300, 000 – 18% of Customers 16 Statistics do not reflect total history It’s estimated that 25% additional customers act on our Audit recommendations but don’t submit the paperwork for rebates

2006 Florida DSM Comparisons Percent of Customers Percent of Avg. KW per Total from EE & DLC MW Customer USA • Florida Cost per EE MWH Source: DOE EIA F 861 2006 Report Florida is 124% more cost effective per MWH achieved than USA DSM MWH average – Saving Florida ratepayers an estimated 17 $293 Million in program costs

DSM Research and Development

DSM Research and Development • • • 19 Landfill Gas to Energy Micro Turbine Research – 30 k. W Capstone micro turbine installed. First known micro turbine operating on landfill gas in Florida. Solar PV for Storm Shelter Proposal – Install a photovoltaic (PV) system with battery back-up in a school which also serves as emergency shelter. Other Projects – – – – Dais Analytic Membrane Energy Recovery Ventilation Renewable Energy Program Development Desiccant Technologies for Moisture Removal Ventilation Design for Commercial Fresh Air Intake Chiller and Motor Efficiency Testing Anti-condensate controls for refrigerator/freezer doors Thermal Energy Storage Heat Recovery technology for Ice Makers

DSM Research and Development • • • Geothermal for restaurant – HVAC and hot water for fast food restaurant – Demonstrate the energy and demand benefits Eglin Geothermal – In-field efficiency of residential geothermal system— 75% savings! Sealed Semi-Conditioned Attic – To evaluate the effectiveness of utilizing (1) moisture barrier, (2) closed-loop geothermal heat pump, and (3) spray foam insulation in combination Warner Solar PV monitoring – Small business solar PV contribution Water furnace international study of high-efficiency refrigerant – Evaluate the effectiveness of 410 A refrigerant in geothermal equipment as a replacement to R-22 which is being phased-out. 20

DSM Research and Development • • Plug-in Hybrid Electric Vehicle (PHEV) with V 2 L and V 2 G – Develop communication infrastructure – Evaluate Vehicle to Load (V 2 L) and Vehicle to Grid (V 2 G) applications – Compare vehicle availability / usage to system load shape – Design prototype customer interface kiosk Small Scale Wind – Evaluate average wind speeds for residential / commercial / utility applications – Analyze energy production and coincidence with system peak • 21 Other Projects: – – – – – Solar PV with Vanadium Redox Battery (VRB) Solar Hybrid Lighting Chemical PTAC coil cleaning Smart Grid / Next Gen LM 3 M Filtrete Filters Po. WER distributed energy system EMS Orange County Schools EMS Room Control at Hyatt Regency Fume Hood Chiller Loop modeling

DSM Research and Development • • • 22 Smart. Cool HVAC/Refrigeration – System Optimization of cycling patterns on HVAC compressors and supermarket refrigeration. Refrigeration Flow Control – Upgraded refrigerant flow control valves for commercial settings Residential Thermostat Load Control Pilot – Expanded on-call program using new generation of communication and control technologies Business Water Heating – Alternative electric water heating measure such as heat pumps and heat recovery units Residential Solar Water Heating and PV Smart Network – Potential to provide customer with real-time energy use and conservation opportunities

Innovative Programs

Innovative Programs Critical Peak Pricing Program • • • 24 Interactive energy management system allows customers HVAC and WH to automatically respond to price signals. Customers choose the balance between comfort and savings that best fits their lifestyle, putting them in control of their energy purchases. Current program participation: 8, 767 customers • DSM Plan projects: 30, 000 participants through 2014. Geothermal Heating & Cooling • Geo-exchange, another term, are the most efficient system for heating and cooling. • Since 2005: • • - 2, 325 residential installs - 4, 481 commercial tons DSM Plan projects: - 2, 500 residential installs - 10, 370 commercial tons through 2014. Incentive = $400 per ton

Innovative Programs Commercial Demand Response Residential Price Responsive Load Management • Multi-tiered rate structure: price signals conveyed during the day • “Smart” thermostat: Programmed by customer for preset actions based on pricing • Anticipated Demand Reduction – 29 MW-Winter – 23 MW-Summer – 10, 699 MWH of annual energy through 2014. 25 • Contracted turn-key program • • with 25 MW of load reduction Vendor will market program – audit customer facilities – install automated controls – provide load tracking – pay customers for k. W reduction. Reduction achieved through: – emergency backup generation – energy management – raising cooling set-points – turning off or dimming lights.

Innovative Programs Neighborhood Energy Saver • Designed for low-income families • Measures installed at no charge • • by canvassing neighborhood Coordinated with city, community & state agencies Implementation includes: – Home Energy Audit – Customer behavior change education – Installation of a comprehensive package of low cost conservation measures 26 Renewable Energy Saver Programs Solar Water Heater with Energy. Wise: • $450 upfront rebate encourages residential customers to invest in a solar thermal water heating Solar. Wise for Schools: • Promotes environmental stewardship & renewable energy education • Customers can elect to donate their monthly Energy. Wise credits toward a special fund • This fund is used to purchase solar (photovoltaic) systems for Florida schools & provide educational opportunities

Innovative Programs Residential Thermostat Load Control Pilot • FPL is evaluating expansion of load management –through use of a new communication and control technologies –allow residential customers to lower energy costs, or override FPL control of heating and cooling appliances. • Demand energy savings per participant –Energy anticipated to be about 260 k. Wh per year –Coincident peak reduction value of 1. 0 k. W • The pilot will have a maximum of 400 participants. 27 Business Custom Incentive Program • Target market is primarily • • • larger commercial, industrial and government customers Designed to address unique energy saving opportunities Measurement and verification of custom energy projects Has achieved approximately 20 MW of demand savings

Awareness and Education

Awareness and Education • Bill Inserts – Provide timely messages with respect to seasonal energy-saving tips and energy efficiency advice through customer bill inserts. • Home and Business Expo events –Promoting energy efficiency in homes and businesses • Presentations to civic clubs, chambers of commerce, homeowners associations, trade organizations, and all levels of lower and higher education institutions • Workshops for low income homeowners and first time homeowners with Habitat for Humanity • Workshops on “Buy Green” and “Build Green” 29

Education • Student Curriculum – Students will perform mail-in, on-line, or telephone audit which will provide information on low cost energy saving practices that the student’s parents can implement for extra credit – Presentations by an ensemble will use a professionally written play employing humor and interactive theater – Classroom guides to teach the benefits of energy efficiency • Sun. Smart School PV Curriculum – 28 Schools have PV installed – Energy data on Web at www. energywhiz. com • Teachers trained on Solar curriculum 30

Awareness—Save the Watts It’s your wallet. It’s your world. Save the Watts. • Customers receive 30, 000 messages a day • Campaign – To reach 95% targeted population 35 times in 4 months – TV, Radio, Newspaper, Magazines, Online advertising • Results – Web site visits up 450% – 76% net increase in online audits – Energy. Wise installs up 193% 31

Consumer Education It’s your wallet. It’s your world. Save the Watts. 32

Awareness and Education 33

Awareness and Education 34

Lessons Learned What Didn’t Work Building Code Impacts What Works Well

What Didn’t Work • Increased Incentives no Guarantee of Increased Participation • Goal Setting must be from market potential and not from Top Down approach • Keep it Simple – Rebate process and rules have to be extremely easy to understand follow to get maximum participation • Advertising: One size doesn’t fit all – Commercial customers require relationships to be established with customer and equipment vendors • Gateway Communication 1998 – Technology not ready and costly – Concept ahead of technology • Residential Paid Audits – Additional time and information not accepted • Load Control programs can grow too large a percent of reserves 36

Building Code Impacts • 1990 Code change from SEER 10 demonstrates slow transition to hi-efficiency Heat Pumps: 7 years • Record number of implementations in 2006 with less than 50% of that number expected in 2007 50% drop 37

What Works Well • Duct Seal & Repair – Over 660, 000 ducts repaired/sealed – Success due to education of consumer & contractors to address an invisible issue • Duct curriculum and training developed and delivered annually to AC contractors • Direct Load Control has 1. 2 M customers – Saved 16% of Total USA Peak Demand Reduction 1 – Florida placed 2 utilities in Top Ten of Nation 1 in MW of EE & DR • Developed multiple delivery channels – – – Field representatives and account managers Participating Independent Contractors Trade Association partnerships Community organizations partnerships Government Agencies partnerships Internet access to programs and rebate information • Florida on track 5, 332 Summer MW of Reduction and 5, 655 Winter MW in 2007 – This is equivalent to 14― 400 MW power plants 38 1 Source: 2005 per DOE EIA