EFFICIENCY MAINE A Program of the Maine Public Utilities Commission FREQUENTLY ASKED QUESTIONS What is Efficiency Maine? Efficiency Maine is a statewide effort to promote the more efficient use of electricity, help Maine residents and businesses reduce energy costs, and improve Maine’s environment. It is administered by the Maine Public Utilities Commission. What are the program’s objectives? The program’s five primary objectives are set forth in statue (section 3211-A (2)(A)) as follows: 1. Increase consumer awareness of cost-effective options for conserving energy; 2. Create more favorable market conditions for the increased use of efficient products and services; 3. Promote sustainable economic development and reduced environmental damage; 4. Reduce the price of electricity over time for all consumers by achieving reductions in demand for electricity during peak use periods; and 5. Reduce total energy costs for electricity customers in the state by increasing the efficiency with which electricity is consumed. Do Efficiency Maine programs target businesses or individual consumers? Efficiency Maine programs are available to individuals. They are also available for businesses as large as Idexx Laboratories in Westbrook or as small as Leighton’s Grocery in Auburn. They are available for municipalities, water and sewer systems, schools and other non-profit organizations. What does Efficiency Maine do for Mainers? Efficiency Maine helps businesses and residents save energy, save money, and reduce pollution created by the generation of electricity. Since its inception in 2002, Efficiency Maine has provided incentives, technical assistance, and other services which will avert the consumption of some 3 million megawatt hours of electricity - enough to power 46,000 Maine homes for a decade. That will save Maine business and residential consumers more than $300 million. And it will avert the emission of health-threatening pollutants associated with electricity generation, as well as pollution that contributes to climate change. The emission of as much carbon dioxide as would be produced by 39,000 cars over ten years will be avoided due to program efforts. (The above findings conservatively measure energy, financial and pollution savings based on comprehensive date gathered beginning in fiscal 2004 and ending in fiscal 2008. They do not reflect savings achieved between 2002 and 2004. The numbers are expected to grow in the next year.) In addition, Efficiency Maine provides training in efficiency products, services and techniques for professionals (like industrial facilities managers, architectural engineers, or residential solar equipment installers). Efficiency Maine provides free energy audits and low-cost loans for small businesses. Efficiency Maine provides expert speakers for businesses, trade shows, community and other groups seeking tips on energy efficiency, and maintains a web site (www.efficiencymaine.com) with comprehensive information about efficiency incentives, products and services. Efficiency Maine also collaborates with other private and public entities to promote efficiency strategies and works with Maine schools to develop energy-awareness curricula. Through the years, benefit-to-cost ratios for the program have steadily improved - reaching a level of 3.84-to-1 in 2008. It now costs about 3.1 cents to save a kilowatt hour of electricity in Maine, compared to about 12 cents to buy a kilowatt hour. How Does Efficiency Maine save money for Mainers? Efficiency Maine saves money for Mainers in several ways. It provides cash incentives and rebates for businesses and residents to purchase energy efficient appliances, equipment and light bulbs. Examples include high-efficiency HVAC and compressor systems, high-efficiency industrial lighting arrays, Energy Star rated appliances or compact fluorescent lamps (CFLs). For businesses and institutions, incentives may be considered “prescriptive” - that is, the incentive will automatically be awarded for a qualifying fixture. Or incentives may be “custom” - that is, awarded after comprehensive analysis shows that a non-prescriptive installation will deliver quantifiable and cost-effective electricity savings. Cash incentives for businesses can range from as little as $10 for LED exit signs, to $100,000 for a custom compressed air system for an industrial customer. The benefit of efficiency fixtures or installations grows when residents or businesses consider the energy that is saved when that equipment is used -- and the kilowatt hours saved that don’t show up in electric bills. And because investing in efficiency is 72% less expensive than purchasing new energy supply, Efficiency Maine limits the amount of overall electricity demand in Maine, which in turn helps to keep rates lower for all Maine businesses and residents. Can you prove it? Energy savings measurement and verification guidelines are a vital part of Efficiency Maine’s energy efficiency programs. In order to stay informed of the most up-to-date measurement procedures, Efficiency Maine participates in efforts such as the Northeast Energy Efficiency Partnership’s Evaluation, Measurement and Verification forum to develop standardized methods to measure energy savings across the region. In addition, Efficiency Maine’s programs are subject to independent, outside review every five years. The last such review of the Business Programs, for example, took place in December, 2006. All program evaluations can be found on the efficiencymaine.com web site. Evaluation criteria include costs per kilowatt hour of electricity saved, lifetime economic benefits to the state, and benefit-to-cost ratios. Does Efficiency Maine apply a cost-effectiveness test before deciding to spend money on a program? Yes. By law, Efficiency Maine’s programs are subject to one of two cost-effectiveness tests, either the “modified societal test” or the “non-quantifiable cost-effectiveness” test. The modified societal test is satisfied when program benefits exceed program costs. Benefits include avoided electric generation costs, avoided transmission and distribution costs, avoided fossil fuel costs, resource benefits such as reduced water and sewer costs and non-resource benefits such as reduced operation and maintenance costs. Costs for the modified societal test include direct program costs, measure costs (for example in new construction or replacement programs measure costs are the incremental costs of the energy efficiency measure, including installation, over an equivalent baseline measure) and ongoing customer costs such as increased operation and maintenance costs. Since 2004, Efficiency Maine’s benefit-to-cost ratio under the modified societal test has steadily improved. By the end of fiscal 2008, the ratio stood at 3.84-to-1. That is, for every qualified dollar spent in 2008, the program saved Maine consumers $3.84. Since 2004, the total program benefit-to-cost ratio for all years put together was 3.06-to-1. Some efforts are more difficult to quantify. For example, Efficiency Maine sponsors a regular schedule of technical training for facility managers covering topics such as advanced lighting and motors, HVAC efficiency, automation and controls, refrigeration, and compressed air, to mention some. One such program (Building Operator Certification) is nationally certified. The actual energy savings from these programs and energy curriculum in schools, to use another example, are difficult to quantify accurately. Are Efficiency Maine services delivered by government or by private contractors? Efficiency Maine’s programs are managed by five state employees. Business-oriented offerings are delivered by private contractors who are chosen through a competitive bidding process. Over 450 small and large mechanical and electrical contracting businesses are Efficiency Maine “trade allies” who work through the program to provide efficient products and services to commercial customers. On the residential side, Efficiency Maine partners with more than 300 retail stores - like Aubuchon or Wal-Mart - to increase the availability of and provide incentives for Energy star rated appliances or high-efficiency Compact Fluorescent Lights (CFLs). Many of those stores also provide CFL recycling centers administered by Efficiency Maine. Other services, like programs for low-income Mainers, for example, are delivered by the Maine State Housing Authority or local Community Action Programs. By working with a number of people and organizations throughout the state, Efficiency Maine is able to deliver its programs effectively and affordably. How do Efficiency Maine’s administrative and overhead costs compare with similar programs? Efficiency Maine’s overhead costs have steadily decreased over time as Efficiency Maine’s programs have developed. A study recently conducted for the Connecticut Energy Advisory Board by GDS Associates found that of the 15 efficiency programs analyzed in the Northeast, Efficiency Maine had the lowest program administrator cost per lifetime kWh saved. Do Efficiency Maine programs target any geographic area or income level? Efficiency Maine strives to ensure that all of its opportunities are provided proportionately to the population statewide. Its programs, services and allies can be found in every county in the state. To ensure that savings are realized by small businesses and low-income populations, by law Efficiency Maine must allocate 20% of its budget to help small businesses use electricity more efficiently. Similarly, 20% of the program funds are dedicated to helping low-income Mainers realize electricity savings. Do taxpayers pay for Efficiency Maine programs? The bulk of Efficiency Maine’s funding comes from what’s called the “systems benefit charge” which is included in electric bills and calculated on a per-kilowatt hour consumed basis. The systems benefit charge for a typical Maine home amounts to about $8 a year. The revenues flow to the Conservation Program Fund Does the Efficiency Maine budget increase every year? Because the amount of electricity used by Maine’s consumers varies each year, Efficiency Maine’s funding varies. If overall electricity consumption goes up, so do the program revenues generated by the systems benefit charge. And if electricity use goes down, the revenues go down also. Other factors such as federal grants may also affect the overall budget figure. How much money does EM spend every year? Over the last couple of years, Efficiency Maine’s budget has been around $15 million. The programs must balance costs and benefits, as well as general societal benefits and geographical distribution of services. Programs are designed and the budgets derived through a comprehensive stakeholder discussion and cost-benefit review. The result is a distribution of money across business, residential programs, low-income programs, and training and educational efforts. Is Efficiency Maine able to adjust to changing conditions in the market? Efficiency Maine’s program goals, objectives and strategies are reviewed every three years which allows for flexibility in the design of programs so that they may adapt to changing market conditions as well as consumer education and participation levels. In addition, the program’s managers and the Commissioners are constantly evaluating program offerings for their effectiveness, making adjustments where needed and looking for opportunities for innovative efficiency activities. How does Efficiency Maine get the word out about programs and services? The Commissioners and Efficiency Maine’s staff generate publicity opportunities in various venues around the state aimed at raising awareness of energy conservation issues and program offerings. Efficiency Maine also works with a marketing agency on television and radio spots, print advertisements, trade materials, website design, and online email and newsletter campaigns to promote efficiency products and services to Maine residents and businesses. Does Efficiency Maine coordinate and collaborate with other entities, including other state agencies? Yes, Efficiency Maine works with many entities, including the Governor’s Office of Energy Independence and Security, the Maine State Housing Authority, the federal Department of Energy, the Maine Department of Environmental Protection, the Maine Energy Conservation Board, the Energy and Carbon Savings Trust, Maine Partners for Cool Communities and many more.