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National  Grid’s  Energy  Efficiency  Programs

John Rathbun Technical Sales and Engineering Support National Governors Association Philadelphia, PA March 04, 2013

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UK Electric

UK Gas

National Grid Overview Customers US – 8 Million UK – 11 Million

2nd Largest US Utility Pipes & Wires US – 125,000 miles UK – 215,000 miles

Largest UK Utility

Service Areas:

Gas

Both Electric and Gas

National Grid Gas and LIPA Electric System

Electric

4,000 MW Electricity Generation

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National Grid: Second-largest Utility in the U.S. The largest distributor of Natural Gas in the northeast U.S.

Approximately 3.4 million customers in New York, Massachusetts, and Rhode Island

Delivers electricity to approximately 3.3 million customers Massachusetts, New York and Rhode Island

Manages the electricity network on Long Island under an agreement with

the Long Island Power Authority Serving 1.1 million LIPA customers

2011 – New US Operating Model Jurisdictional areas created state by state to be the local face of

National Grid Stronger connected community and customer relationships at a local

level

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Energy Efficiency Programs National Grid places a strong emphasis on helping our customers manage their energy usage and take advantage of new sustainable energy solutions

National  Grid’s  Energy  Efficiency  Programs  and  Incentives  will:

Identify energy savings opportunities and provide technical services for the installation of premium energy efficient equipment to replace aging, inefficient equipment

Lower project Costs by up to 50% for installing energy saving equipment

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Program Development

Result of regulatory process - individual  state’s  social,  regulatory  and policy decisions for both residential and commercial and industrial customers

Costs are covered through regulatory filings

Commission orders drive final program design, incentive and funding levels

Regulatory approval is required for all programs

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Customer  Incentive  Options…  

CUSTOM Includes measures not covered

under the prescriptive incentives.

Requires a technical analysis of proposed energy measures and associated energy savings to determine incentive amount. Incentives are generally the lesser of: Up to 50% of the installed

cost which includes labor and equipment

A buy-down of equipment costs equal to a six months or a one-year payback

PRESCRIPTIVE Fixed incentives paid for

installation of specific, predetermined energy efficiency measures and equipment.

Eligible equipment must have specified energy efficiency ratings

Examples: Lighting, Lighting Controls, Air Compressors, EMS, Heating and Insulation

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C&I Programs – Prescriptive Programs - Electric

UNY New Const Retrofit Lighting n/a Y Compressed Air n/a Y Variable Speed Drives n/a n/a Energy Mgmt Systems* n/a Y

MA New Const Retrofit Lighting Y Y Compressed Air Y Y Variable Speed Drives Y Y Energy Mgmt Systems* Y Y HVAC Y n/a Chillers Y n/a

DNY

Gas Only Territory

RI New Const Retrofit Lighting Y Y Compressed Air Y n/a Variable Speed Drives Y Y Energy Mgmt Systems* Y Y HVAC Y n/a Chillers Y n/a

* Includes Vending Misers

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C&I Programs – Prescriptive Measures - Gas

UNY New Const Retrofit Heating Equipment Y Y Water Heating Y Y Prescriptive Controls n/a Y Kitchen Equipment Y Y Steam Trap Survey n/a Y

MA New Const Retrofit Heating Equipment Y Y Water Heating Y Y Prescriptive Controls n/a Y Kitchen Equipment Y Y

DNY* New Const Retrofit Heating Equipment Y Y Water Heating Y Y Prescriptive Controls Y Y Kitchen Equipment Y Y Steam Trap Survey Y Y

RI New Const Retrofit Heating Equipment Y Y Water Heating Y Y Prescriptive Controls n/a Y Kitchen Equipment Y Y

Non-Prescriptive Programs: offered in all the above areas • Energy Efficiency Engineering Study • Custom Projects

* Includes Multifamily

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Residential Programs

UNY Gas Electric Products & Recycling Y Y OPower Y Y Multifamily Y Y Enhanced Home Sealing Suspended Y High-Efficiency Heating Y n/a

MA Gas Electric Products & Recycling Y Y OPower Y Y Multifamily Y Y Deep Energy Retrofit Y Y High-Efficiency Heating Y Y Cool SMART n/a Y Weatherization Y n/a Home Energy Assessment Y Y New Const. & Major Ren. Y Y Heat Loan Program n/a Y Work Force Development n/a Y Education Program n/a Y Energy Star Lighting n/a Y

DNY* Gas Products Y Enhanced Home Sealing Suspended High-Efficiency Heating Y

RI Gas Electric Products & Recycling n/a Y Energy Star Lighting n/a Y Multifamily Y Y Cool SMART n/a Y Deep Energy Retrofit n/a Y Energy Star Homes n/a Y High-Efficiency Heating Y n/a Appliance Management Y n/a

* NYC and Long Island

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What is Shareholder Incentive?

Financial  “rewards”  for  National  Grid

Money that is collected from ratepayers (through SBC and Energy Efficiency)

National  Grid  is  “rewarded”  financially…

If we hit savings targets and stay with in budget that has been agreed on with the regulators

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Shareholder Incentive - Purpose

Motivate the successful delivery of energy efficiency programs to achieve savings goals

Align business interests with public policy interests

Partially compensated company for lost sales revenue With revenue decoupling, this is less of a factor

Focus is on components that policy-makers think are needed to achieve state policy Maximize savings Cost-effectiveness Other elements to drive program design to serve

selected target populations, innovate, and/or be more comprehensive

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National Grid Energy Efficiency

Customers Pay

System Benefit Charge (SBC) or

Energy Efficiency Charge

CUSTOMER IMPACT

$$ SPEND Energy saved by

completing project is recorded towards

goal

Energy Savings

Target Savings for Shareholder

Incentive

SHAREHOLDERS

Achieve Incentive

Make Goal

YES

NO Possible penalty

MASS Save

NATIONAL GRID Energy Efficiency

Programs $$

NYSERDA

Spend $$ on EE Programs

Develop Program/ Portfolio/Targets

Customer Gets Incentive

Customer Completes EE

Project

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CHP Developments Electric Efficiency Program in MA & RI MA Alternative Energy Portfolio Rate decoupling Standby Tariff

MA

RI NY

Technical Assistance Marketplace leadership

US Combined Heat and Power Association EPA CHP Partnership Northeast Clean Heat and Power Initiative Northeast Clean Energy Application Center

Micro CHP and fuel cells field demonstrations

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MA & RI CHP Incentive

Electric Energy Efficiency

Thermal output ~ kW

$750/kw

Must pass Benefit cost ratio test

5 Mw CHP 2011 Largest EE project

Technical Assessments

Standby Tariffs

Interconnect Process

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Combined Heat Power - CHP 270 Mw installed on site customer owned generation

NE – 133 Mw 54 sites UNY – 48 Mw 10 sites DNY – 89 Mw 128 sites

Over 72% below 300 kW Significant Projects

NE – 5.9 Mw at food manufacturer 5 Mw at Medical School 5.1 Mw at Pharmaceutical

Upstate NY 29 Mw steam turbine at Healthcare facility 8 Mw ICE engines at Community College 6 Mw Turbine at Casino/resort

Downstate NY 2.4 Mw at Hospital 2.4 Mw at Shopping Mall 2.4 Mw at College

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