Igniting the Flame for Gas Efficiency

by David Lis
Regional Initiatives Program Associate

NEEP has been observing over the past year a rapid growth of interest in the development of and funding for gas efficiency programming throughout the Northeast and well into the mid-Atlantic areas. Sparked by high prices and supply pressures not unlike those driving the ramp-up of electric efficiency programs, gas utilities and program administrators are building out programs across the region.

In response to this trend, and recognizing the strong value regional partnerships and, NEEP has been researching gas efficiency opportunities in the region.  As a result of its research and assessment, NEEP hosted the first of at least two daylong meetings of gas efficiency programs on February 21, 2008 at National Grid in Northborough, MA entitled "Ramping Up Gas Efficiency Efforts in the Northeast." The meeting brought together gas efficiency program staff from the entire Northeast, as far as Atlantic City, New Jersey all the way to Rochester, New York and Burlington, Vermont, to explore policy and programmatic activity and opportunities for regional coordination.

Background and Research

A key driver of the decision to focus on gas efficiency activity was NEEP’s internet and telephone research to investigate which parts of the region currently gas programs, and in what ways programs are targeting savings. A full menu of gas incentives covering heating and hot water equipment now exists for residential customers in Maine, New Hampshire, Massachusetts, Rhode Island, Long Island and New Jersey. Programs of similar scope also exist for customers of Vermont Gas Systems. In Connecticut and the sections of New York and Vermont not otherwise mentioned, smaller scale programs exist and significant ramp-up is underway or pending.

In addition, commercial and industrial customers throughout the region can access prescriptive incentives ranging from comprehensive heating and water heating options to smaller menus covering only high efficiency furnaces and some hot water heating technologies. For example, all commercial and industrial customers have access to custom programs that offer incentives, financing or a combination of both for larger and/or more complex projects that are otherwise not compatible with fixed, prescriptive incentive structures.

While there is not always consistency across the programs on efficiency or rebate levels, most active programs focus on a few common technologies. Focus in the residential sector has been largely on customer rebates for high efficiency furnaces, boilers, hot water heaters, and controls (e.g., programmable thermostats). On the commercial side, targets have included similar technologies, but have gone farther into kitchen equipment, infrared systems, chillers and other custom incentives.  Many of these offerings are new and many others are in development as funding for gas efficiency begins to take off dramatically.

Ramping Up Gas Efficiency Efforts in the Northeast

With gratitude to National Grid for hosting, NEEP held a very successful and first of its kind region-wide meeting of gas program administrators on February 21. The meeting was attended by two thirds of the organizations throughout the region which operate gas efficiency programs and it provided a blend of presentations and discussions in several segments. 

Keynote presentations were provided by Mike Sommer of Berkshire Gas and Gas Networks and Joe Fernandez of Johnson Controls/York. The keynotes offered perspectives on Gas Networks’ successful model of coordination among programs and York’s view of the market and market conditions for high efficiency gas. 

Other presentations and discussion segments looked at policy, codes and standards, and residential and commercial efficiency programs and opportunities. Below are several of the important high level outcomes/conclusions that were achieved; 

• The residential sector is consistently the top program funding priority, however most savings come from the commercial and industrial sectors (e.g., 35 percent of Berkshire Gas’s program budget is C&I but provides 70 percent of the savings). It is also fairly common for large C&I customers, given the choice, to opt out of paying into efficiency funds, forfeiting program benefits and arguably hindering the development of comprehensive programs and program infrastructure.  Development of a new construct, in order for these companies to participate, warrants consideration.
• The need for comprehensive strategies to address policy motion toward acquisition of all cost effective energy savings is clear. A wide range of strategies is needed. Discussion uncovered many ideas for ways to expand the scope of program efforts, ranging from state and government program coordination to the advancement of energy codes and aggressive “stretch codes” such as those under development through NEEP’s Progressive Energy Code effort.  Program planning must be forward-looking and span all fuels in order to incorporate such activities.
• Integration of gas and electric program activities is arguably the most important need and opportunity at the same time. For example, savings opportunities and customer “touches” are missed everyday when home audit contractors focus on a limited slate of measures involving only one energy source. Programs have a tremendous opportunity for increased savings, operational efficiency and customer satisfaction by leveraging each other’s efforts in homes and businesses.
• Upstream opportunities abound with manufacturers and distributors as well as the trades.  NEEP’s ongoing upstream HVAC co-promotions and evolving whole buildings orientation are working to engage industry in this fashion. Regional coordination is essential in order to minimize the fundamental differences of programs across the Northeast and thus enable upstream participation without creating confusion for both customers and the building trades. 
• Need for regional collaboration has proven feasible and valuable through the Gas Networks example, and it appears to makes sense to expand such collaboration and coordination as programs expand in scope and geographical location. In order to develop the most innovative and creative program approaches, and to develop coordination across the broader region, an information sharing forum is seen as an essential piece. This collaboration will offer a clearinghouse of best practices, technologies, and identification of “the next big thing” and the related strategies to address it.

Next Steps

As a next step, NEEP is committed to setting up a follow up meeting this summer to address planning for 2009 programs.

For more information, contact Ed Schmidt, NEEP’s Director of Regional Initiatives.