NEEP Regional Initiatives: Leadership for Success and Innovation

By Ed Schmidt
Director of Regional Initiatives

NEEP identifies as the key vehicle for executing its mission and pursuing its vision “serving as facilitators of regional partnerships to advance energy efficiency policies, programs and practices.”  The Regional Initiatives line of NEEP’s business extends this thought by specifically applying it to efficiency programming: “(NEEP provides) regional coordination of individual ratepayer-funded programs that achieve energy savings by overcoming market barriers to the broad adoption of quality, energy efficient products and services as preferred choices in Northeast markets.” 

When the individual programs of its sponsors succeed, NEEP’s Regional Initiatives succeed. In the current policy and programming environment of rapid change, success often depends on the courage to change and to innovate. NEEP is proud to influence innovation for the purpose of overall success in efficiency programs throughout the region through several means, including:

• Leveraging program, government and industry resources to reduce costs and to increase effectiveness of programs. 
• Linking regional programs with national efforts and policy developments.
• Researching and recommending new technologies, strategies and/or practices for pursuit of increased energy savings.

Leveraging

From their inception, NEEP’s Regional Initiatives have sought to leverage resources. Over its eleven year history, leveraged partnering has been a hallmark of NEEP’s work with regional efficiency programs, starting primarily with efficiency program and federal resources to research and design strategies and programs, and evolving into increasingly broad application of a model that sees cooperative incentive, communication and training among efficiency programs and industry partners. 

NEEP’s first cooperative incentive model was developed in 2002 to bring together retailers, manufacturers and efficiency programs to combine wholesale price concessions and efficiency program incentives to price ENERGY STAR compact fluorescent lamps (CFLs) at attractive levels.  These efforts eventually expanded to lighting fixtures and appliances. Now, looking forward to 2008, NEEP expects to see cooperative efforts such as these in the following product categories: retail lighting and appliances; residential heating and cooling; commercial lighting; and commercial unitary HVAC. In terms of orders of magnitude, the success of these efforts is striking, when the 2007 retail lighting processes are considered:

• Approximately 229 cooperative promotional agreements
• Approximately 4.5 million CFLs sold
• Approximately $20 million in incentives and price concessions

Typically, in the case of retail products, the promotional pricing strategy is accompanied by in-store signage and information, retailer training and cooperative advertising activities. On the cost side of the equation, whereas CFLs once were $20 and higher per bulb, today it is not uncommon to see ENERGY STAR products at well under $1 per bulb. Similarly, incentive fulfillment costs that could be $0.60 per bulb to process an instant rebate coupon are now mere pennies per bulb through cooperative promotions.

It is at least in part for these reasons that product selection and stocking retail outlets are in the thousands throughout the Northeast and the Northeast Energy Star Appliance and Lighting Initiative is recognized as “exemplary” by ACEEE and in 2006 received ENERGY STAR’s “Sustained Excellence” award. It is with great anticipation that NEEP looks to the future as the various Regional Initiatives roll out leveraged activity in virtually all product and technology categories.

Program evaluation is another element of NEEP’s Regional Initiatives work that offers tremendous advantages via leveraging. In many cases, the assessment of markets, program impacts and program operational efficiency is common across much of the region. By facilitating joint execution of evaluation studies jointly, when it makes sense, NEEP enables the very often constrained evaluation budgets of its sponsors to extend their reach and effectiveness.

Linking

It is generally the case that specifications, standards and programs originating at the U.S. Department of Energy (DOE), U.S. Environmental Protection Agency (EPA) and other organizations with national scope, such as the New Buildings Institute’s Advanced Lighting Guidelines, remain at a fairly high level. Market deployment is usually, by design, left to the local market actors since they know the participants and dynamics of their markets best. In many cases, the local markets in the relatively small geographical area served by NEEP are similar enough that there are significant cost and market advantages to building this connection from a national program to local deployment regionally. 

NEEP’s Regional Initiatives accomplish this in any of several ways. Through the late 1990s and into 2006 commercial and industrial programs built awareness and market share for NEMA Premium motors and CEE-tiered unitary air conditioning, generating significant energy and demand savings along the way, via tightly coordinated programs called Motor Up and Cool Choice. These efforts saw common eligibility criteria, incentive levels, fulfillment infrastructure, marketing and field outreach implemented through jointly operated programs. 

Today, the linking of programs through regional coordination spans a spectrum. For example, the ENERGY STAR Products Initiative exemplifies very tight coordination in the form of joint procurement of marketing, fulfillment and field delivery vendors in many parts of the region, and also brings strong information-sharing and pursuit of common objectives via similar strategies among all programs in the region whether they are involved in the joint implementation activities or not.

Coordination can also be illustrated by development and application of common approaches and tools by sponsors individually. An example of this is NEEP’s Commercial Lighting Initiative which is developing plans to connect the U.S. DOE’s building type-specific “design guides” to the local efficiency program and the local market via coordinated training and outreach, as well as similar approaches to integrating use of the design guides into existing efficiency programs to support lighting design that will achieve performance 30% better than the ASHRAE 90.1-2005 standard. At the looser end of the spectrum, NEEP’s Initiative working groups together discuss emerging technologies and practices such as solid state lighting and HVAC service protocols.

Linking becomes a key NEEP function when codes, standards, specifications and other policy developments are considered.  In all NEEP Regional Initiatives communication and application of activity in the policy arena to efficiency programs enables programs to proactively shift focus and target technologies and practices as appropriate. For example, as NEEP’s Policy staff have tracked and communicated the federal efficiency standard for commercial unitary air conditioning, NEEP Initiatives staff have encouraged the working group members and underlying efficiency programs of sponsors to emphasize higher energy efficiency rating units in their incentive structures. Similarly, awareness of the federal standards has impacted the work of NEEP and its sponsors in the Consortium for Energy Efficiency’s process of changing its tiered efficiency specifications. Similar relationships can be with respect to residential appliances and lighting as building codes, appliance standards and ENERGY STAR specifications change. Lastly, the implications of policy activity in the areas of tax credits, capacity markets and carbon emissions are shared by NEEP Policy staff to Initiatives staff so they can be communicated to initiative working groups and can inform NEEP’s strategic development of the affected Initiative(s).

NEEP’s Regional Evaluation Network and related activities provide a forum to link evaluation staff of its sponsors so that planning, expertise and information sharing with respect to results, methodologies and evaluation activities throughout the region and beyond can occur.

Research

One NEEP’s strongest roles with respect to leadership for success and innovation via the Regional Initiatives is in the area of program-related research and strategic support. Across the energy efficiency landscape change is one of the few unifying constants – changing technologies, changing practices, and changing strategies. It is very often the case that the individual efficiency program must maintain its focus so squarely on delivery of current programs that at least some of the emerging opportunities are not able to receive the depth of attention needed to evolve them into next generation programs or strategies. For example, NEEP maintains actively engaged in west coast projects seeking to evolve commercial unitary HVAC programming by developing an advanced rooftop air conditioning unit and protocols for efficiency-oriented maintenance of existing equipment. NEEP is also an active member of the Air Conditioning Contractors of America working group extending its Quality Installation Specification for residential and commercial heating and cooling equipment to Verification Protocols to ensure that what is claimed with respect to installation practices is documented. By coordinating internally with NEEP’s Public Policy business unit, Regional Initiatives staff are able to identify changes to appliance standards, building codes, tax credit programs and specifications that will herald the ramp-down of whole programs or target efficiency levels within them as baselines increase and new, higher efficiency targets emerge.

Lastly, NEEP’s Regional Initiatives provide sponsors who are often unable to attend or participate in ENERGY STAR specification development the opportunity to provide input and to benefit from notes and briefing arising from the processes advancing new specifications or modifying existing ones. The ultimate outcome of NEEP’s emphasis on research and strategy is that the sponsoring efficiency programs and the Initiatives as a whole are able to move more quickly to next generation or altogether new programs than would otherwise be the case.

For more information on NEEP’s Regional Initiatives contact Ed Schmidt, Director of Regional Initiatives via email or at (203) 608-0309.