1. Industrial Energy Efficiency
Program Best Practices
National Governors Association
Policy Academy
Philadelphia, Pennsylvania
March 5th, 2013
Ethan Rogers, Senior Program Manager

2. American Council for an Energy-
Efficient Economy (ACEEE)
• ACEEE is a nonprofit 501(c)(3) that acts as a
catalyst to advance energy efficiency policies,
programs, technologies, investments & behaviors.
• 50 staff in DC, DE, MI, WA & WI
• Focus on end-use efficiency in industry, buildings,
utilities & transportation
• Other research in economic analysis; behavior;
national, state & local policy.
• Funding:
◦ Foundation Grants (52%)
◦ Contract Work & Gov. Grants (20%)
◦ Conferences and Publications (20%)
◦ Contributions and Other (8%)
• www.aceee.org

3. Types of Industrial Energy
Efficiency (IEE) Programs
• Technical Assistance & Training
• Prescriptive rebates
• Custom Program
• Self-Direct
• Industry Specific
• Energy Management
• Market Transformation
ACEEE Report: Follow the Leaders
http://aceee.org/research-report/ie112

4. Breakdown of Industrial Energy Efficiency Programs
and Spending by Type, 2010
Type of Program 2010 Estimated Total
Spending throughout U.S.
Percent of
Total
Utilities and Public Benefit
Fund Organization
$737,000,000 84%
State Agencies and Public
Universities
$ 74,000,000 8%
Nonprofit Organizations and
Other Groups
$ 39,000,000 4%
Federal National and Local
Deployment
$ 29,000,000 3%
Total, non-ARRA $879,000,000
2010 ARRA Spending $228,000,000 additional
Total, including ARRA $1,107,000,000
Sources: ACEEE Report IE121

5. Training & Technical Assistance
The most efficient
system can use
more energy if not
operated properly!
The first and last
steps should always
include training
people

6. Prescriptive and Custom Rebate
Programs
Prescriptive
• $/item
• Good for:
• common
equipment with;
• Simple metrics
• Examples:
• Lighting
• Water heaters
Custom
• $ / kWh or MMBtu
• Suited for upgrades,
expansions, updating, &
refurbishing buildings
• Examples:
• Heat exchangers
• Compressed air system
• New production line

7. Self Direct Industrial Energy
Efficiency Programs
• They offer some “relief” from Public Benefit Charge,
(PBC) by offering an exemption from, rebate against,
escrow of, or credit to the fees paid by the participating
customer;
• They are officially sanctioned and administered by a
utility, public service commission or state energy
department;
• They expect some energy savings in return by
assuming, requesting or requiring that the participating
customer invest some or all of the saved money back
into energy efficiency projects on site.

8. States with structured self-direct
States with less structured self-
direct
States with PBC in place but no
self-direct option
States with opt-out
States with no PBC
States with pending/possible self-
direct
Self-Direct Program Options in the United States
http://aceee.org/research-report/ie112

9. Opt-Out Self-Direct
Type of program
Opt-out Less structured
More structured,
lower oversight
More structured,
higher oversight
Payment of
PBC
None None
Fully/partially on
bill
Fully/partially on
bill
M&V of savings None None/minimal
Minimal, self-
reported
Minimal to
substantial
How funds used
Firm assumed to
use saved PBC
funds for energy
efficiency
Firm assumed to
use saved PBC
funds for energy
efficiency
Rate credit or
project rebate
Personal escrow
account, rate
credit or project
rebate
Follow-up None None to minimal Minimal
Minimal to
substantial
Examples NC, KY MN, MO MT, OR WA, CO
Public Benefit Maximization
Opt-Out/Self-Direct Program Continuum
Sources: Elliott and Chittum 2009, Young 2011, Stipe 2011, Helmers 2011, Landers and Montgomery 2010, Edwards 2011, Schutt 2011, Walker 2011,
Mauney 2011, Landers 2011, Goetze 2011, Romero 2011, Zarnikau 2011, Wankum 2011

10. Reverse Auction
How it works
• Fund amount is set
• Companies bid in
energy saving and
desired amount of
financial assistance
• Scored and
distributed on a
$/kWh (or MMBtu)
Pros & Cons
• Lowest cost energy
savings
• Get mostly low-
hanging fruit
• Miss large projects
with big long-term
savings

11. Industry Specific
Provide a full suite of services
targeting a large portion of a
local industrial base that have
common opportunities
• Require commitment
• Establish Energy Plans
• Best practices training, may
include establishing energy
management systems

12. How can an Energy Management
System (EnMS) drive IEE projects
Energy is a variable cost of production,
• Therefore: it should be measured,
monitored, managed and forecasted
• These activities are best accomplished
through a management system, and;
• A continuous improvement program

13. Market Transformation
• Intended to make lasting changes in the
market with respect to EE technology
• Overcome specific market barriers
• Examples:
• ENERGY STAR in new home construction
• Retro-Commissioning
• Multi-family residence
• Combined Heat & Power (CHP)

14. Measurement & Verification (M&V)
What is Measured
• Program and private
investment
• Energy saved
• Influence of incentives
• Durability of savings
All = Cost Effectiveness
Who Uses Results
• Policy makers
• Regulators
• Program managers
• Evaluators
• Utilities

15. Admonitions for M&V
• Establish a baseline early
• Don’t obsess over net-to-gross. Be as
concerned with Spill-Over as Free Riders
• Be sure to link what is measured to
program goals. Too much or the wrong
information can work against you
• Get enough data to tell the story but not
so much that you annoy customers
• Update M&V with program changes

16. Valuing CHP in an Resource Standard
9 units
(Losses)
Power Plant
fuel
(121 units)
7
(Grid
Losses)
Useful
Electricity
35
units
50
units
Useful
Heat
Boiler
fuel (59
units)
180 units
Grid
BOILER
CHP
15 units
(Losses)
Separate Heat
and Power
Combined Heat and Power
CHP
system fuel
(100 units)
100 units
Useful
Electricity
Useful
Heat
Power
Plant
79
(Gen.
Losses)
Give Value to the
Difference

17. Conclusions
• Energy efficiency is cheaper than new
generation and T&D
• Industrial energy efficiency can be least
cost energy efficiency, however;
• It is difficult to measure and validate
• Program administration requires a
higher level of technical capability
• It doubles as economic development

18. Contact Information:
R. Neal Elliott, Ph.D., P.E.
rnelliott@aceee.org 202-507-4009
Ethan A. Rogers
erogers@acee.org 202-507-4751
Anna Chittum
achittum@aceee.org 206-938-7585
Daniel Trombley
dtrombley@aceee.org 202-507-4008
Chris Russell
crussell@aceee.org 202-507-4749