National Grid is the second largest utility in the US, serving 8 million customers. It is the largest distributor of natural gas in the Northeast US and delivers electricity to 3.3 million customers in New York, Massachusetts, and Rhode Island. National Grid has energy efficiency programs to help customers reduce energy usage and costs through incentives for installing efficient equipment. The programs vary by state but include options for both residential and commercial customers. National Grid's performance on energy savings targets can impact the financial incentives received by the company.

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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

2. 22
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

3. 3
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

4. 4
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

5. 5
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

6. 7
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

7. 8
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

8. 9
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

9. 10
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

12. 13
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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