BONNEVILLE POWER ADMINISTRATION ESD PROGRAM FUEL CHOICE STUDY - FINAL REPORT

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MAY 1994
PREPARED BY PACIFIC ENERGY ASSOCIATES, INC.
PORTLAND, OR

FINAL REPORT

INTRODUCTION

A. Overview
This report provides the findings of Pacific Energy Associates (PEA) for the Energy Smart Design (ESD) Program Fuel Choice Study. The objectives of the study were to assess the likelihood and magnitude of influence that the Energy Smart Design Program incentives had on participant selection of electric end-use equipment as compared to gas equipment for space heating, space cooling, and water heating, and to make recommendations concerning the ESD program. This study is part of a review of all current BPA conservation programs to determine their effect, if any, on the gas and electric utility markets.

The focus of this study is on those buildings completed in the 1991 and 1992 program years, which were in the ESD database and had installed either energy efficient HVAC or water heating equipment. This study reviewed available documentation on the fuel switchable energy conservation measures and conducted interviews with utility ESD staff, project representatives, and project and contractors to determine the impact of fuel choice on the overall ESD program savings.

B. Program Background
As part of its conservation resource acquisition effort, the Bonneville Power Administration developed in 1987 the Energy Smart Design Program (ESD) for commercial buildings. This utility-operated program provides design assistance and financial incentives for cost-effective conservation measures in new and renovated commercial buildings. The participant utilities offer design assistance to commercial building owners and designers using computer simulations of building energy use, hand energy use and savings calculations, walk-through energy audit, or the prescriptive path manual. In general, the larger public utilities have implemented the program themselves, whereas smaller utilities refer projects to their BPA Area or District Offices.

The program began offering financial incentives in 1991, which cover at least a portion of the costs for measure installation, design services, building commissioning, and other services. The ESD financial incentives are provided through either a rebate or a site-based path. For the rebate path, specific rebate amounts have been developed for a list of pre-screened energy conservation measures. In the site-based (or performance) path, the ESD project receives an energy analysis or audit (for example, computer simulations) which identifies cost-effective energy conservation measures and the incentive amount for which it is eligible.

C. Study Methodology
The ESD Fuel Choice Study consisted of the following research activities:

• Project Sample Development. BPA, with the assistance of PEA, developed a sample of ESD projects completed in 1991 and 1992 for the fuel choice study. The sample consisted of projects drawn from building types and utility service areas that were most likely to highlight fuel choice issues and provide the best guidance to BPA with regards to future ESD program services (see the next section for a detailed discussion of the methodology used to sample ESD projects).
• ESD Project Review. PEA reviewed all projects in the BPA-provided sample to identify those projects with measures installed under the ESD program which were potentially fuel switchable, that is, conservation measures affecting water heat, space heat, and/or space cooling end uses. The review was based on utility-provided project auditS/reports and BPA's ESD database. For the targeted utilities and building types, all projects with space heating, space cooling, and water heating measures were reviewed in detail.
• ESD Program Interviews. PEA conducted initial interviews with BPA Area Office staff and utility ESD staff concerning the sampled ESD projects to obtain an initial assessment of ESD program activities and fuel choice issues. Subsequently, PEA conducted interviews with ESD program participants including building owners/managers, project engineers, and architect/designers concerning the sampled ESD projects to determine how decisions regarding fuel choice were made, and the ESD program's influence, if any, on those decision-making processes. Specifically, the interviews probed about the influence of ESD incentives. In addition, gas equipment vendors were interviewed to assess the nature of the gas equipment market.
• Gas Cooling Analysis. In order to address the special case of gas cooling, the study included an analysis of three building prototypes representative of the range of buildings served by ESD. This analysis determined the relative cost-effectiveness of typical gas air conditioning systems versus comparable electrical systems. Electric and gas rate structures current during the study period were used in this analysis. The methodology and findings of this task is discussed in greater detail in Section VI and Appendix B.
• Fuel Choice Impact Assessment. Based on the information obtained from the project reviews and the interviews, PEA determined which ESD projects in its sample were likely and possible "fuel choice impacted" projects. Based on this assessment, PEA analyzed the information in BPA's ESD database and utility energy audits/reports to estimate the proportion of total ESD program energy and capacity savings associated with fuel choice impacted projects.
• Recommendations Concerning ESD Program Design and Policy. PEA conducted a brief review of other utility conservation programs to determine how they dealt with fuel choice issues and the implications for BPA's ESD program. This information was integrated with this study's findings to develop recommendations to BPA concerning fuel choice issues and the ESD program.