Alliance’s Energy Star^® Residential Lighting Program

(Promotion of Fluorescent Torchieres)

1. Program description: This Alliance program uses a market transformation strategy that aims to create a viable market for energy efficient fluorescent lighting in residences by accelerating product availability and customer acceptance and use throughout the Northwest. The project includes support for retail-based consumer awareness/education, initiatives to promote new product innovation, local utility marketing, and product quality verification. The goal is to promote residential lighting based on Energy Star^® technical lighting specifications, including compact fluorescent lamps (CFLs), indoor and outdoor fixtures and portable floor lamps (torchieres) to encourage product variety and availability, and communicate the benefits of the products to retail residential consumers.

One of the most successful components of this program has been the promotion of fluorescent torchieres and their replacement halogen models. The Torchiere Turn-in is a two-part event consisting of the Turn-in event itself and a promotional safety event called the Torchiere Safety Demonstration. Utilities, with other local community partners, host the turn-in where residents can trade in their halogen torchieres and purchase a safe, Energy Star^® torchiere that uses compact fluorescent technology. The media event precedes the Turn-in and builds anticipation for the turn-in itself. The program provides a “how to kit” for the utilities and provides support working with retailers and the media.

2. Explanation of policy rationale for the program including discussion of whether the measure is consistent with a deregulated environment: The policy rationale for this program is two-fold. As most Alliance projects, the electric savings achieved by this program are acquired at a cost per kWh that is less than the avoided cost of building or purchasing the resource. In addition, the program leverages off of the significant non-energy benefit of increased consumer safety with the CFL torchiere models. This programs works well in both a deregulated and regulated market as it works within market channels. Both retailers and utilities are enthusiastic about the program because while it delivers energy savings, it also allows them to provide a valuable service to their customers.

3. Examples of implementation: The program developed a Turn-in kit that contains the essential tools for a utility to implement a torchiere turn-in event in their service territory. The kit contains stories of other successful turn-in events, suggestions for partnerships with retailers, community groups and adjacent utilities, and advertising and public relations tools. In addition to the tools provided in the kit, the program also provided support in working with local retailers and incentives to help utilities provide consumer coupons towards the purchase of a fluorescent torchiere. The amount of the coupons varied from event to event and depended upon what the utility felt their customers needed as an incentive.

Local utilities or the Alliance alone may not have been able to achieve this kind of energy savings. The utilities might have found it difficult to secure sufficient qualifying products at an affordable price. On the other hand, the Alliance did not have sufficient resources or the consumer connections necessary to successfully hold turn-in events across the region. By cooperating, the utilities were able to secure short-term energy savings and the Alliance strengthened the long-term commitment of market players, such as the torchiere manufacturers and retailers, to continue to make and offer these products.

4. Political feasibility of the practice or program: The program is politically feasible on several levels. The program results in energy savings that are least cost compared to acquiring these resources. The program has non-energy benefits including CO₂ savings and increased safety. The CO₂ savings helps national efforts to reduce CO₂ emissions. The program is estimated to save 137,213 tons of CO₂ through 2010. Thus, the benefits of a program such as this accrue to several different groups working towards different goals.

The challenges of implementing a program such as this and the barriers that need to be addressed require a great deal of cooperation and coordination between local, regional and national efforts. The marketing of Energy Star requires coordination with federal EPA efforts, manufacturers, buyer groups, large retail chains, local retailers, large and small utilities, consumers and government standards efforts. The success of this program is based upon receiving the cooperation and upon leveraging all of these relationships.

Over the long term, electricity savings from projects such as this program are expected to be larger and longer lasting than traditional local acquisition efforts because, if successful, the market will continue to offer targeted products and services even after the Alliance’s project implementation has ended. This should also result in reduced utility-sponsored costs for the electricity savings over the long run.

2. Summary of Costs and Benefits for each Practice or Policy: The Alliance goes through a rigorous cost effectiveness test for each of its programs. In the case of lighting, the inputs include program costs (admin, evaluation $, incentives to consumers,) consumer cost and local utility costs. The benefits include electric savings. The table below details the cost effectiveness for this program from three perspectives: total resource, Alliance and consumer. These numbers include torchieres, screw based CFLs and hardwire fixtures. We have not separated cost effectiveness tests for each measure.

Total Resource Perspective	Annual Unit Savings (kWh)	Levelized Cost (Cents/kWh)	CE Index* (Benefit/Cost Ratio)
Venture + Post-Venture Period	77.5	1.77	1.2
Venture Period Only	77.5	2.85	.9
Alliance Perspective	Annual Unit Savings (kWh)	Levelized Cost (Cents/kWh)	CE Index* (Benefit/Cost Ratio)
Venture + Post-Venture Period	77.5	.34	6.1
Venture Period Only	77.5	.91	2.5
* If CE Index for Total Resource Perspective and Venture + Post-venture Period is greater than 1.0, then project is deemed cost effective.
Consumer Perspective	Simple Payback in Years
Scenario	@ 5.0 cents/kWh	@ 3.0 cents/kWh
Simple Payback (Yrs) Electricity Savings Only	4.847	8.079
Simple Payback (Yrs) Electricity plus Non-electric Benefits	4.847	8.079

3. Interaction with other potential policy options and discussion of any regional coordination to enhance the effectiveness of the practice or program:

Over three years ago, the Pacific Northwest embraced the idea of consolidating resources and working regionally to bring affordable, energy-efficient products and services to Northwest markets. The result was the inception of the Northwest Energy Efficiency Alliance and the development of programs like the Energy Star^â Residential Lighting Program. The program works across utility and state boundaries, allowing the region to speak with one voice sending a stronger message to the manufacturers and distributors than if each utility worked on its own. The region-wide message is that Northwest consumers want the efficient versions of products available in stores where they normally shop at a price they can afford.

This approach works within the normal market dynamic so the supply and demand for energy-efficient products will continue after Alliance activities end. The Alliance’s approach to achieving electricity savings is called “market transformation”.

Market transformation is complementary to more traditional approaches of conservation acquisition – such as local utility programs. Local approaches typically focus on individual customers. Market transformation efforts work up the market chain with manufacturers or wholesalers and distributors. When local efforts and market transformation work together, more players in the market chain understand the importance of efficiency and the region is likely to achieve greater energy savings. Thus, regional coordination is fundamental to the success of the program such as this.

Over the long term, electricity savings from market transformation projects are expected to be larger and longer lasting than traditional local acquisition efforts because, if successful, the market will continue to offer targeted products and services even after the Alliance’s project implementation has ended. This should also result in reduced utility-sponsored costs for the electricity savings over the long run.

4. Required actions to implement the practice or program:

For each project the Alliance conducts market research, determines a baseline, issues an RFP and hires implementation contractors, evaluates progress towards programs goals, and readjusts the program based on changing market conditions. Much of this work undergoes the scrutiny of an active board that is composed of electric utilities, state government representatives, public interest groups and energy-efficiency industry representatives.

As mentioned in #4, the challenges of implementing a program such as this require a great deal of cooperation and coordination between different groups. It requires working with manufacturers, buyer groups, large retail chains, local retailers, large and small utilities, consumers and government standards efforts. This program is particularly focused on cooperating and partnering with retailers throughout the region. Retailers have the potential to truly “transform” the market so that the benefits of the program continue after the Alliance’s role ends.