1 Issues With Offering Just Electric Energy Efficiency Programs – No Gas Presented by Ruth Kiselewich Director, Conservation Programs January 10, 2008

2 Customer Impacts u Customer confusion –Difficulty in explaining to customers that some appliances and HVAC is part of the energy efficient programs but those using gas are not –Customers looking to upgrade their heating system will not understand that there are rebates on heat pumps but not on gas furnaces –Message becomes confusing, resulting in less participation –Need for fine print in ads to list appliances excluded from rebates such as gas hot water heaters while electric ones are included u Low income customers unfairly affected –Heating in Baltimore City is predominantly with gas (65% and only 15% use electricity) –Current BGE CHIP program is very limited such as nothing for gas water heating and limited number of participants

3 Program and Costs Negatively Affected u Some programs cannot be effectively implemented if both gas and electric are not included –Residential Retrofit – Home Performance and New Construction are whole house programs –Nationally recognized tests for measuring efficiency levels include both gas and electric –If a home is gas heated, how do you ignore the impact of upgrading the inefficient furnace when heating is a home’s largest energy use or how are the benefits of insulation calculated if gas ignored u No decrease in costs other than incentives with elimination of gas –Marketing costs for the overall programs are the same. There is no gas or electric specific marketing –Thus, elimination of gas reduces program cost effectiveness

4 Case To Include Gas Is Strong u Gas is an integral part of any energy efficiency program u It is difficult to separate costs and calculate reduced market participation due to the addition of the market barrier of excluding gas u The estimated charge to customers is minimal compared to estimated benefits – Gas efficiency charge at peak in 2014 is estimated at $1.43/month versus total gas bill of $80/month for a gas heating customer using the average of 800 therms/year