1. 1 Energy Efficiency Program Status Jay Zarnikau Frontier Associates On Behalf of the Electric Utility Marketing Managers of Texas (EUMMOT) Organization July 2004

2. 2 Outline  2003 Program Activity  Residential and Small Commercial Sector Activities  Measures Being Installed  Demand Savings  Incentive Costs per kW  Large Commercial and Industrial Sector Activities  Measures Being Installed  Demand Savings  Incentive Costs per kW  Activities in Non-Attainment Areas  Actions Taken to Enhance Program Effectiveness  Outlook for 2005 and Beyond

3. 3 2003 Achievements  Energy efficiency programs offered by the investor-owned electric utilities in Texas in 2003 resulted in about 150 MW of demand reduction and over 370 GWh of annual energy conservation.  This exceeds the demand reduction goal for energy efficiency programs established by the State Legislature by about 11%.  The Demand Goal was 135 MW, achievements were 150.7 MW.  Administrative costs were held to a comparatively low share of total program costs – in the 8% range.

4. 4 2003 Program Activity

5. 5 Residential Sector Achievements  Budgets are quickly committed.  Small project set-asides are working well in stimulating program participation by smaller local providers of energy efficiency services.  Hard-to-Reach goals are achieved (HTR savings exceed 5% of the total demand reduction).  A wide variety of measures are being completed, although a few (like duct efficiency and air infiltration improvements) dominate.  Programs are cost-effective.  The Energy Star New Home program has been particularly successful. CenterPoint and TXU Electric Delivery. continue to win EPA awards for their efforts in this area.

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9. 9 Commercial Sector Achievements  Some programs were under-subscribed in 2003, so the utilities initiated a number of steps to increase program activity. These initiatives appear to be working.  A wide variety of measures are being completed.  Programs are cost-effective. Demand reduction is being achieved at a much lower cost than in the residential/small commercial sector.

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13. 13 Activities in Non-Attainment Areas

14. 14 Actions Taken to Enhance Program Effectiveness  Program activity in the C&I Sector was lower than anticipated in 2002, so a number of new program templates were undertaken in 2003 to increase C&I participation.  These new program efforts are paying off. Many of the utility C&I Standard Offer Programs are already fully subscribed this year. The new market transformation programs are off to a good start.  Small project set-asides are succeeding in promoting interest and participation in the programs among smaller local contractors.

15. 15 Outlook for 2005 and Beyond  Update deemed savings values, as appliance and equipment standards change.  Continue outreach activities.  We expect continued growth in program activity in the C&I sector.  We are optimistic that, absent major changes in the program structure or goal, that the programs will continue to promote sufficient energy efficiency activity to meet their peak demand goals.