1. Impact of Energy Efficiency Services on Energy Assistance NEUAC Conference June 18, 2014

2. Presentation Overview Introduction NJ Comfort Partners Program NJ Universal Services Program Interaction of Affordability and Efficiency Programs NJ CP Affordability Impacts Universal Service Impacts Summary 2

3. NJ COMFORT PARTNERS PROGRAM 3

4. NJ Comfort Partners Utility Partners 4 Electric Utilities Atlantic City Electric Jersey Central Power & Light PSE&G Gas Utilities Elizabethtown Gas New Jersey Natural Gas PSE&G South Jersey Gas

5. NJ Comfort Partners 5 Most jobs are joint electric and gas delivery. Audits Completed Job Type Treatment Group 9/1/2010 – 8/31/2011 Comparison 9/1/2011 – 8/31/2012 #%#% Gas and Electric5,61587%8,34485% Electric Only5969%8429% Gas Only1422%1351% No Invoice Data841%4595% Total6,437100%9,780100%

6. NJ Comfort Partners Service Delivery Partners 6 Five service delivery contractors. Contractor Treatment Group 9/1/2010 – 8/31/2011 Comparison 9/1/2011 – 8/31/2012 #%#% 14,08263%5,05952% 298515%1,32614% 381213%2,40425% 45278%8589% 531<1%1331% Total6,437100%9,780100%

7. NJ Comfort Partners Participant Partners 7 Low-income households GroupObs. Annual Household Income Mean Percentile 1025507590 Treatment Group 6,359$19,046$8,460$11,712$16,664$24,000$33,370 Comparison Group 9,374$18,884$8,400$12,000$16,800$24,000$32,952

8. NJ Comfort Partners Participant Partners 8 Low-income households Poverty Level Treatment Group 9/1/2010 – 8/31/2011 Comparison Group 9/1/2011 – 8/31/2012 #%#% ≤100%3,48354%4,69548% 101% - 150%3045%5826% 151% - 200%86713%2,73028% >200%972%1231% Missing1,68626%1,65017% Total6,437100%9,780100%

9. NJ Comfort Partners Participant Partners 9 Owners and renters Occupancy Type Treatment Group 9/1/2010 – 8/31/2011 Comparison Group 9/1/2011 – 8/31/2012 #%#% Own4,34367%6,73769% Rent2,01431%2,64727% Other4<1%3 Missing761%3934% Total6,437100%9,780100%

10. NJ Comfort Partners Participant Partners 10 Single and multi-family Structure Type Treatment Group 9/1/2010 – 8/31/2011 Comparison Group 9/1/2011 – 8/31/2012 #%#% Single Family4,50670%7,30875% Multi Family (up to 14 units) 1,78728%1,98120% Other681%981% Missing761%3934% Total6,437100%9,780100%

11. NJ Comfort Partners Program Benefits 11 Measures installed Protocol Savings Category Treatment Group 9/1/2010 – 8/31/2011 Comparison Group 9/1/2011 – 8/31/2012 #%#% CFL5,10079%6,76069% Air Sealing4,20165%5,20253% Hot Water3,92661%5,21453% HVAC2,99146%4,26044% Refrigerator2,79743%3,62237% Thermostat2,43638%3,14032% Duct Sealing2,06132%3,08031% Insulation2,02932%2,61127%

12. NJ Comfort Partners Program Benefits 12 Measure expenditures Total Job Costs Job Type Treatment Group 9/1/2010 – 8/31/2011 Comparison Group 9/1/2011 – 8/31/2012 #Mean# Gas Heat & Gas DHW5,495$3,7578,121$3,277 Electric Heat & Electric DHW526$2,922817$3,018 Gas Heat & Electric DHW218$3,644295$3,006 Electric Heat & Other DHW26$2,35725$2,674 Other88$1,25263$1,656 Subtotal with Invoice6,353$3,6439,321$3,233

13. NJ UNIVERSAL SERVICES PROGRAM 13

14. NJ USF Program Goal: improve affordability of natural gas and electric bills for low-income households Eligibility –175% of Federal Poverty Level –High energy burden >3% burden for natural gas, or >3% burden for electric, or >6% burden for electric heating Application –Joint for LIHEAP, USF, and WAP –Year round application 14

15. NJ USF Benefits Target 6% Energy Burden Maximum benefit of $1,800 Monthly credits applied directly to natural gas and electric bill 15

16. NJ USF Benefit Calculation Annual income: $10,000 Burden targeted at 3% of income Estimated gas bill: $1400 LIHEAP benefit: $500 Net gas bill: $900 Targeted bill: $300 Annual subsidy: $900 - $300=$600 Monthly credit: $600/12=$50 16

17. INTERACTION OF AFFORDABILITY AND EFFICIENCY PROGRAMS 17

18. Program Coordination Energy Efficiency Programs Linkage Options –Refer –Target (NJ CP method) –Requirement for participation Linkage Advantages and Disadvantages –Advantage: reduce ratepayer subsidy –Disadvantage: may not all be the highest users 18

19. Coordination LIHEAP/Utilities/BPU –Program administered by LIHEAP office (DCA) –LIHEAP/USF application has income and heating fuel –DCA pays LIHEAP grant to utilities (annual credit) –Utilities furnish information on annual energy bill –DCA computes USF benefit and informs utilities –Utilities furnish USF benefit (monthly credit) –Utilities are reimbursed for USF from SBC fund Usage Reduction –Comfort Partners / USF – Targeting coordination 19

20. NJ CP Participants Receipt of USF Credits 20 USF Credits Received TreatmentComparison Pre and Post 2,49060%3,97864% Pre Only 2837%1913% Post Only 2476%89915% Neither 1,12427%1,11818% Total 4,144100%6,186100%

21. 21 Affordability Program Types Gross Bill Fixed PaymentFixed CreditDiscount $10,000 income 9% = $900/12=$75 $10,000 income 9%=$900 $1400 estimated bill $1400-$900=$500 $500/12=$42 60% discount BillSubsidyBillSubsidyBillSubsidy Initial$300$75$225$258$42$120$180 Rate Increase $360$75$285$318$42$144$216 Usage Reduction $240$75$165$198$42$96$144

22. Complications Maximum Annual Credit –$1,800 Energy Burden Target –6% Annual Credit Adjustment –Benefits accrue to customer in short-term 22

23. Example Impact #1 23 PrePostChange Income$10,000 Bill$1,000$850-$150 Burden10.0%8.5%-1.5% USF Subsidy$400$250-$150 Customer Payment$600 $0 Net Burden6% 0.0% All benefits to ratepayers.

24. Example Impact #2 24 PrePostChange Income$10,000 Bill$650$552.50-$97.50 Burden6.5%5.5%-1.0% USF Subsidy$50$0-$50 Customer Payment$600$552.50-$47.50 Net Burden6%5.5%-0.5% Benefits split between customers and ratepayers.

25. Example Impact #3 25 PrePostChange Income$10,000 Bill$3,000$2,550-$450 Burden30.0%25.5%-4.5% USF Subsidy$1,800 $0 Customer Payment$1,200$750-$450 Net Burden12%7.5%-4.5% All benefits to customer.

26. Example Impact #4 26 PrePostChange Income$10,000 Bill$2,400$2,040-$360 Burden24.0%20.4%-3.6% USF Subsidy$1,800$1,440-$360 Customer Payment$600 $0 Net Burden6% 0% All benefits to ratepayers.

27. AFFORDABILITY IMPACTS 27

28. Bill and Payment Impacts Electric Baseload 28 Treatment GroupComparison Group Net Change PrePostChangePrePostChange Observations2,1432,307 Bills$1,416$1,189-$227 ** $1,519$1,357-$162 ** -$65 ** Other Charges$40$71$31 ** $49$73$25 ** $7 Total Charges$1,456$1,260-$196 ** $1,568$1,430-$137 ** -$58 ** # Payments9.08.0-1.0 ** 9.08.0-1.0 ** >-0.1 Cash Payments$1,018$811-$207 ** $1,126$869-$256 ** $50 ** Assistance Payments$398$444$46 ** $397$558$161 ** -$115 ** Other Credits$17$36$18 ** $19$37$19 ** >-$1 Total Credits$1,443$1,300-$144 ** $1,552$1,477-$75 ** -$69 ** Cash Coverage Rate71.8%64.5%-7.3% ** 72.8%61.9%-10.9% ** 3.6% ** Total Coverage Rate99.8%103.8%4.0% ** 99.4%104.5%5.1% ** -1.1% Balance Change$31-$56$87 ** $40-$64$104 ** -$17

29. Bill and Payment Impacts Electric Heating 29 Treatment GroupComparison Group Net Change PrePostChangePrePostChange Observations348557 Bills$2,284$1,927-$357 ** $2,451$2,194-$257 ** -$100 ** Other Charges$66$94$28 * $66$81$15 # $13 Total Charges$2,349$2,021-$328 ** $2,517$2,276-$241 ** -$87 ** # Payments8.16.5-1.6 ** 8.76.2-2.5 ** 0.9 ** Cash Payments$1,383$1,037-$346 ** $1,586$1,032-$554 ** $208 ** Assistance Payments$895$889-$6$849$1,092$243 ** -$249 ** Other Credits$46$205$159 ** $40$212$172 ** -$13 Total Credits$2,338$2,141-$198 ** $2,485$2,346-$139 ** -$59 Cash Coverage Rate57.5%49.0%-8.5% ** 62.9%43.2%-19.7% ** 11.2% ** Total Coverage Rate99.6%106.1%6.4% ** 99.5%104.1%4.5% ** 1.9% Balance Change$27-$156$183 ** $54-$120$174 ** $8

30. Bill and Payment Impacts Gas Heating 30 Treatment GroupComparison Group Net Change PrePostChangePrePostChange Observations1,8131,556 Bills$1,276$1,033-$243 ** $1,342$1,090-$252 ** $10 Other Charges$46 >-$1$20$17-$4 * $3 Total Charges$1,322$1,078-$243 ** $1,363$1,107-$256 ** $13 # Payments6.75.6-1.1 ** 6.95.3-1.6 ** 0.5 ** Cash Payments$743$551-$193 ** $816$530-$286 ** $93 ** Assistance Payments$516$512-$4$500$599$99 ** -$103 ** Other Credits$85$71-$13 ** $52$51>-$1-$13 * Total Credits$1,349$1,136-$214 ** $1,372$1,185-$187 ** -$26 Cash Coverage Rate55.7%49.0%-6.7% ** 58.8%44.9%-14.0% ** 7.2% ** Total Coverage Rate102.6%106.2%3.6% ** 101.3%107.7%6.4% ** -2.8% * Balance Change-$17-$76-$59 ** $7-$96-$102 ** $43 *

31. Bill and Payment Impacts Combination Fuel 31 Treatment GroupComparison Group Net Change PrePostChangePrePostChange Observations1,3863,023 Bills$2,693$2,255-$439 ** $2,739$2,403-$336 ** -$103 ** Other Charges$95$99$4$107$116$9 * -$5 Total Charges$2,788$2,354-$434 ** $2,847$2,519-$327 ** -$107 ** # Payments8.36.9-1.4 ** 8.36.7-1.6 ** 0.2 # Cash Payments$1,742$1,289-$453 ** $1,726$1,228-$498 ** $45 Assistance Payments$1,099$1,069-$31 # $1,140$1,351$211 ** -$241 ** Other Credits$35 <$1$37$36>-$1$1 Total Credits$2,876$2,392-$484 ** $2,903$2,615-$288 ** -$195 ** Cash Coverage Rate60.7%52.1$-8.6% ** 59.8%46.7%-13.1% ** 4.5% ** Total Coverage Rate103.5%102.1%-1.4% # 102.4%104.2%1.9% ** -3.3% ** Balance Change-$57-$53$4-$17-$92-$75 ** $79 **

32. Bill Impacts Jobs with Major Measures 32 Treatment GroupComparison Group Net Change Obs.PrePostChangeObs.PrePostChange Electric Baseload810$1,509$1,256-$253 ** 841$1,600$1,443-$157 ** -$96 ** Electric Heating136$2,776$2,289-$486 ** 239$2,631$2,410-$221 ** -$265 ** Gas Heating916$1,417$1,087-$330 ** 665$1,458$1,192-$267 ** -$63 ** Combination990$2,840$2,370-$470 ** 1,806$2,929$2,570-$359 ** -$112 **

33. Assistance Payments 33 Electric Baseload Treatment GroupComparison Group Net Change PrePostChangePrePostChange Observations2,1432,307 Lifeline Payments$41$42$1$38$42$4 ** -$3 * LIHEAP Payments$9$19$10 ** $10$27$18 ** -$8 ** USF Payments$339$378$39 ** $342$478$136 ** -$97 ** Other$9$6-$4$6$10$3 # -$7 * Total$398$444$46 ** $397$558$161 ** -$115 ** Electric Heating Treatment GroupComparison GroupNet Change PrePostChangePrePostChange Observations348557 Lifeline Payments$111$120$9$106$128$22 ** -$12 # LIHEAP Payments$316$296-$20$286$333$47 ** -$67 ** USF Payments$460$470$10$450$625$175 ** -$165 ** Other$8$3-$5$7 <$1-$5 Total$895$889-$6$849$1,092$243 ** -$249 **

34. Assistance Payments 34 Gas Heating Treatment GroupComparison GroupNet Change PrePostChangePrePostChange Observations1,8131,556 Lifeline Payments$44$41-$3 ** $37$40$3 ** -$6 ** LIHEAP Payments$237$275$38 ** $220$310$90 ** -$52 ** USF Payments$224$189-$34 ** $232$240$8-$42 ** Other$11$6-$5 * $11$9-$2-$3 Total$516$512-$4$500$599$99 ** -$103 ** Combination Treatment GroupComparison GroupNet Change PrePostChangePrePostChange Observations1,3863,023 Lifeline Payments$47 <$1$50$52$3 # -$2 LIHEAP Payments$291$304$12$291$410$119 ** -$107 ** USF Payments$728$695-$32 * $769$855$85 ** -$118 ** Other$33$23-$11 * $30$34$4-$14 * Total$1,099$1,069-$31 # $1,140$1,351$211 ** -$241 **

35. Total Bill Coverage Rate Electric Heating Jobs 35 Treatment Group Comparison Group PrePostPrePost Observations348557 <80%8%6%8%5% 80-89%9%8%12%10% 90-99%25%16%25%24% ≥100%58%70%56%60% Total100%

36. UNIVERSAL SERVICE PROGRAM IMPACTS 36

37. Change in USF Credit All Jobs 37 Change in Last Month USF Credit Amount from Pre to Post Period Customers with USF Credits in Pre and Post Period TreatmentComparison % of Customers Average $ Change % of Customers Average $ Change Observations2,4903,978 Increase32%$3937%$42 Decrease56%-$4851%-$47 No Change11%$013%$0 Total100%-$14100%-$8

38. Change in USF Credit Electric Heating Jobs 38 Change in Last Month USF Credit Amount from Pre to Post Period Customers with USF Credits in Pre and Post Period TreatmentComparison % of Customers Average $ Change % of Customers Average $ Change Observations196349 Increase 32%$3639%$40 Decrease 46%-$5040%-$57 No Change 22%$021%$0 Total 100%-$12100%-$7

39. SUMMARY 39

40. Findings Interactions between usage reduction and assistance benefits are complicated Charges down Assistance payments down Benefits to ratepayer and customer 40

41. Contact Jackie Berger, Ph.D. President and Co-Founder APPRISE 32 Nassau Street, Suite 200 Princeton, NJ 08542 609-252-8009 jackie-berger@appriseinc.org www.appriseinc.org 41