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Energy Incentive Programs, Texas

Updated November 2012

What public-purpose-funded energy efficiency programs are available in my state?

The Public Utility Commission of Texas (PUCT) oversees a set of statewide "standard offer" and market transformation programs that are available to customers in each of the investor-owned utilities' service territories. The programs are funded through a systems benefits charge on transmission and distribution services and are administered by the utilities. In 2011 roughly $135 million was budgeted for energy efficiency and load management across all program types (including residential and low-income). To access utility-by-utility information on specific offerings, visit the Texas Energy Efficiency web site.

All of the state's investor-owned utilities offer The Commercial and Industrial Standard Offer Program (CISOP), which provides incentives to implement energy efficiency measures in retrofits, renovations and new construction projects. Direct links to the various utilities' programs are as follows:

Under the CISOP incentives are paid for both energy and summer peak demand savings and are based on either deemed savings values or verified peak demand and energy savings. Eligible efficiency technologies include high-efficiency lighting, lighting controls, heat pumps, chillers, motors, variable speed drives, refrigeration units and custom measures. Some utilities, e.g., Xcel, allow certain renewable energy measures as well. Though incentive levels and eligibility requirements vary across the utilities in Texas, the basic program requirement is that customers have a minimum peak demand of 100-250 kW (depending on the utility). As required by state legislation, the utilities do not perform energy efficiency services, but instead contract with Project Sponsors, who may include service providers (e.g., national or local ESCOs or other contractors), commercial property developers, design/build firms, and individual customers who implement energy efficiency measures in their own non-residential facilities. Conservation measures are not prescribed, but together must provide at least 10 to 50 kW (depending on the utility) of summer peak demand savings per project. Incentive payments range from $36 to $260 per peak kW reduction and $0.01 to $0.14/kWh of first-year savings.

CenterPoint, Entergy, El Paso Electric, Texas-New Mexico Power, and Oncor also sponsor small commercial standard offer programs, in which program-eligible contractors make retrofits to small facilities and receive incentives from the respective utilities, thereby subsidizing the costs charged to participants. Qualifying measures include high-efficiency lighting, air conditioning, heat pumps, air sealing, insulation, window film, and photovoltaic systems.

CenterPoint offers additional programs of interest to federal customers including the following:

  • The Commercial and Industrial Retro-Commissioning Program is geared towards identifying low-cost peak demand and energy savings. The program provides financial incentives of $25/kW and $.01/kWh saved under the "Fast Track" option ($5,000 maximum for facilities with 150,000-400,000 sq. ft. of air-conditioned space) and the "Full Program" ($10,000 maximum for projects with 400,000 or more sq. ft. of air-conditioned space). CenterPoint provides a qualified commissioning agent at no cost to commission customers' facilities in exchange for a commitment by the facility to invest a minimum amount and complete the project in accordance with an agreed-upon project schedule.

  • The Commercial LED Lighting Program offers 2012 incentive rates of $230/kW for on-peak demand savings and $0.14/kWh for annual energy savings for installation of qualified lighting equipment.

El Paso Electric customers with over 100 kW of maximum demand are eligible for the Large Commercial Solutions Program, which provides technical assistance and cash incentives ($240 per reduced peak kW) for qualifying efficiency and peak reduction measures in new construction and retrofit projects, including lighting, HVAC and roofing.

Oncor offers a variety of other efficiency programs for non-residential customers. The Government Facilities Program provides free energy use analysis, benchmarking reporting and engineering support to identify measures and incentives to buy down costs.

What utility energy efficiency programs are available to me?

Please see the section above for information regarding standard offer programs offered by Texas' investor-owned utilities. A number of municipal utilities and rural cooperatives also offer energy efficiency programs to their customers. These are profiled on the DSIRE energy efficiency site.

Austin Energy offers a variety of programs for its non-residential customers:

  • The Commercial/Business Rebates and Incentives program, provides incentives for energy efficient air conditioning, lighting, chillers, energy recovery ventilators, motors, variable speed drives, window treatments, building commissioning, reflective roofs, and custom measures in existing buildings and new construction projects.

  • The Data Center Efficiency Rebate provides up to $200,000 in rebates toward the costs of retrofitted server virtualization, Massive Array Idle Disc (MAID) storage systems, uninterruptible power supplies, cooling towers, thermal energy storage and other custom technologies.

  • The Small Business program provides a 30% bonus rebate in addition to the standard commercial rebate to qualified small-to-midsize and not-for-profit organizations for efficient air conditioning, lighting window tinting and roof coating. Special rebates for retrofitting T-12 lighting with 32-watt T8s or better cover up to 70% of the installed cost.

CPS Energy (San Antonio's municipal utility) provides Commercial and Industrial Rebates for efficient HVAC systems, water heating, lighting, refrigeration, cooking equipment, reflective roof products, window coatings, premium efficiency motors, and innovative or custom technologies not otherwise addressed.

CPS also offers the New Commercial Construction Incentive for projects that address whole building performance and are at least 15% more energy efficient than the City of San Antonio building code. The program offers three incentive tiers for both energy savings ($0.08/kWh to $0.20/kWh) and peak demand reduction ($125/kW to $200/kW) based on how much the project's efficiency exceeds code.

Through its GreenSense Rebates program, Denton Municipal Electric provides a Standard Offer Program for small (up to 100 kW reduction) and large (> 100 kW reduction) energy efficiency projects, as well as rebates for commercial efficiency measures that involve a capital investment including lighting, HVAC and motor replacement, windows and insulation. The program does not prescribe measures; program participants submit a detailed scope of work proposal. Projects that rely on customer behavior, involve cogeneration, demand management (other than renewable) or managing plug loads, or that have a negative impact on the environment are not eligible.

Pedernales Electric's Commercial Lighting Rebate Program provides cash incentives of up to $150/kW reduced for new construction, or $300/kW reduced for existing buildings.

Texas Gas Service offers rebates to its commercial customers for purchase of high-efficiency hydronic heating, natural gas and solar water heating, furnace and food service equipment.

What load management/demand response options are available to me?

Federal customers can receive payments for providing load curtailments through several programs offered by the Electric Reliability Council of Texas (ERCOT).

  • Load Resource Participation in the Ancillary Services Markets: Customer load curtailment offers can be bid into a number of different ancillary services markets. Participation requirements and compensation depend upon the particular market, and all programs require that customers have real-time telemetry installed. For the Responsive Reserve and Non-Spinning Reserve markets, capacity payments are made regardless of whether the customer is called upon to curtail.

  • Voluntary Load Response: Customers may be able to receive financial benefit from their electricity provider for curtailing load at their discretion, when wholesale electricity prices are high.

  • Emergency Response Service (ERS): As with the Load Resource program, customers bid to provide load reductions. However, this program is aimed solely at alleviating emergency (as opposed to high price) conditions on the ERCOT grid.

For all programs, the customer participates through their Retail Electricity Provider (REP), and transactions with ERCOT are conducted by the qualified scheduling entity (QSE) for the customer's REP. The specific terms for customer participation, including compensation, are based on the contractual arrangement between the customer and their REP.

CenterPoint Energy's Load Management Standard Offer Program provides up to $40/kW to participants for curtailing load for up to four hours during four unscheduled peak (1-7 p.m.) events during summer weekdays (June 1-September 30). There is also a single one- to three-hour scheduled curtailment each year to validate reduction capability. Participants must have a minimum aggregate peak demand of 750 kW (at least 250 kW per individual site) and agree to curtail at least 100 kW per site. Aggregators (e.g., ESCOs or curtailment service providers) can also participate in the program.

El Paso Electric offers its Load Management Program to customers who can curtail at least 100 kW per participating site during the summer (June 1 through September 30) with one hour notice. Customers receive $60 per kW of load reduction based on the average kW curtailed (see program manual for additional payment details). Up to ten peak events per year, lasting up to five continuous hours each, may be called weekdays from 1- 7 p.m. Mountain Daylight Time.

Oncor's Load Management Program provides remuneration directly to service contractors (e.g., ESCOs, aggregators, energy efficiency service providers, retail electric providers and utility customers), to reduce peak demand in facilities during the peak demand period (weekdays between 1 p.m. and 7 p.m. June 1 through September 30). Eligible facilities have the ability to curtail at least 100 kW with a one hour notice.

Xcel (Southwestern Public Service Company) offers several load management programs:

  • The Interruptible Credit Option is available to customers who can maintain 500 kW of interruptible electric demand during June through September. Remuneration in the form of a monthly credit is based on the amount of reduction enrolled, the maximum annual hours of interruption and the advance notice needed, so it ranges widely (from $2.23 to $6.58 per kW of the controllable load during summer). Interruption events are called due to capacity, contingency and/or economic constraints on the electric system. For economic interruption events only, customers may choose to buy-through the interruption and avoid curtailing part or all of the contracted interruptible load.

  • The Peak Day Partners program provides bill credit or direct payment for customers who voluntarily accept an offer to reduce electricity loads during peak events, which usually occur weekdays from June 1 through September 30. Customers must be able to reduce electricity load by at least 500 kW, and accept or decline offers to commit to a minimum load reduction for individual events via a secure internet-based system. Customers may combine this program with the Interruptible Credit Option if they can reduce load by at least 500 kW below their contract Firm Demand level.

  • The Saver's Switch for Business offers program participants an October bill discount of $20 per ton of enrolled air conditioning in exchange for customers allowing the utility to cycle the air conditioning on and off for 15- to 20-minute intervals during periods of peak electric demand in the summer. To be eligible, customers must have a central air conditioning unit with at least 5 tons of cooling capacity.

CPS offers its Demand Response program to customers with a curtailable load of at least 50 kW per single site. Incentives are based on verified performance during peak events, which can be called with a two-hour advance notice between 1 and 7 p.m. on weekdays from June 1 to September 30 (though they typically occur between 3 p.m. and 6:30 p.m.). Customers may choose to receive incentive payments as a check or as a credit posted to their account.

AEP provides a Load Management Standard Offer Program to its distribution customers with demand of 500 kW or greater. Incentives of $25/kW or $35/kW (depending on option chosen, up to a maximum of $75,000 and $87,500 for the year respectively) are based on verified demand savings that occur as a result of an interruption. AEP offers the program in all three of its service territories: Texas Central, Texas North, and SWEPCO. Participants must be prepared to curtail electric load with one hour notice from the utility. The program performance period is for one year, during which time customers receive one scheduled load interruption, and (depending on the agreement) up to four to twelve unscheduled interruptions.

Austin Energy offers the Load Cooperative Program wherein customers receive incentives for curtailing unnecessary load during peak demand periods (up to fifteen three-hour intervals between 1 and 8 p.m., June through September). Customers receive a cash payment of $1.25/kWh (60-minute notification) for energy reduced during actual load curtailment periods. Load Cooperative participants have free access to the web-based Load Profiler tool, which can generate reports on daily energy usage, peak demand, and power and load factor.

Texas-New Mexico Power Company's (TNMP) 2011 Commercial Load Management Pilot Standard Offer program offers incentives of up to $40 per kW for curtailing at least 50 kW for a maximum of 18 hours total, spread over a maximum of five event days (no more than four hours on any given event day) from June 1-September 30, between 1 and 7 p.m. Payment is based on amount of load curtailed; customers are not required to curtail a specific amount and there are no penalties for non-delivery of load reduction. Applications will be evaluated on a first-come, first-served basis and accepted until TNMP has reached a target of 4 MW of curtailed load.

What distributed energy resource options are available to me?

The Database of State Incentives for Renewable Energy (DSIRE) provides information on programs that offer incentives for renewable distributed generation. The following programs may of interest to federal customers:

  • AEP/SWEPCO's SMART Source(SM) Solar PV Program offers $1.50/watt for non-residential systems with a maximum incentive of $37,500 (equivalent to a 25 kW system). AEP Texas Central

  • Austin Energy's Power Saver ™ Solar Photovoltaics program provides a performance based incentive (PBI) of $0.14 per kWh for systems up to 200 kW (AC). Qualifying equipment that is 60% manufactured or assembled in AE's electric service area may earn a rate up to $0.175 per kWh.

  • CPS Energy's Solar PV Rebates program offers $2.00/watt (AC) for the first 25 kW of capacity ($1.30/watt for remaining capacity output above 25 kW) for commercial projects using a local installer, and $1.30/watt for projects not using a local installer on systems up to 100 kW (maximum $100,000). For larger systems, customers should contact CPS for details. Eligibility is determined by a pre-inspection of the site. Installers must be registered with CPS.

  • El Paso Electric's Solar PV Pilot Program offers $1.75/watt (DC) for non-residential projects up to a maximum of $87,500.

  • Oncor's Solar PV Program was launched in November 2012. Interested federal customers are advised to check the website for announcements and updates.

Are there energy efficiency programs sponsored by state government?

For information on state-sponsored energy efficiency programs, contact the State Energy Conservation Office at the Texas Comptroller of Public Accounts. Currently there are no state programs available to federal agencies.

What additional opportunities are available to me?

Federal customers whose utilities have area-wide contracts through GSA (e.g., Atmos Energy (Lone Star Gas), CenterPoint Energy, Central Power & Light, CPS Energy, El Paso Electric, Entergy, and Southwestern Public Service Company) may be able to take advantage of 3rd-party financed energy efficiency projects called utility energy services contracts (UESCs). Information is available on GSA's Energy Center of Expertise Library Page. Federal facilities should contact their account executive to determine the level of each utility's participation.

NOTE: Energy efficiency funds and demand response programs are updated at least annually.