EECLP Webinar #1: Overview and Cost Effectiveness -- Text Version

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Below is the text version of the webinar, EECLP Webinar 1: Overview and Cost Effectiveness, presented in December 2014.

Odette Mucha:
First slide:

Hello, everyone, and welcome to the webinar. Today we will be discussing the Energy Efficiency and Conservation Loan Program from USDA's Rural Utility Service. We're excited to bring you the first of a six-part webinar series where we'll walk you through the key elements of the program, and we'll highlight best practices from around the country in both energy efficiency and renewable energy program administration.

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Today we'll hear from a few experts from around the federal government. We'll start with Gerry Moore, who is the acting deputy assistant administrator of the Electric Program in USDA's Rural Utility Service. And he'll give us an overview of the program. And then we'll hear from Eric Cutter, who is a senior consultant at Energy and Environment Economics. And I'll go back one slide ... We'll also hear from Mike Li, who is a senior policy adviser here at EERE, the Office of Energy Efficiency and Renewable Energy at the Department of Energy. And I'm your host, Odette Mucha. I'm in the Office of Stakeholder Engagement. And just a quick housekeeping: We have five more webinars after this one, so we hope you'll join us for those. And as we go through the slides, if you have any questions, feel free to enter them into the chat bar, and we'll take questions at the end. So you'll see on your GoToWebinar, there's a chat box. Just enter in your questions there, and we'll get to them at the end. Alright, and with that, I'll hand it over to Gerry Moore.

Gerry Moore:
Next slide:

Well, hello. My name is Gerry Moore. I'm with the U.S. Department of Agriculture. I work in the Rural Utilities Service. That's called RUS. Specifically, I am the acting deputy assistant administrator of the Electric Program. I will discuss with you today a new eligible activity for RUS loan fund. We will discuss the new Energy Efficiency and Conservation Loan Program, which we'll call EECLP. I was heavily involved in the writing of the program regulations and worked with the team throughout that whole time. We received a lot of comments from the public as well as cooperatives. These comments were about the contents of the regulation and how we might change it and how we might tell it. Some agencies added comments. Some agencies added best practices, such as DOE. And they helped shape this regulation. Next slide.

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Let me first tell you a little bit about the Electric Program. We make loans to electric utilities to build electric infrastructure in rural America. Our loans are used to fund electric generation, transmission, and distribution infrastructure across rural America. We offer electric loans at federal financing bank rate plus one- eighth percent. We have over 600 rural electric cooperatives borrowing from us presently, but our loans are not limited to rural cooperatives, though. We have a loan portfolio of over $46 billion and a subsidy rate of below one-half of one percent. The RUS Electric Program has been around for over 75 years. Next slide.

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The 2008 Farm Bill made energy efficiency an eligible purpose for RUS loan fund. We drafted an associated regulation to implement this, and the regulation is now final, and the loan funds have been available just since February of 2014. The regulation now allows Electric Program borrowers to relend our loan funds to their consumers to implement energy efficiency upgrades. These consumers may be residential, commercial, industrial, or any combination of them. These efficiency upgrades are to be located on the consumer side of the electric meter. These upgrades must also be undertaken in our borrowers' service territory. Eligible efficiency upgrades include HVAC upgrades, lighting, ground source heat pumps, and load modifiers, as we define them, such as small-scale renewables like solar or wind and sold on the consumer side of the electric meter. But we don't dictate the type of efficiency upgrades our borrowers undertake. The regulation is actually very flexible. We seek to enable our borrowers' efficiency ideas, not dictate them. So bring us your ideas for an energy efficiency program. Let's talk about your ideas. Next slide.

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A typical RUS borrower's energy efficiency program would have the utility relending loan funds to their consumers. The utility can charge an interest rate of above the cost of money from RUS. That interest rate is presently limited to 1.5 percent. So the total interest rate is federal financing bank, plus one-eighth, plus the 1.5 percent. On- bill repayment of the consumer loan is a popular option. Loan terms are determined based on useful life of the efficiency upgrades or an aggregate thereof. Terms can be up to 30 years. The loan requirements for energy efficiency are similar to our existing program, but we do ask for some new requirements from our borrowers if they seek these type of loan funds. That is, an energy efficiency business plan and an energy efficiency quality assurance plan. Any utility that has an existing energy efficiency program should pretty much already have these type of documents or documents similar to these on hand. These requirements are proven business practices. They're not intended to be onerous. We're not trying to make it difficult, and we have seen borrowers coming with many examples of these type of plans that look really good. Many of these plans were developed by cooperatives. And we use some of those cooperative models for our model in the regulation. Also, there is an example of an opportunity for state organizations or generation and transmission cooperatives and nonprofits to play a role here. Many borrowers are small utilities with limited resources. The larger the borrowing entity becomes, such as some sort of statewide entity, or greater than a distribution co-op entity, the greater the economies of scale achieved when establishing or running a program. Next slide.

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Some provisions of the EECLP include using on-bill financing, for instance. Also, the borrowers' efficiency program may be a loan-based program or a tariff-based program. Tariff-based programs allow for a kind of a loan to the utility meter as opposed to a loan to the individual. This can be advantageous in situations when, let's say, the consumer cannot qualify for a loan or situations involving rental units or some applications of commercial property. We allow loans to be serviced through a third party, also. It might be a bank, or a credit union. That is, if you were interested in this option. Next slide.

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As you may know, RUS loans are on a reimbursement basis. The borrower performs agreed-upon work and then comes back to us for reimbursement for funds expended. Start-up costs of up to 5 percent of the loan funds are available in advance, though, to help kick off your loan program. We do limit consumer education and outreach to 5 percent, though. After all, RUS primarily funds infrastructure investment. Next slide.

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We mentioned some additional requirements we seek from our borrowers associated with EECLP. We mentioned business plans, quality assurance plans. These plans should only be as complicated as your energy efficiency program. Don't get intimidated by them. We have just recently approved our first two energy efficiency loans. We have received numerous business plans and have approved a number of them. We've actually been impressed at how well these plans have been thought-out. However, I do think some potential borrowers may be nervous about supplying this type of documentation the first time. Creating these plans is definitely a place where like a GNT or a statewide organization could help out, sometimes nonprofit. That's when you consider the economies of scale. Next slide.

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Now, let's talk about who is an eligible borrower. We have constraints on who we can lend to based on statute and regulation. Eligible borrowers should be, 1) an entity in the business of providing direct or indirect retail electric service to consumers in rural areas, 2) an entity in business of providing wholesale electric supply to distribution entities providing service to consumers in rural areas, 3) an entity in the business of providing transmission service to distribution or generation entities providing service to consumers in rural areas. Next slide.

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Let's talk a bit about what we call "rurality," what it is to be rural. Of course, our borrowers need to serve persons living in rural areas. This slide just provides detail as to exactly what rurality means. Drilling down to it, essentially rural area is any area other than a city, town, or unincorporated area that has a population of greater than 20,000 inhabitants. Serving rural America is at the heart of what we do at RUS. Next slide.

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Here's just a graphic example of eligible borrowers of EECLP. You can see there under A, or connected to A, is generation borrowers. Over at B, it could be a transmission borrower. C, distribution borrower. Combinations thereof. The bottom line is that no matter what entity you belong to, you just need to serve rural America, direct or indirect, providing electrical service. Next slide.

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Now, when it comes to effectively using EECLP funds, you may want to consider leveraging. The borrower does not have to leverage, but sometimes it's a good idea. For instance, there are funds available for energy efficiency from other rural development sources. These can be used together with EECLP. REDLAG funds can be used, and are used, by many RUS borrowers for energy efficiency programs. REDLAG has 0 percent interest loan funds, but there is a limited term and a limited amount of funds available and they are on a competitive basis. But REDLAG just might be a good source of funds to get your program started, for instance, then EECLP can help sustain the program in the long run. There are also a number of other options. Just contact us if you have any questions regarding leveraging. Next slide.

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Now, just giving an overview of EECLP, there's so much more to discuss. DOE contributed best practices to the regulation. They have a great deal of experience in energy efficiency programs. DOE has offered to discuss items in the regulation in further detail to help support our U.S. borrowers. Some items for discussion during the webinar series will include cost-effectiveness, program evaluation, monitoring, and verification, residential energy efficiency, and we'll talk about solar power application. These webinar topics may be more detail than you require for your specific program, but we want to help you in developing a robust energy efficiency program. If you have a chance, please take a look at our website, and there should be my phone number there. For more information, check the website or call me at 202-720-6285. Now, I thank you, and I want to pass you on to Mike to talk about cost- effectiveness.

Odette Mucha:
OK, great. Thank-you so much, Gerry. This is Odette again. We had a couple questions that came through about whether the slides will be available to the participants, and I just want to let everyone know we'll be sending out the slides via email afterward. So you'll have them, and you can print them, read them at your leisure. OK, next up, here's Mike Li, here from the Department of Energy.

Michael Li:
Hi, this is Mike Li. I'm not actually going to say too much today. You'll get to hear from me a little bit later in the webinar series. I just really want to sort of introduce you to Eric Cutter from E3, who's going to be presenting on cost-effectiveness for us. E3 has been doing some work for the Department on cost-effectiveness in the past, and so I'm sure Eric will provide a great presentation for you all. And for those of you that are interested, I just want to call your attention to, there's a part of the DOE website called SEE Action, S-E-E Action. There's a bunch of resources on (inaudible), so I'll provide that link to you in the future, so you can get access to some of the stuff that we're not going to have a full chance to cover on the webinar today. So with that, Eric why don't I turn it over to you, and Odette will advance your slides as you go.

Eric Cutter:
OK, great. Thanks for the opportunity, and a quick background on E3.

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We're Energy and Environmental Economics. We've been working in California -- we're based in California, but working throughout the U.S. And we really got our start as a small firm working on valuing the cost-effectiveness of distributed resources, and of course, one of the main ones is energy efficiency. So we've been working with the Public Utilities Commission in California since 2004, developing the methods used to calculate the avoided costs, that are the benefits of energy efficiency, and then the cost tests on how to report the cost-effectiveness of those programs. And I'll describe about how that process works. Next slide.

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It's helpful to start with the premise or why do we do cost-effectiveness for energy efficiency in the first place? And this comes out of, we're used to, larger utilities especially, used to do a fairly complex biennial or triennial resource planning exercise to decide what power plants to build to meet their forecasted loads. And when energy efficiency came along, it really didn't make sense. We'd wanted to do integrated resource planning and have energy efficiency be considered as a resource to meet loads alongside with the generating resource, but in order to do that, where energy efficiency is really investing in a lot of very small measures and programs over the course of the year, and it didn't make sense to just look at it every three years. So the cost- effectiveness is really designed to be an approximation of, does energy efficiency provide you with a more economic way to meet your utility's load than your alternative supply- side resource plan? So effectively answering the question, is this measure or this program less expensive than building a new power plant? And so that's the high level of what our cost-effectiveness evaluation is designed to answer. Next slide.

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And so there are really four basic steps at the highest level, putting this all together. And the first is calculating avoided costs, which is a bit of funny term. But it stems from the idea that energy efficiency is avoiding costs that the utility would otherwise spend to generate energy. So oddly, it's called an avoided cost, but it really is measuring the benefit that energy efficiency provides to you as a utility and to your ratepayers and to the state as a whole. So we calculate the avoided costs to determine what the benefits of energy efficiency are. And then you or the utility have your measures, and by measure I mean, an LED lightbulb, or an efficient refrigerator, or windows or insulation, and programs that provide marketing, outreach, education to get those measures out there. And the utility puts in all the information. What their programs cost, and how many units of each measure they've installed, and what customers they've installed them with, and those two together -- the measure data, which includes for each measure how much energy you're saving, and the shape of that savings over the course of the year. And I'll cover that in a little bit. And together those go into usually a spreadsheet calculator. It's not rocket science. It's pretty basic algebra, of putting the two together. And calculating the cost of your program and the benefits of your program. And in many areas, it's a requirement of the public utilities commission, but even where it's not, it's -- we've found it's really nice to err on the side of simplicity and transparency. So you have calculations and numbers that are available for public review, and that way it's out there for people who have an efficiency program they want to promote, for community organizations, or cities. All sorts of other stakeholders on the ground who are interested in energy efficiency can understand how the cost-effectiveness is being done. And then those results are reported in the form of cost tests, which we're going to cover in a few slides. That began with what's called a standard practice manual in California, but it's been widely adopted throughout the U.S. as the basic measure of cost-effectiveness for energy efficiency. Alright, next slide.

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So avoided costs. These two slides are an example of the benefits that energy efficiency provides, and this is what we calculate in California. An hourly avoided cost. On the right -- sorry, on the left-hand side, you can see kind of the average avoided costs across the year, by month, and our peak loads in California are in the summer. And so the labels are over there on the right. But the main component across most of the years is the avoided cost of generating energy, in the blue. And there are other benefits, too, and these aren't a comprehensive list, but these are the ones we use in California. The losses to deliver energy from the plants to the customer. GHG emissions in California and some states have an explicit cost. And then on the right- hand side, you see a peak day in particular where we are allocating the capacity benefits of energy efficiency, so notice the scales are quite different. Across the year, we're averaging $60, and on our peak summer months it gets up to $160 a megawatt hour. But on our peak days, on our very peak day, we add up all the costs. We have a cost of over $2,000 a megawatt hour, which is to say, a load that occurs in that hour is driving new investment in power plants and TND capacity. So if we save load in that hour, we're really saving more than just the variable cost. We're also saving some fixed costs of generating electricity. Now, many utilities won't want to or need to go to an hourly resolution of avoided costs. It's quite sufficient to do a time of use, high-load hour, low-load hour, or on- peak period, off-peak period, summer, winter. You get pretty close to a good answer just with a TOU period. You don't necessarily need to go to a TD 760 hourly resolution. Next slide.

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Alright. So the cost tests. The first one that is the primary test in most states is the total resource cost test. And it is answering, looking at, for your region as a whole, does it make sense to spend money on energy efficiency or something else, a power plant? And it's a measure of all the costs regardless of who spent them, and all the benefits regardless of who received them. So it's an aggregated measure. The next three tests are stakeholder tests. So they look more specifically at which groups within the state or within your service territory are going to benefit from energy efficiency. And the three main ones are the participants, so of course, that is, is the customer installing energy efficiency going to see benefits in terms of lower bills that exceed their costs? The utility, which is now commonly called the program administrator because in many states there are non- utilities that are in charge of energy efficiency. Governmental organizations or nonprofits. And those -- that's asking is the utility spending more or less on efficiency than it would spend on a power plant to generate electricity? And then finally is the ratepayer impact measure: Are your rates as a utility going to increase or decrease with energy efficiency? The bottom one is the societal cost test that is used in some states. Vermont is notable in adding a whole bunch of non-energy benefits to their calculations that makes sense to go on top of the total resource cost tests to determine cost-effectiveness. OK, next slide.

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This is a summary of what goes into those cost tests. I'll just cover the TRC and leave the rest for reference. The benefits are really these avoided cost savings that I just went through, both energy and capacity. And, for an electric utility, perhaps you're installing some heating -- more efficient insulation. That's also saving natural gas. So it may not be a direct benefit to your resource, but we would still count natural gas as a benefit, and in some states, water. So other savings that come from efficiency. And then the cost is all the costs of the equipment itself. So the cost of the lightbulb or the refrigerator. And the program costs: marketing, advertising, overhead, things that go into installing that refrigerator. The other three tests are taking the pieces specific to each of those stakeholders to determine whether they individually are going to see a benefit, as well. Next slide.

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Actually, press again, and we'll see -- one thing that comes up often with smaller utilities in particular is the notion of, is energy efficiency going to increase my rates? So, broadly, energy efficiency helps customers by reducing their bill, how much they're spending on energy in total. But you are reducing the amount of energy you're selling, so you have the same fixed costs, divided, shared among a smaller volume of sales. And that will have a tendency to increase your rates. That's really a function of whether the benefits you're seeing from efficiency are higher than the revenue you're losing from reducing your sales. Now in most areas, most measures are not going to pass a RIM test, a ratepayer test, because your rates are generally in most cases higher than your actual marginal costs. So in most cases, you're going to lose more revenue than you're going to save in costs. In many states, this is an acceptable trade-off. You're saying, we may be raising rates but we're reducing energy consumption overall. That's a benefit. We're reducing bills overall. That's a benefit. But some utilities and areas are concerned also about how much are rates going to go up as a result of energy efficiency. And that's what the RIM test is designed to look at. But it is the most restrictive. The fewest number of measures are going to pass a ratepayer test. More measures will pass a total resource cost test. So in states that are wanting to promote energy efficiency, the TRC -- the total resource cost test -- is the primary measure. In states that maybe are less eager to promote energy efficiency, they might use the RIM test as a more restrictive measure of cost- effectiveness. Next slide.

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I'll also leave most of this for reference. The next three slides, I think, are some fundamental concepts of cost and benefits in energy efficiency. The first, or the more important one is, what is the cost of your measure? And the key distinction is an incremental measure cost or a full measure cost. So most programs are looking at these top two boxes, which are a new insulation in a new building or replacing a piece of equipment, we'll say a lightbulb that has failed and the customer is going to go out and buy anyway. And here the key distinction is the measure cost is really just the difference between the cost of the efficient lightbulb and the cost of the standard lightbulb. Because the customer is already in the market to buy one anyway. And this is as contrasted to a retrofit, where you're going into a house and replacing a working piece of equipment, which is common with refrigerators. So a retrofit or early replacement or early retirement, you look at, is if they're not in the market for a new refrigerator. For example, it's the full cost of the refrigerator that counts as the cost of the measure. Let's go to the next slide.

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So this is -- I believe this is more reference. This is covering what I just discussed, that both on the early retirement you're counting a greater number of kilowatt- hour savings because your new device, your new refrigerator, is replacing a very old, inefficient refrigerator. So you both have the full measure cost, but you also have a higher kilowatt-hour savings associated with that measure, as compared to an incremental or a replacement -- burn-out, failure, replacement is also the various terms -- that you are counting just the difference in electricity consumption from the efficient lightbulb and the inefficient lightbulb, that is new -- both of them are new. So the short summary is, replacement measures will tend to have a lower cost and a lower kilowatt-hour savings, and the early retirement or retrofit will tend to have a higher cost and a higher killowatt-hour savings. Next slide.

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Another key decision for utilities is where are they going to measure cost-effectiveness. And most common is measuring it at the portfolio level, that is, you'd put all the efficiency in one big basket and you determine is it overall cost-effective. An alternative is to do it measure by measure and see if every single measure I'm implementing is cost-effective or not. The reason to do it at the portfolio level is to allow room for programs that are new, an emerging technology, or maybe specific to low income, that will have higher cost and may not pass cost- effectiveness. They're still programs that we want to promote for other reasons, for equity, or for developing technology, or for market transformation. So this example shows, overall we have a cost-effective portfolio, but one of the programs, the low-income program, isn't itself cost-effective, but it's made up for in other programs that are kind of extra cost-effective. Next slide.

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And then I think this is finally, the discount rate you'd use is another key component that will affect how the results come out. And generally, the utility WACC -- the weighted average cost of capital -- or for municipal utility, their cost of debt, is what we use mostly, but sometimes interveners or advocates or others will argue for using a lower discount rate, which will increase the cost- effectiveness of energy efficiency. Sometimes participants claim a very high discount rate, which lowers the cost- effectiveness of energy efficiency. And there's all sorts of justifications for different discount rates. But it is a key input to be aware of that will affect the results pretty dramatically. Next slide.

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I've covered just a few of the key kind of levers and inputs that will affect cost-effectiveness. There are a number of others. And I'm going to cover some resources to go look at this more fully, but in the end, the key decisions are what cost-effectiveness test do you or your region want to use to evaluate cost-effectiveness? Is it going to be more permissive for the total resource cost test, or more restrictive for a ratepayer impact measure? Are you going to implement this in a kind of open process or kind of keep it simple and do it in-house? There's a reason to do both. And in the end, making sure you have a balance of simplicity and complexity. But I would say one of the key ones for smaller utilities is you really don't have to worry about a very detailed avoided cost calculation. You can get a pretty good approximation with a few simple calculations based on time of use periods that gets you pretty far along in the process. Next slide, I think, has our contact info, which you can download.

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And then, I'll quickly go through the next three slides, which are examples and tools that are out there.

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This one is one we've developed in California for the municipal utilities, which range all the way from LADWP, a very big city, to some very small utilities that cover a few thousand people. So it's an example of a tool that tries to be very simple, where you enter your measures, and at the end of the day, you get a result at the top, showing your cost-effectiveness test, there on the right-hand side. You can download this tool if you care to, just to see an example of how a simpler tool works. It's developed for the Northern California Power Agency, on behalf of Municipal Utility of California.

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The next slide is a great resource from EPA. There's a bunch of reports specifically on all the cost- effectiveness, on program design, on EM and V. Even though it's from 2008, it's still a very good, thorough resource. It has a lot of great examples from around the country.

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And then the next slide is my final one, is a building tool that E3 developed for DOE that goes through in a fairly well-designed, simple interface, doing a cost-effectiveness analysis for specifically building energy efficiency program or measures. I'll make sure to provide a link to the website on that, if it's not later on in the slide deck. So that covers my portion of the talk today. And I'll pass it back for questions or other presentations.

Odette Mucha:
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Alright. Thank-you so much, Eric, OK, so I encourage everyone to send in your questions if you haven't yet. You can just type them in to the questions or the chat box. So one question that came in I thought we could start with is, does the EECLP require all information on cost- effectiveness? So everything we've covered -- is that required of the EECLP? And if not, what is required for EECLP?

Gerry Moore:
So, no, all of the options discussed are not required under EECLP. As it was mentioned in the presentation there, there's different options and different states for different purposes. But under EECLP, there's language in that regulation that tells you specifically what you really need to adhere to for cost-effectiveness. Going forward, beyond even EECLP, tracking your energy efficiency savings may help you in other ways, beyond just for the energy efficiency alone. But no, for smaller programs, it can be much simpler.

Odette Mucha:
OK, great. Another question that came in is an example; they're wondering if EV charging stations would fall under the EECLP, specifically if they're using solar power for those charging stations.

Gerry Moore:
So would they be eligible for EECLP? I guess that really goes back to, if the borrower of the funds is eligible. If they envision those stations as modifying their system loads, then that could be a possibility. So it depends on who's trying to borrow for that purpose, and it depends on how they see that particular structure or particular application impacting their system. Systemwide. How does it impact systemwide? So it is possible.

Odette Mucha:
So, Gerry, maybe you can give us an example of a program that is eligible, and perhaps walk or run through the steps that they would need to take.

Gerry Moore:
Some of the first kind of eligible programs we see -- and we're not so restrictive on what type of upgrades, as I mentioned, you choose to do, and we're impressed by some of the borrowers and some of the ideas they have. But I've got to say, some of the first through are really like weatherization applications, they are upgrades to HVAC, ground source heat pumps. Some of them have a vision for small-scale renewables. But those are really, I'd say, weatherization and such, that's kind of plain vanilla. And that's what we see right now. But we have a lot of conversations going on with potential borrowers that are way beyond that. And that's why we try to keep that reg very flexible. So this reg is very much like our standard loan program. So if you are a borrower of RUS, this is the same process you've ever been through, except, as I mentioned, there's a business plan, a quality assurance plan that you'll have to provide. But other than that, it's very similar to the standard loan program that they're familiar with. Again, these energy efficiency upgrades are focused behind this consumer meter, however, energy efficiency for the utility systems is also enabled, and always has been around a long time, from our standard loan program. So we've got you covered either way, whether it's behind the meter or not.

Odette Mucha:
OK, thanks, Gerry. A couple more questions have come in. One person asked, which utilities have been approved for the EECLP, if you can tell us that. And then someone else also just asked, why have only two loan applications been received so far this year?

Gerry Moore:
Well, I wouldn't say two loan applications have been received. That's not the case. We have the first two approved, and there are some already in the queue. Some of the borrowers were coming to us just saying, hey, let me throw some ideas and plans at you and we'll go back and forth. So there's a number in the queue. I would also mention that I think co-ops tend to -- the cooperatives who have been coming in, they tend to -- watch and wait to see who's doing what, and then they'll follow that afterward. But the -- I think it's common knowledge about who's gone through the process already, and that would be Roanoke in North Carolina, and then North Arkansas in Arkansas. They have really different approaches, really different plans, but they were good, and we're very proud of them. And again, also, there are others in the queue. So they're going to move slow. This is brand-new. But they'll pick up steam. And we are considering some other types of entities. And they are more complicated, so we have to look at bigger scale, which is a good thing.

Odette Mucha:
OK, great. Another question came in on interest rates. And they're wondering if RUS offers any flexibility on interest rate add-on.

Gerry Moore:
Yea, so we had to try to decide what interest rate to put on top of the cost of money from RUS. And really, I think that was done to drive the cost down to the ultimate consumer. That's the people we really serve, and we want to make sure that it's really key for them. But we certainly don't want to disable an energy efficiency program. So there's possibility of waiver of that 1.5 percent, but it's on a case-by-case basis, and it has to be justified. It really has to come to us with an explanation why you can't see that happening. So the administrator can make a determination. He has to have something to look at and say, this is what they are up against, and then he'll make a determination on a case-by-case basis.

Odette Mucha:
OK. A couple more questions have come in on eligible projects. They're wondering about LED streetlight conversion -- whether that's eligible -- as well as a small hydro project.

Gerry Moore:
Well, we'd need more detail, but the LED light conversion is a really good application. You know, streetlights, especially, it's not just efficiency savings. Maybe I shouldn't say this, but you're also getting maintenance savings, right? You don't have to change those bulbs so often. But if it's an eligible borrower and an efficiency purpose, I don't see why not. And you talk about small- scale hydro, well, it's a renewable. I'd really have to hear the application. But I don't see any reason why that would be excluded. Specifically, renewables are enabled here. So we've haven't been talking to anybody about small-scale hydro, but we're certainly open to it.

Odette Mucha:
OK. Someone else asked, how onerous is the monitoring and verification for this program?

Gerry Moore:
Well, I mean, I can give you my perspective. That was, of course, not designed to be onerous, right? There are some best practices out there, and I think -- I could stand to be corrected -- I think based on the size of the co-op, let's say in the case of a co-op, I think on the size of the co-op, the size of their program, there's pretty straightforward ways of calculating savings there. For a more sophisticated program, some of the tools you saw would probably be used. I mean, there's flexibility there. Keep in mind, though, that sometimes using those monitoring and verification -- sometimes getting that kind of plan together will serve you in the future or could serve you in the future, beyond this program, to be able to use a standardized approach to track efficiency savings. I think that's going to come in handy, especially for GNTs and entities like that. But for the smaller programs, it's pretty flexible. We know what you're up against, I think.

Odette Mucha:
OK. Another question is, is there comparable data on the investment cost per kilowatt-hour savings? Maybe that's a question for Eric?

Eric Cutter:
So the resources really vary around the country. In Calfornia and some states, there is a common database of energy efficiency measures, definitions, that are made publicly available, and so all the programs are more or less required to use these standardized definitions of a measure. Like I said, it would be for a refrigerator, how much it costs, how much energy it saves, how much energy it saves on heat, how long it lasts. The basic definitions, and the load change of a measure. And other areas where there aren't a ready database, there are sometimes databases in other states that have a similar climate. The key is, if it has a fairly similar climate to yours, again, you get pretty close, so let's say, Illinois has its own database of measures, other co-ops or utilities in the mid-central or Midwest could reasonably use those measures in their service territory. And just poking around on the Internet you can sometimes find these databases. I know there's one in California. There's one in Ontario. I'm not sure of all the other states that have them. Outside of that, there are firms -- not E3, but other firms -- who develop software or measure data that can provide that. Energy Orbit is a firm. DS Moore is a tool that has measures in it already. And I can provide links to some of those resources. That can be shared. And then often, there will be other organizations that provide reports or work papers or studies that provide cost and savings data that can be readily used and very easily could define a measure for your program that you want to implement.

Michael Li:
So this is Mike at DOE. Let me just jump in and add to what Eric said. So depending on sort of the exact question, let me just add two more things. We just had a presentation on what we call measured cost studies, which is what is the incremental cost of the efficient appliance or piece of equipment. And if you go to our SEE Action website, you can see that presentation that was given. There was two presentations, one by I-Tron for California, and one by Navigant that was given that covered the northeast states. Another thing that I'll just point out, too, is that the Lawrence Berkeley National Lab has released a couple papers recently about basically how much does energy efficiency cost. And so that might also be a useful resource, as well. So if you can't find those links, go ahead and just email Odette, and we'll make sure that you get that.

Eric Cutter:
Another really, really good starting point is ACEEE. It has a whole bunch of public reports and documents that are very helpful in this regard, as well. That's the American Council for an Energy Efficient Economy. ACEEE. A search on that will get you a bunch of good resources.

Odette Mucha:
OK, great. We have time for just a few more questions. Quick one: Will RUS be making submitted business plans available to the public?

Gerry Moore:
Well, that is, I think -- the first two borrowers wanted to do that. So they wanted to make them available. But what it takes is a little bit of processing, right? It has a lot of their specific information I don't think we want to share. It's going to be a little process to go through that and just scrub it and make sure that it's accessible and then agreed-upon. But then that is the intent of the first two leaders who went through here, is to say, here, let me share this, and then make it easier for others who follow. So we will get that. And I've got to make a note to address that, because we do have their plans now. They have gone through successfully, and we've just got to figure a way of scrubbing them of specific details so you can see the overall plan. And then it's a great guide, and I think, in one case there's a very sensitive plan, and in the other case, it wasn't. so much. It all depends on the program. And it has the ingredients necessary for a good business plan. I think it would be a great model.

Odette Mucha:
OK. And we have a couple clarifying questions. What do you mean by load shape?

Eric Cutter:
That's a good question. I've thrown that around a little too loosely. It's the time of the year, time of the day, that the energy efficiency device is reducing energy consumption. So the key distinction is a refrigerator is on and off, cycling throughout the day, day and night, so it has a very flat load shape, which will correspond with one set of avoided costs, as compared to an air conditioner or a lighting measure, which will have most of their energy use and therefore their energy savings, in the case of the air conditioner, will almost all be on-peak in California, anyway, and in the utilities with summer cooling loads, the shape of the savings will be concentrated in an on-peak period. And lighting will be the reverse. The shape, the time of the savings, will be concentrated in an off-peak or nighttime period. And so in general, we use California as an example -- the air conditioning load shape provides higher dollar value benefit for the same kilowatt-hour savings, as compared to a refrigerator. In winter peaking states, your heating measures will have a higher savings than a refrigerator, for example. So that's part of the measure definition, is not only just how much energy it saves, but the timing over the day and year when it saves. And those can get very complicated, but like I said, you really do get 80 percent of the way there, if not 90, with just four time of use periods. So if you can have summer and winter and on-peak and off-peak, or high-load and low- load, you really show a meaningful difference in your benefits for air conditioning and heating, lighting, and refrigerator, which is what helps you decide for your particular area where you're getting the biggest bang for your buck and how much more is an air conditioner measure worth than a refrigerator measure, for example.

Odette Mucha:
OK, great. I think that might be all the time we have for questions. So apologies to those whose questions we weren't able to answer right now. But feel free to email any of us from this presentation. You can reach me at any time. Our email here is se, which stands for Stakeholder Engagement, so se@ee.doe.gov. Feel free to ask us the rest of your questions that might come up.

Next slide:
So thanks again to everyone who participated in our webinar. Gerry and Eric and Mike, we really appreciate hearing from you today. And for all of you participants, thanks for your time We hope you'll join us for the rest of this series, and just a reminder, you need to register for each webinar. So please click the links, and we'll send out the slides from today's webinar via email. Thanks again, everyone, and we hope you have a great rest of your day.