>>Male: Welcome to our webinar. Today we are discussing an exciting new DOE initiative: the inclusion of non-energy impacts in the Weatherization Assistance Program. Let' get started. 

Just what are non-energy impacts? Well, a non-energy impact, or NEI as we'll refer to them, is an additional benefit for participants in energy efficiency programs beyond the energy cost savings. So, these are additional benefits that are not included in the actual energy cost savings at the end of the day. Some of those benefits might be reduced emissions, water savings, comfort or productivity improvements, or just reduced risk of utility service disruptions or price spikes. NEIs are sometimes referred to a non-energy benefits, or NEBs, but for consistency NEI will be the terminology that we use in the Weatherization Assistance Program.

Prior to this guidance, non-energy impacts resulting from weatherization have been very challenging to quantify and monetize within the boundaries of the regulations. However, in fiscal year 2020 Congress amended the actual statue for the WAP and directed the program to consider non-energy impacts from weatherization. In response to this, DOE has worked with the weatherization network, its stakeholders, and national laboratories to analyze exactly how WAP grantees can best consider NEIs using their currently approved energy audit tool. That led to the release of WPN 22-10: Including Non-Energy Impacts in WAP. That was issued on October the 21st of 2020 and provides guidance on the inclusion of NEI in the energy audit process discussed in WPN 19-4.

DOE wants to make it clear that the adoption of NEI by any of the grantees is purely optional at this point. At this time, DOE is providing two optional NEI allowances for grantees that with to supplement their existing energy audit approval. Note that these will only be approved for grantees who have a current and unexpired energy audit approval. And again, these are optional. Grantees do not have to adopt NEIs at this time. However, the adoption of NEIs certainly have benefits. It increases the cost effectiveness of WAP measures, which means that we can get more measures installed based on the savings-to-cost investment ratio, it addresses long-term impacts of carbon emissions, and it helps to address impacts of drought and domestic water availability. And so, you should certainly consider if you can add these NEIs to your program today.

For this initial foray into NEI, the Weatherization Assistance Program recommends including the following two NEIs. First, the social cost of carbon, which is established using the national emissions profile for each fuel type. Secondarily, water usage reduction. This would also be based upon site-specific utility costs for water savings. 

While DOE is providing a methodology for the inclusion of these two NEIs, grantees may request the inclusion of other NEIs using the procedures outlined in WPN 19-4 Attachment 6 related special materials approval. Grantee submissions will be reviewed by DOE to determine if they be more broadly applied to the program as a whole.

Let's now look more closely at the social cost of carbon. Many people may wonder what is the social cost of carbon? It is the monetary value of the net harm to society associated with adding carbon to the atmosphere each year. The values provided in WPN 22-10 were established by the Interagency Working Group on the Social Cost of Greenhouse Gases. The implementation method that DOE has chosen is to take these values and extrapolate them into fuel price modifiers, which are then added to the site-specific fuel cost when analyzing the measure's cost effectiveness in the energy audit tool. The specific modifier values are detailed in Attachment 1 of this WPN.

The attachment provides two options for the inclusion of this social cost of carbon in your energy audit tool. There are two options because some energy audit tools can only accept one value for the fuel cost modifier, meaning it only has one input for the cost of fuel. Option two, however, is recommended for grantees using an energy audit tool that can accept different fuel price modifiers for each year. This allows the tool to analyze the social cost of carbon over the entire lifetime of the WAP measure utilizing the increased cost of carbon over time. These are very similar to fuel price indices that are used in Weatherization Assistant as well as some other tools. 

Grantees who use Weatherization Assistant version 8.9 – that's the desktop version – may implement either option but you will need some additional technical assistance if you choose option two. Oak Ridge National Laboratories will facilitate the use of option two in the desktop version of Weatherization Assistant for a short period of time. However, once grantees switch over to Weatherization Assistant version 10, the Web-based version, this software will include the default values that allow for full inclusion of long-term social cost of carbon.

This guidance allows two options for choosing the electric emissions modifier. The first option allows you to use the national average values provided in Attachment 1 for all fuel types, including electricity.  Option two, however, does allow you to use national averages for onsite combustion provided in Attachment 1. However, allow for an electric emissions modifier calculated specifically for the region or state that the grantee serves. The purpose of this is to acknowledge that the emissions related to electricity production varies greatly from region to region and state to state. If a grantee elects to choose their own electric emissions modifier, then the following guidelines must apply to how that electric emissions modifier is calculated. 

Grantees must use binding electrical sector policies to account for projected reductions in electricity emission rates, and they must use the three percent discount rate when predicting future emissions cost savings. Any grantee who chooses to produce their own electric emissions modifier should consult with their project officer prior to submission. For additional information on how an electric emissions profile may be created for a specific region or state, please see the interagency working group on the social cost of greenhouse gases report that is linked in the WPN. 

Any grantee that wishes to implement the social cost of carbon in its program must submit the following information to its DOE technical project officer. First, a written request to include the social cost of carbon in the fuel price used for energy modeling. Two, the exact fuel price modifier to be used for each fuel analyzed by the grantee. Three, a sample energy cost library which includes the fuel price modifier selected by the grantee and that will be provided to the subgrantees for implementation. Simple screenshots are acceptable for this purpose. Four, an updated energy audit procedure that provides any additional direction needed to direct the energy audit process and the site-specific energy modeling to include the social cost of carbon. For some grantees there be no change in operations, just simply an update to the fuel price library. However, some audit tools may require additional energy audit processes to be put in place to use the social cost of carbon adequately. Once a grantee receives written approval by means of an updated energy audit memo, then it may implement social costs of carbon in its program and include them in the cost savings evaluation for each project.

As DOE has analyzed the inclusion of the social cost of carbon in the energy audit analysis, it has identified that additional safeguards were needed to consider specifically when fuel switching is applied to a home. Therefore, any grantee that currently has a written DOE approval to administer fuel switching at the grantee level and wishes to adopt the inclusion of the social cost of carbon into these calculations must provide some additional supporting information with their request. First, an updated written energy audit policy that outlines how it will ensure that fuel switching performed in a home where the social cost of carbon is included in the fuel price does not result in a net increase in out-of-pocket energy expense for the client. While switching to less carbon-intense energy systems is certainly desirable, the goal of the Weatherization Program is to lower the utility costs for low-income clients. Therefore, it is important that we do not increase their energy expense by fuel switching.

The policy update that the grantee must provide may include something such as an analysis of the heating/cooling annual cost without the inclusion of social cost of carbon in the fuel prices and including any cooling costs that did not previously exist in the home because we were switching to perhaps a heat pump over a traditional furnace system. Obviously, there can be many variations of fuel switching and as a grantee, if you have questions, we encourage you to reach out to your project officer to determine how these rules apply to your program.

Now, I'll discuss the second NEI the DOE has provided the methodology for. This is water usage reduction. Water-saving devices such as low-flow aerators or shower heads are already common measures for many grantees. Typically, these are installed as general heat waste measures, which do not have to be included in the energy audit, or as energy conservation measures that are included in the energy audit; however, using only the hot water use reduction in the cost effectiveness calculation. In other words, not including the actual cost of the water but only the energy used to heat the water. DOE is providing water usage reduction calculations and encouraging grantees to include the price of the actual water in the cost effectiveness calculations. This would include both water and sewer costs for clients that have water and sewer utilities.

To ease the implementation of water reduction measures, the DOE has developed a spreadsheet calculator that is available on the WPN 22-10 webpage, and it will help to determine the cost effectiveness of water saving devices that accounts for both hot and cold water usage. The values generated using this calculator can be included in the energy modeling of the home and in the package of measures installed by DOE WAP. The spreadsheet calculator does provide a methodology for data entry into many tools; however, if your tool needs additional assistance, please contact your tools developer and have a discussion with your DOE project officer. 

Grantees should be aware that water-saving measures such as faucet aerators, showerheads, and toilets are not currently in the approved materials list in 10 CFR 440 Appendix A. For that reason, to install any of these measures as energy conservation measures, not general heat waste, then grantees must submit a special materials request form as outlined in WPN 19-4 for any of these water-saving measures to be analyzed as energy conservation measures. If you have questions about how to fill this out or the applicability of this request, again, please contact your project officer.

For a grantee to adopt water usage reduction measures, they must submit the following to their technical project officer: (1) a special materials request form contained in WPN 19-4 for each specific water savings measure – aerators, showerheads, toilets, et cetera. (2) Grantees must provide a sample energy model of each item using the grantee's DOE-approved audit tool that demonstrates the cost effectiveness valuation of the measure that is compliant with the energy audit regulations contained in 10 CFR 440.21 (3) The written procedures that are provided to direct the energy audit process in the initial audit, evaluation, energy modeling, and final inspection of each of these measures. Once a grantee receives written approval by means of an updated energy audit approval memo, then ty may begin implementing these measures as energy conservation measures for their program.

This revised program notice is the first step to considering NEIs associated with the social cost of carbon and water use reduction in the energy audit tool. DOE will continue to consider other methods for valuing household health and safety benefits and other NEIs resulting from weatherization and will publish addition guidance as it's available. Weatherization Assistance Program grantees are encouraged to pursue DOE approval of other NEIs by submitting requests directly to the appropriate DOE project officer for review and approval.

The inclusion of non-energy impacts in the Weatherization Program is a responsive step to the needs of the country at this time. For additional questions and for information related to these program notices and memorandums, we encourage you to visit our website at DOE.gov. If you have additional questions, please contact your DOE WAP project officer. 

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