Non-Energy Benefits from Residential Energy Efficiency Programs

1. Non-Energy Benefits from Residential Energy Efficiency Programs David Carroll and Jackie Berger APPRISE ACI National Conference - April 2016

2. NON-ENERGY BENEFITS FRAMEWORK 2

3. Important Concepts • Types of Non-Energy Benefits • Household Level with benefits to Household • Household Level with benefits to Ratepayer/Taxpayer • Societal with benefits to general population • Measurement Framework • Baseline Conditions • Gross Impacts • Net Impacts 3

4. Direct Benefitsto Households Our primary concern is how these program directly affect the households served by the programs. • Examples of Benefits Delivered to Households • Equipment replacement results in reduced need for equipment maintenance • Improvements in indoor air quality lead to reduction in health problems • Reductions in energy costs lead to more affordable bills and reduced bill payment transactions costs 4

5. Benefits to Ratepayersand/or Taxpayers However, sometimes household level benefits also result in benefits to ratepayers and/or taxpayers. • Examples of Ratepayer/Taxpayer Benefits • Sometimes improvements in health of program participants leads to reductions in Medicaid or Medicare costs that accrue to taxpayers • Sometimes improvements in household payment patterns lead to reductions in the cost of bill payment subsidy programs and/or collections write-offs 5

6. Benefits to Society And, it is important to consider program non-energy benefits that accrue to ALL members of society. • Examples of Societal Benefits • Reductions in emissions of GHG and criteria air pollutants have broad-based impacts for society. • Moving from resource extraction and power generation to improvement of the housing stock and energy using equipment can yield net economic benefits, particularly at the state or local level. 6

7. Measurement Framework Measurement of household non-energy benefits must be part of program design, implementation, and data tracking. • Program Target – Define what non-energy benefits this program will deliver to households. • Baseline Conditions – Document the status of the household/housing unit prior to service delivery. • Gross Impacts – Measure the extent to which the program actually changes the household/housing unit status. • Net Impacts – Compare changes for program participants to comparison group to measure net impacts. 7

8. NATIONAL WAP EVALUATION – MEASUREMENT AND MONETIZATION OF HEALTH BENEFITS 8

9. Measurement Framework The National WAP Evaluation conducted pre/post surveys that measured housing unit and health status for program participants and a comparison group prior to and at least one year after weatherization. • Treatment Group – Households scheduled for a WAP audit. • Comparison Group –Treated by WAP one year prior to survey. • Baseline Survey – Conducted in the summer of 2011 and collected client self-reports of housing unit conditions and health status. • Follow-Up Survey – Conducted in the summer of 2013 and used the same survey questions on housing unit conditions and health status. • Analysis – Restricted to homes that were weatherized and still occupying weatherized home in 2013. Compared changes for Treatment Group to changes for Comparison Group. 9

10. How Does WX Affect Health Status? It is important to consider the specific mechanism through which the program is likely to improve health in order to effectively document program impacts. • Common Health Problem – NHIS shows 8% of low-income households have an adult with asthma and 13% have a child with asthma. • Weatherization Impact – By reducing infiltration, WX can reduce the level of pollen, dust, and insects in the home. By increasing ventilation, WX can reduce the amount of mold and mildew in the home. These are all asthma triggers. • Occupant Survey Measurement – The Occupant Survey measured both client perceptions of housing unit status and client self-reports of health status. 10

11. Sample Results – Housing UnitConditions 11

12. Sample Results – Status of Household Members 12

13. How Can Health Status be Tracked and Monetized? • Preferred Methodology – Integration of health records allows for tracking of treatments and health care costs. However, there are significant barriers to overcome to use those data. • WAP Evaluation Methodology – Used national medical expenditure data to develop estimates for the average cost of emergency room visits and hospital stays. 13

14. Successes from NationalWAP Evaluation OccupantSurvey Analysis • Measurement of Housing Unit Changes – The survey documented that some low-income housing units have problems related to high infiltration rates and improper moisture control, and that post-weatherization some of those clients perceived that there were improvements in the housing units with respect to these problems. • Measurement of Household Health Status Changes – The survey documented that some low-income households had the rate of respiratory problems reduced as a result of weatherization. • Monetization of Household Health Benefits – Using medical expenditure data, the evaluation was able to develop a reasonable quantitative measurement of the value of health impacts. 14

15. Limitations of NationalWAP Evaluation OccupantSurvey Analysis • Sample Size – Survey was a comprehensive study of all client benefits from weatherization. A study focused on households with respiratory problems would have larger sample sizes and better measurements. • Measurement Procedures – The survey relied on client self-reports. Other measurement procedures, including access to medical records would likely improve the quality of data. • Linkage to Weatherization Outcomes – The study was not able to link housing unit service delivery records to individual cases and was not able to compare WX outcomes to health impacts. • Monetization – The monetization procedure had to rely on average expenditure data when actual health data would be more compelling. 15

16. Lessons from NationalWAP Evaluation OccupantSurvey Analysis • Feasibility – It is possible to measure and monetize household level non-energy benefits. These procedures are not necessarily any more complex or expensive than energy measurement and verification procedures. However, measurement procedures generally require up front planning rather than retrospective evaluation. • Targeting – It is important to focus measurement on those benefits with the greatest value relative to the cost of measurement. A program that targets renters might focus on reductions in mobility costs. A program that targets homeowners might focus on reductions in equipment maintenance costs. A program like WAP that includes indoor air quality concerns might focus on documenting those benefits. 16

17. NATIONAL WAP EVALUATION – MEASUREMENT AND MONETIZATION OF SOCIETAL BENEFITS 17

18. Measurement Framework:Reductions in Emissions The WAP Evaluation transformed state-level energy savings into state-level reductions in emissions and then monetized those reductions. • Energy Saving – The WAP Evaluation estimated the energy savings for each type of energy (e.g. natural gas, electricity) for each state. • Emissions Reductions – It used EPA procedures to estimate the reductions in GHG and criteria air pollutants. • GHG Monetization – It monetized GHG reductions using OMB specified values for GHG and GHG equivalents. • Criteria Air Pollutant Monetization – It monetized criteria air pollutant reductions using the APEEP model. [This method was recommended by the National Research Council in it s 2010 report.] 18

19. Measurement Framework:Economic Benefits The WAP Evaluation conducted a REMI analysis to assess program economic impacts. • REMI Model – The REMI model was implemented to assess whether the WAP program had dynamic economic impacts. The analysis did not find significant net impacts. The analyst suggested that the size of the program relative to the size of the economy is likely to limit measurement of such impacts. • REMI Model vs. Regional I/O Models – More traditional impact analysis uses I/O models. Generally, those models tend to show a net economic benefit because WX/Home Performance is more labor intensive than energy resource extraction and electric power generation. This is particularly true for those jurisdictions that import most of their energy resources. 19

20. New Jersey Natural Gas SAVEGREEN PROGRAMS 20

21. SAVEGREEN ProgramsGoals 21

22. SAVEGREEN ProgramsOverview 22

23. ENERGY IMPACTS 23

24. Rebate ImpactNatural Gas Savings 24

25. HPwES ImpactNatural Gas Savings **Denotes significance at the 99 percent level. 25

26. NON-ENERGY BENEFITS 26

27. Non-Energy Benefits 27

28. Environmental BenefitsMethodology 28

29. Environmental BenefitsAvoided Emissions 29

30. Environmental BenefitsValue of Avoided Emissions Monetary values are given in 2015 dollars Avoided emissions for CO2-eq are in metric tons. Avoided emissions for all other air pollutants are in short tons 30

31. Environmental BenefitsValue of Avoided Emissions Monetary values in 2015 dollars. Lifetime benefits measured over 15-year measure life. Avoided emissions for CO2-eq are in metric tons. Avoided emissions for all other air pollutants are in short tons 31

32. Economic BenefitsTheory 32

33. Economic BenefitsMethodology • Regional Input-Output Modeling System (RIMS) • Produced by Bureau of Economic Analysis (BEA) Output Change = Expenditures * (Output Multiplier with Program – Output Multiplier Without Program) Employment Change = (1/$1,000,000) * Expenditures * (Employment Multiplier with Program – Employment Multiplier Without Program) 33

34. Economic BenefitsSources of Economic Impact Estimates based on 2013 expenditures and participants’ savings. 34

35. Economic BenefitsOutput Multipliers 35

36. Economic BenefitsEmployment Multipliers 36

37. Economic BenefitsOutput Impact 37

38. Economic BenefitsEmployment Impact 38

39. Economic BenefitsOutput and Employment 39

40. Health & Safety BenefitsMethodology 40

41. Health & SafetyIssues Identified 41

42. Health & Safety BenefitsParticipants with Any Issue 42

43. SUMMARY 43

44. Non-Energy Benefits • Non-Energy Benefits accrue to households, ratepayers/taxpayers, and society. • Measurement and monetization is feasible and practical, but requires planning and investment of evaluation resources. • As is true with measurement and verification of energy benefits, it is important to focus on those benefits with the greatest impact on program effectiveness and cost-effectiveness. 44

45. Contact Information 45