FEI-FEVI 2010 EEC Report filed March 31, 2011 - FortisBC

FORTISBC ENERGY INC. AND FORTISBC ENERGY (VANCOUVER ISLAND) INC.
2010 ENERGY EFFICIENCY AND CONSERVATION ANNUAL REPORT
AFUE rating of 90 percent. As in-stock furnaces manufactured before the cut-off date can still
be retailed, customers continue have a mid-efficiency choice.
Although these furnace regulations are in place, according to the Companies’ 2008 Residential
End Use Survey (“REUS”), almost 80 percent of the furnaces in the Companies’ service
territories were standard and mid-efficiency models. This represents a very significant area of
potential for natural gas savings. Conventional DSM protocols only allow utilities to incent
savings based on the regulated baseline. Also, utilities can only count savings beyond the
regulated baseline that are generated as a result of the difference in efficiency between the insitu
technology and the replacement technology for those years that replacement is being
moved up. For example, conventional DSM protocols would indicate that should a program
incent a customer to early-replace an existing 80 percent efficient furnace five years before the
end of its life with a 95 percent efficient furnace, the utility would only be able to count the
energy savings from 80 percent to 95 percent efficiency for the five years of life remaining on
the furnace. The rest of the savings would be calculated based on a change from 90 percent to
95 percent since 90 percent is the regulated minimum efficiency level. These conventional DSM
protocols significantly limit a utility’s ability to offer effective incentives on products with
regulated minimum efficiency levels, as the energy savings on which incentives are based are
small.
This is one of the reasons the Companies have under spent compared to approved expenditure
levels: the residential furnace upgrade program had been a flagship program for FEI prior to the
introduction of the 90 percent minimum efficiency standard. Yet limiting a utility’s ability to offer
effective incentives ignores marketplace realities. For example, data from the Companies’ 2008
REUS indicates some customers are keeping their furnaces well beyond the end of equipment
life – in some cases for 30 to 40 years. Not only do these older furnaces offer significant energy
savings opportunities when replaced with higher efficiency models, they pose possible safety
and human health hazards due to the potential for component failure that should be addressed,
preferably through an incentive program to encourage customers to replace these older,
inefficient units (i.e. a furnace scrap-it program). It is the Companies’ intention to pursue such a
program as part of the suite of EEC offerings for 2012 and 2013 that will be brought forward in
the Revenue Requirements Application to be filed in May 2011.
Monitoring of trends in this area was considered a high priority as there were new technologies
introduced that affected adoption, trades training, new installation requirements, and pricing.
There were also unintended consequences from new venting requirements. For instance, since
standard efficiency gas-fired furnaces and boilers usually share a metal vent with the gas-fired
hot water tank, one unintended consequence of the new venting requirements was a trend
towards electric hot water tanks in new construction. This is because new high efficiency
condensing furnaces and boilers require a dedicated vent, quite often through the side wall of
the building. This means the entire cost of a metal vent up through the roof is now associated
with the gas-fired hot water tank only, instead of being shared by the furnace and hot water
tank, which can discourage the installation of an energy efficient gas-fired hot water tank.
SECTION 11: ENABLING ACTIVITIES Page 233