Discussion
of Issues
Issue 1:
Should the Companies’ proposed modifications to existing
residential gas conservation programs and its proposed addition of a new
conservation program be approved?
Recommendation:
Yes. Staff recommends that
the Companies’ residential program modifications be approved as they further
the goals of FEECA. The administrative changes to the residential survey
program Efficiency First and the addition of the low-income program Efficiency
for All will educate customers and provide resources to improve energy
efficiency, while the rebates for the residential appliance programs will
encourage direct efficiency measures. (Sanchez, Willis)
Staff Analysis:
In its April 16, 2026,
petition, FPUC and FCG requested approval for: (1) modification and renaming of
their existing residential customer energy survey programs to Efficiency First;
(2) a new residential low income program, Efficiency for All; (3) and
modifications to their existing residential customer rebates for the New
Construction, Existing Customer Retention, and Electric-to-Gas Replacement
(Retrofit) programs. On July 24, 2026, the Companies filed a second revised
petition which updated values in the cost-effectiveness calculations. Per the petitions, the Companies proposed
program modifications are based upon shifting market conditions, equipment
costs, and efficiency standards. In addition, standardizing the programs
amongst the Companies allows for administrative efficiency.
Although FCG and
FPUC are not subject to FEECA, both voluntarily offer gas programs under FEECA.
Therefore, pursuant to Rule 25-17.015, Florida Administrative Code (F.A.C.),
the Companies may recover the costs associated with implementing approved
programs.
Program Descriptions
Efficiency First Program
The Companies’ existing
Residential Customer Survey program was intended to provide customers with a
cost-free energy audit in accordance with Rule 25-17.003, F.A.C. Through this
program, participating customers may have their residence surveyed by utility
personnel or an approved contractor who will identify personalized energy
saving measures for the customer’s needs. The Efficiency First program modifies
the Residential Customer Survey program by adopting an online self-service
model that allows customers the option to complete an online survey that
assesses energy usage and provides personalized recommendations for energy
saving improvements rather than require an in-home survey. Upon completion of
the survey, customers would be provided a weatherization kit for self-installation
and a smart home energy kit upon verification of the previous kit’s
installation to further incentivize energy saving measures. Weatherization kits
include weatherization and water conservation measures such as a
high-efficiency showerhead, faucet aerators, pipe insulation, and foam
weatherstripping. The smart home energy kits provide additional conservation
measures such as a smart thermostat, a five-minute shower timer, and a hot
water gauge card. The Companies provided a program participation forecast,
anticipating approximately 150 participating customers by the end of 2027, with
an additional 50 customers annually as program awareness and customer
engagement increases. These modifications mirror those previously approved for FPUC’s
electric Efficiency First Program.
Staff believes
that the Efficiency First program furthers the goals of FEECA. Pursuant to
Section 366.82, F. S., and Rule 25-17.003, F.A.C., utilities are required to
offer energy audits to residential customers, which the Companies will conduct
through the Efficiency First Program. FEECA emphasizes reducing the growth rate
of peak demand and electricity usage and increasing the efficiency of the
production and use of electricity and natural gas, and customers that participate in the program benefit through increased
knowledge of conservation opportunities and possible rebates on energy saving
equipment, and direct benefits from energy-saving equipment provided in the
weatherization kits, resulting in potential bill reduction.
Efficiency
for All Program
The proposed Efficiency
for All program is designed to deliver weatherization measures to households
that lack the financial means to participate in other programs. Similar to the
Efficiency First program, eligible customers enroll by completing an online
survey and, upon completion, are provided a weatherization kit and smart home
energy kit. Unlike the Efficiency First program, Efficiency for All
participants will have provided kits installed by contractors in
neighborhood-based rollouts. Program participation is limited to low-income
housing developments, multifamily buildings, or similar residential complexes,
with administrative approval from building owners, with priority given to
communities with the greatest need and readiness to participate. The Companies
provided a program participation forecast, anticipating approximately 100
participating customers by the end of 2027, with an additional 50 customers
annually as program awareness and customer engagement increases. The new
program for the Companies mirrors the previously approved Efficiency First program
for FPUC’s electric.
Staff believes
that the Efficiency for All program furthers the goals of FEECA. Low-income
customer participation in energy conservation programs, such as the Efficiency
for All program, furthers the intent of FEECA by encouraging potential demand
and energy reduction in Florida. Customers that participate in the program
benefit through increased knowledge of conservation opportunities and possible
rebates on energy saving equipment, and direct benefits from energy-saving
equipment provided in the weatherization kits, resulting in potential bill
reduction.
Residential
Rebate Programs
The Companies
also requested to modify three residential conservation rebate programs, which
will now be known as New Construction, Existing Customer Retention, and
Electric-to-Gas Replacement (Retrofit). These replace the Full House
Residential New Construction program, Residential Appliance Retention program,
and Residential Appliance Replacement program, which were last changed in 2010. The Companies’ proposed modifications to
increase rebates for appliances are based upon current market conditions.
The Companies
proposed modifying their residential conservation strategies, which are
centered around the New Construction, Existing Customer Retention, and
Electric-to-Gas Replacement (Retrofit) rebate programs. The Companies indicate:
(1) the New Construction rebates encourage gas adoption from partnerships with
builders; (2) the Retention rebates reward customers who upgrade to
high-efficiency or ENERGY STAR-rated systems; and (3) the Replacement/Retrofit
rebates offset electric-to-gas conversion costs. Table 1-1 shows the proposed
changes to the New Construction, Retention, and Retrofit rebate programs,
respectively.
Table 1-1
Residential Rebate Program Changes
|
Appliance/Program
|
Current
Rebate ($)
|
Proposed
Rebate ($)
|
Difference
($)
|
|
Residential New Construction
|
|
Water Heating –
Tankless
|
$550
|
$850
|
$300
|
|
Water Heating –
Tank
|
$350
|
$700
|
$350
|
|
Water Heating –
ENERGY STAR/High-Efficiency
|
$400
|
$750
|
$350
|
|
Furnace
|
$500
|
$700
|
$200
|
|
Cooking Equipment
|
$150
|
$315
|
$165
|
|
Clothes Dryer
|
$100
|
$200
|
$100
|
|
Residential Existing Customer Retention
|
|
Water Heating –
Tankless
|
$550
|
$600
|
$50
|
|
Water Heating –
Tank
|
$350
|
$400
|
$50
|
|
Water Heating –
ENERGY STAR/High-Efficiency
|
$400
|
$450
|
$50
|
|
Furnace
|
$500
|
$550
|
$50
|
|
Cooking Equipment
|
$100
|
$315
|
$215
|
|
Clothes Dryer
|
$100
|
$175
|
$75
|
|
Residential Electric-to-Gas Replacement
|
|
Water Heating –
Tankless
|
$675
|
$750
|
$75
|
|
Water Heating –
Tank
|
$500
|
$600
|
$100
|
|
Water Heating –
ENERGY STAR/High-Efficiency
|
$550
|
$700
|
$150
|
|
Furnace
|
$725
|
$725
|
$0-
|
|
Cooking Equipment
|
$200
|
$315
|
$115
|
|
Clothes Dryer
|
$150
|
$200
|
$50
|
Source: Document No. 04651-2026.
The Companies
presented a program participation forecast for the expected participation
trends across the New Construction, Retention, and Replacement/Retrofit rebate
programs. By the end of 2027, the Companies anticipate approximately 11,420
participants in the New Construction program, 3,940 participants in the
Existing Customer Retention program, and 840 participants in the
Electric-to-Gas Replacement program. The Companies then expect participation in
each rebate program to grow at a 1.5 percent annual growth rate.
One objective of
FEECA is to facilitate the Commission’s consideration of the need for
incentives to promote customer-owned energy efficiency when establishing energy
conservation goals. Although FCG and FPUC are not subject to FEECA, their
residential conservation rebate programs provide direct energy and cost savings
associated with the installation of more efficient natural gas appliances.
Cost-Effectiveness
Review
As required by
Rule 25-17.009, F.A.C., the Companies provided a cost-effective analysis of the
proposed program using the Gas Rate Impact Measure (G-RIM) Test and
Participants Tests. These tests consist of the program benefits divided by the
program costs, so that programs are determined to be cost-effective if the
result of the test is a ratio greater than 1.00. Staff reviewed the
cost-effectiveness analysis conducted for each program and found that the data
sources were reasonable, and the tests were conducted as instructed by Rule
25-17.009, F.A.C.
Efficiency
First and Efficiency for All Programs
The Companies
selected AM Conservation Group to supply the weatherization and smart home
energy kits for both the Efficiency First and Efficiency for All programs to
standardize kit contents and costs. Franklin Energy Services was selected to
coordinate customer enrollment, verification of customer self-installation, and
participation reporting for the Efficiency First program based on the existing
contract supporting the 2025 electric conservation portfolio. The Efficiency
for All program will utilize qualified third-party contractors for verification
and installation service for eligible low-income participants.
Based on the
Companies’ analysis, both the Efficiency First program and the Efficiency for
All program pass the Participants Test because both the weatherization kit and
smart home energy kit are provided to eligible customers at no cost. However,
neither program passes the G-RIM test. Staff notes these results are similar to
FPUC’s previously approved electric Efficiency First and Efficiency for All
programs.
As described
previously, the Efficiency First program and the Efficiency for All program
serve as customer education and engagement programs rather than traditional
load reduction programs. Therefore, staff believes that the Efficiency First
and the Efficiency for All programs further the goals of FEECA and should be
approved despite failing the G-RIM test. Staff also notes that the Commission
has previously approved electric conservation programs that have not passed all
cost-effectiveness tests to comply with the requirements of Order No.
PSC-14-0696-FOF-EU to assist and educate low-income customers.
Residential
Rebate Programs
To perform the
cost-effectiveness calculations for the residential rebate programs, the
Companies commissioned outside utility consultant Tactical Energy Solutions,
LLC (Tactical Energy Solutions). The analysis was conducted using a
comprehensive cost-effectiveness assessment tool developed by the Florida Solar
Energy Center at the University of Central Florida. The tool utilizes utility
rate structures, service-main and customer-charge data, administrative and
operation and maintenance expenses, depreciation, program implementation costs,
equipment performance and installation costs, fuel-rate assumptions, and
avoided cost calculations for performing the Participants and G-RIM Tests based
on a 20-year analysis period. Electric rate structures from Florida Power &
Light, Duke Energy, and Tampa Electric Company, originating from each company’s
rate tariffs, were used to calculate both the numerical and weighted average
costs of electricity for residential (RS-1) customers. Additionally, natural
gas rates from FPUC and FCG were used to calculate the numerical and weighted
average costs of gas for RS-1 customers. Connection charges were not included
in the analysis. Natural gas cost data was provided by the Companies and
Tactical Energy Solutions. Program implementation and equipment installation
costs were also provided by Tactical Energy Solutions. The appliance average
service lives originated from the March 2023 Updated Buildings Sector Appliance
and Equipment Costs and Efficiencies Report by the U.S. Energy Information
Administration. The equipment costs were referenced from a range of sources.
Based on the
cost-effectiveness test results presented in Table 1-2 for the New
Construction, Existing Customer Retention, and Electric-to-Gas Replacement
(Retrofit) rebate programs, respectively, each appliance for each rebate
program passed the Participants and G-RIM Tests with scores greater than 1.0.
As such, the Companies’ proposed modifications to the residential conservation
rebate programs are both cost-effective and beneficial to its participating
customers.
Table 1-2
Cost-Effectiveness Test Results
|
Appliance/Program
|
Participants
Test
|
G-RIM
Test
|
|
Residential New Construction
|
|
Water Heating – Tankless
|
3.430
|
1.260
|
|
Water Heating – Tank
|
2.070
|
1.340
|
|
Water Heating – ENERGY STAR/High-Efficiency
|
2.620
|
1.200
|
|
Furnace
|
1.730
|
1.050
|
|
Cooking Equipment
|
1.320
|
1.024
|
|
Clothes Dryer
|
1.802
|
1.015
|
|
Residential Existing Customer
Retention
|
|
Water Heating – Tankless
|
3.360
|
1.460
|
|
Water Heating – Tank
|
1.990
|
1.600
|
|
Water Heating – ENERGY STAR/High-Efficiency
|
2.520
|
1.470
|
|
Furnace
|
1.655
|
1.215
|
|
Cooking Equipment
|
1.342
|
1.049
|
|
Clothes Dryer
|
1.778
|
1.119
|
|
Residential Electric-to-Gas
Replacement
|
|
Water Heating – Tankless
|
3.400
|
1.310
|
|
Water Heating – Tank
|
2.040
|
1.390
|
|
Water Heating – ENERGY STAR/High-Efficiency
|
2.610
|
1.230
|
|
Furnace
|
1.740
|
1.040
|
|
Cooking Equipment
|
1.320
|
1.027
|
|
Clothes Dryer
|
1.802
|
1.020
|
Source: Document No. 04651-2026.
Ratepayer
Impact
The Companies
provided potential customer rate impacts under an Energy Conservation Cost
Recovery (ECCR) scenario analysis. The purpose of the ECCR scenario analysis
was to explore how program consolidation and existing infrastructure could be
leveraged to yield administrative efficiency gains to reduce the overall
program cost impacts as program scale increases. The ECCR charge impacts
resulting from various efficiency gains reflect administrative cost reductions
associated with consolidation, standardized program design, and the use of existing
delivery infrastructure. The Companies estimated the collective incremental
program costs savings assuming 0 percent, 5 percent, and 10 percent efficiency
improvements for administrative costs.
Under the
scenario with no efficiency improvements, the modified residential conservation
programs are expected to result in incremental annual program costs of up to
approximately $35,000 for Efficiency First, $45,000 for Efficiency for All, and
$2,428,000 in rebates for all three residential rebate programs combined. The
programs would have an estimated incremental net impact of $3.81/year for a
residential customer using 10 therms/month. Under the highest efficiency
scenario, 10 percent, the Companies estimated a net incremental cost of
$1,910,995, and an impact of $3.00/year for a typical residential customer.
Conclusion
Staff recommends
that the Companies’ residential program modifications be approved as they
further the goals of FEECA. The administrative changes to the residential
survey program Efficiency First and low-income program Efficiency for All will
educate customers and provide resources to improve energy efficiency, while the
rebates for the residential appliance programs will encourage direct efficiency
measures.
Issue 2:
Should this docket be closed?
Recommendation:
Yes. If no person whose substantial interests are
affected by the proposed agency action files a protest within 21 days of the
issuance of the order, this docket should be closed upon the issuance of a
consummating order. (Sparks)
Staff Analysis:
If no person whose substantial interests are
affected by the proposed agency action files a protest within 21 days of the
issuance of the order, this docket should be closed upon the issuance of a
consummating order.
