Melissa G. Liazos Senior Counsel August 1, 2013 VIA HAND DELIVERY AND E-FILING Mark D. Marini, Secretary Department of Public Utilities One South Station, 5th Floor Boston, MA 02110 Re: D.P.U. 13-xx – 2012 Energy Efficiency Annual Report Boston Gas Company and Colonial Gas Company each d/b/a National Grid ________________________________________________________________________ Dear Secretary Marini: On behalf of Boston Gas Company and Colonial Gas Company each d/b/a National Grid (the Company”), enclosed please find the Company’s 2012 Energy Efficiency Annual Report in this proceeding, along with the Affidavits of Lynn Westerland and Brian Pelletier, my Appearance of Counsel, and Certificate of Service. Thank you for your time and attention to this matter. Very truly yours, Melissa G. Liazos Enclosures cc: Jonathan Goldberg, Hearing Officer Matthew Saunders, Assistant Attorney General Steven Venezia, Department of Energy Resources 40 Sylvan Road, Waltham, MA 02451-1600 T: 781-907-2108  F: 781-907-5701  [email protected]  www.nationalgrid.com COMMONWEALTH OF MASSACHUSETTS DEPARTMENT OF PUBLIC UTILITIES D.P.U. 13- Affidavit ofLynn Westerlind 1, Lynn Westerlind, do attest and swear to the following: 1. 1 am employed by National Grid as Manager, Policy and Evaluation Program Strategy Massachusetts. In my current position, I am responsible for energy — efficiency evaluation and for energy efficiency related regulatory efforts in support ofenergy efficiency for Boston Gas Company and Colonial Gas Company. 2. 1 am familiar with National Grid’s 2012 Energy Efficiency Annual Report Filing. 3. 1 have reviewed the filing, and the representations made therein are true and correct to the best ofmy knowledge. Signed under the pains and penalties ofpen ry. r Lynn Westerlind Dated: August 1,2013 COMMONWEALTH OF MASSACHUSETTS DEPARTMENT OF PUBLIC UTILITIES D.P.U.13- Affidavit of Brian Pelletier I, Brian Pelletier, do attest and swear to the following: 1. I am employed by National Grid as Manager, Energy Efficiency Reporting. In my current position, I am responsible for reporting of energy efficiency spending and savings in support of energy efficiency for Boston Gas Company and Colonial Gas Company. 2. I am familiar with National Grid's 2012 Energy Efficiency Annual Report Filing where it pertains to spending and savings. 3. I have reviewed the spending and savings portions of the filing, and the representations made therein are true and correct to the best of my knowledge. Signed under the pains and penalties of perjury. Dated: August 1,2013 THE COMMONWEALTH OF MASSACHUSETTS DEPARTMENT OF PUBLIC UTILITIES __________________________________________ ) Boston Gas Company and Colonial Gas ) Company each d/b/a National Grid ) D.P.U. 13-xx 2012 Energy Efficiency Annual Report ) __________________________________________) NOTICE OF APPEARANCE In the above-entitled proceeding, I hereby appear for and on behalf of Boston Gas Company and Colonial Gas Company each d/b/a National Grid. Melissa G. Liazos Senior Counsel National Grid USA Service Company Inc. 40 Sylvan Road Waltham, MA 02451 (781) 907-2108 phone (781) 907-5701 fax [email protected] Date: August 1, 2013 THE COMMONWEALTH OF MASSACHUSETTS DEPARTMENT OF PUBLIC UTILITIES __________________________________________ ) Boston Gas Company and Colonial Gas ) Company each d/b/a National Grid ) D.P.U. 13-xx 2012 Energy Efficiency Annual Report ) __________________________________________) CERTIFICATE OF SERVICE I hereby certify that I have this day served the foregoing in the above referenced docket upon the service list compiled in this proceeding by hand delivery and E-Filing. BOSTON GAS COMPANY and COLONIAL GAS COMPANY each d/b/a NATIONAL GRID ____________________________ Melissa G. Liazos Senior Counsel National Grid USA Service Company Inc. 40 Sylvan Road Waltham, MA 02451 (781) 907-2108 [email protected] Date: August 1, 2013 Boston Gas Company and Colonial Gas Company d/b/a National Grid 2012 Gas Energy Efficiency Annual Report Table of Contents I. Introduction ____________________________________________________________ 1 A. Purpose of Annual Report______________________________________________ 3 B. Organization of Annual Report _________________________________________ 3 C. Summary of Program Portfolio _________________________________________ 3 II. Program Performance ____________________________________________________ 6 A. Residential Sector Programs ____________________________________________ 6 1. Summary ______________________________________________________________ 6 2. Residential Programs ___________________________________________________ 11 a. Residential New Construction & Major Renovation _______________________________ 11 b. Residential Heating and Water Heating _________________________________________ 14 c. Residential Mass Save/Weatherization __________________________________________ 16 d. Residential Multi-Family Retrofit ______________________________________________ 21 e. Behavior Feedback _________________________________________________________ 23 3. Residential Pilots ______________________________________________________ 25 a. Deep Energy Retrofit _______________________________________________________ 25 b. Community-Based Pilots ____________________________________________________ 27 c. Residential Building Practices & Demonstration __________________________________ 29 B. Low-Income Sector Programs _________________________________________ 32 1. Summary _____________________________________________________________ 32 2. Low-Income Retrofit Program ____________________________________________ 33 C. Commercial and Industrial Sector Programs _____________________________ 36 1. Summary _____________________________________________________________ 36 2. C&I Programs _________________________________________________________ 40 a. C&I New Construction and Major Renovation ___________________________________ 40 b. C&I Retrofit ______________________________________________________________ 43 c. C&I Direct Install __________________________________________________________ 46 III. Evaluation Measurement and Verification Activities _________________________ 50 A. Summary ___________________________________________________________ 50 B. Residential Program Studies ___________________________________________ 53 C. Residential Pilot Studies ______________________________________________ 65 D. Low-Income Program Studies _________________________________________ 66 E. C&I Program Studies ________________________________________________ 67 F. Special & Cross Sector Studies _________________________________________ 77 G. Future Studies ______________________________________________________ 88 IV. Statutory Budget Requirements ___________________________________________ 92 A. Introduction ________________________________________________________ 92 i Boston Gas Company and Colonial Gas Company d/b/a National Grid 2012 Gas Energy Efficiency Annual Report Table of Contents B. Minimization of Administrative Costs ___________________________________ 92 C. Competitive Procurement _____________________________________________ 94 D. Low-Income Spending ________________________________________________ 94 V. Performance Incentives __________________________________________________ 95 VI. Audits ________________________________________________________________ 98 VII. Appendices ____________________________________________________________ 99 A. Glossary of Defined Terms ____________________________________ Appendix A B. Cost-Effectiveness Supporting Tables and Documentation __________ Appendix B C. Program and Pilot Program EM&V Studies _____________________ Appendix C D. Performance Incentives Supporting Documentation _______________ Appendix D E. Other Supporting Documentation ______________________________ Appendix E F. Lost Base Revenue Information ________________________________ Appendix F ii Boston Gas Company and Colonial Gas Company d/b/a National Grid Page 1 2012 Gas Energy Efficiency Annual Report I. INTRODUCTION During program year 2012, the final year of implementation under the 2010-2012 three-year energy efficiency plans, the Massachusetts Energy Efficiency Program Administrators1 (the “Program Administrators” or “PAs”) continued to build on the nationally acclaimed successes of program years 2010 and 2011. Among the many awards and accomplishments achieved during program year 2012, the American Council for an Energy-Efficient Economy (“ACEEE”) ranked Massachusetts number one in the nation for its energy efficiency efforts for the second year in a row. Most notably in 2012, the PAs successfully delivered on their very ambitious goals for the program year, as reviewed and approved by the Massachusetts Department of Public Utilities (the “Department”) in D.P.U. 09-116 through 09-127 and as submitted in each PA’s 2012 Mid-Term Modification dated October 28, 2011. The PAs were able to attain historic levels of energy savings while maintaining budgetary control and complying with the directive of the Green Communities Act to seek all cost-effective energy efficiency opportunities. The 2012 goals were intentionally designed to be very challenging stretch goals, and achievements in savings and benefits reached unprecedented levels in Massachusetts for residential, low-income, and commercial and industrial (“C&I”) programs. The PAs successfully implemented their programs in the field while also continuing this unprecedented ramp up of spending and savings levels for energy efficiency programs to meet goals not just for program year 2012, but for the full life of the three-year plans, and to sow the seeds for additional savings going forward. The accomplishments of 2012 were achieved despite a slower than expected recovery in the economy, low natural gas prices, and a significant increase in savings goals. In the wake of these challenges, the PAs continued to proactively work toward developing new delivery methods to reach more customers and to encourage customers to move forward with greater commitments and investments in energy efficiency. For example, during 2012, the PAs focused on refining their marketing approach to achieve deeper savings from participating customers, and worked diligently to reach a broader range of customers to implement all cost-effective program offerings. The PAs also continued to develop new technologies and new initiatives in 2012 in order to expand programming efforts and achieve their goals. The Program Administrators also continued to engage in very high levels of integration, coordination and cooperation – all of which are hallmarks of the 2010-2012 three-year energy efficiency plans. Examples of this statewide coordination in 2012 include the establishment of consistent guidelines and protocols for delivery of the Voluntary Accelerated Rebate Pilot, which will be implemented in 2013, and continued expansion of upstream product offerings. In 2012, the Program Administrators created the Evaluation Management Committee (“EMC”) similar to the successful C&I and Residential Management Committees. The EMC, comprised of PA representatives and the Massachusetts Energy Efficiency Advisory Council (“EEAC” or “Council”) consultants, serves as a steering committee for statewide evaluation issues. The EMC 1 The Massachusetts Program Administrators are: Bay State Gas Company d/b/a Columbia Gas of Massachusetts, The Berkshire Gas Company, Blackstone Gas Company, Cape Light Compact, Fitchburg Gas and Electric Light Company d/b/a Unitil, National Grid, New England Gas Company, NSTAR Electric Company, NSTAR Gas Company, and Western Massachusetts Electric Company. Boston Gas Company and Colonial Gas Company d/b/a National Grid Page 2 2012 Gas Energy Efficiency Annual Report plans, prioritizes and delineates the research studies to be undertaken. The PAs worked together to engage in 25 studies across a wide span of program sectors in 2012, underscoring the fact that the evaluation, measurement and verification (“EM&V”) of these program offerings remains a critical and vital tool for both Program Administrators and interested stakeholders in an ever changing marketplace. The Program Administrators also continued to be actively engaged with the EEAC and worked collaboratively with the EEAC’s consultants to meet detailed reporting and data collection deadlines in 2012. The PAs reviewed and expanded upon many areas of policy and reporting, including continuing accurate data development, evaluation and measurement of successes and areas in need of modification, transparent codes and standards, and building the framework necessary to ensure the ability to continue to offer successful and sustainable energy efficiency programs in the Commonwealth. In addition, the PAs were also at the forefront of creating a culture of sustainability through public education. In May 2012, the PAs hosted an Appreciative Inquiry Summit, the first of its kind for energy efficiency in Massachusetts, which provided a venue for a diverse array of nearly 300 key stakeholders, including customers, civic leaders, contractors, key trade allies, energy efficiency experts, and others to provide the PAs with insights to guide efforts designed to continue to create a culture of sustainability in the Commonwealth. The PAs also hosted an Energy Efficiency Conference and Expo in 2012, which featured a full day of programming focused primarily on business and municipal customers. Throughout 2012, the PAs continued their efforts to integrate gas and electric energy efficiency services and expand statewide marketing efforts, which, through the use of the Mass Save® brand, continued to be an integral part of promoting energy efficiency programs in Massachusetts. The 2012 marketing campaign introduced a renewed, simplified Mass Save message. Simultaneously with the activities and achievements noted above, the Program Administrators also devoted considerable time and effort in 2012 to developing their 2013-2015 energy efficiency plans. During the 2013-2015 planning process, each PA focused on increasing savings goals and reducing costs, streamlining the participation process in all sectors and realigning outreach and delivery efforts to be more customer-focused, all of which built on the achievements and lessons learned from 2010-2012. Given the unprecedented nature of these efforts, and the ambitious goals established in the 2010- 2012 Plans, program year 2012 performance has been an outright success for energy efficiency in Massachusetts. Over the three years of the 2010-2012 energy efficiency plans, the Program Administrators have achieved unprecedented levels of savings and benefits within budget, and look forward to continuing these efforts and achieving additional successes going forward. Boston Gas Company and Colonial Gas Company d/b/a National Grid Page 3 2012 Gas Energy Efficiency Annual Report A. Purpose of Annual Report Boston Gas Company and Colonial Gas Company d/b/a National Grid (the “Company”) is pleased to provide its Energy Efficiency Annual Report (“Annual Report”) for 2012. The purpose of the Annual Report is to: • Provide a comparison of the Company’s planned, preliminary year-end, and evaluated (where applicable) expenses, savings, and benefits at the portfolio, sector, and program levels for the program year. • Identify significant2 variances between the Company’s planned and evaluated costs, savings, and benefits for the program year, and discuss reasons for such variances. • Discuss how program performance during the program year informs the Company’s proposed modifications to program implementation, if any, during upcoming years. • Describe the EM&V activities undertaken by the Company that have not been included in previous Annual Reports, and explain how the results of the EM&V studies impact program cost-effectiveness. • Describe the performance incentives that the Company proposes to collect. B. Organization of Annual Report The Company’s 2012 Annual Report is organized as follows: • Section I.C provides summary information on program performance at the portfolio and sector levels. • Section II provides detailed information on program performance at the sector and program levels for the residential, low-income, and C&I sectors. • Section III provides detailed information on the EM&V studies included in the Annual Report for each sector. • Section IV addresses statutory budget requirements. • Section V addresses the performance incentives the Company proposes to collect. • Section VI addresses energy efficiency audits conducted during the past five years, where applicable. • Section VII consists of Appendices A through F which provide further detailed supporting documentation for this report. C. Summary of Program Portfolio The purpose of this section is to provide summary information on program performance at the portfolio and sector levels. 2 Unless otherwise noted, “significant” variances are defined throughout this Annual Report as variances of +/-20 percent or more between the stated values.