The URL can be used to link to this page

Home My WebLink AboutRESPONSE - RFP - 23725 P990 RESIDENTIAL LIGHTING SERVICES�PT IVRIO A.Y.101M 1Y�. w0 I �f 1 :I 4' ,t Qualifications for Designing & Implementing Programs Promoting Energy Efficient Products Bradley Steele Energy Federation, Inc. 40 Washington St., Suite 2000 Westborough, MA 01581 bsteele@efi.org www.efi.org Peter Feroli Applied Proactive Technologies, Inc. 1242 Main Street Springfield, MA 01103 pete►@appliedproactive.com www.appliedproactive.com Presentation to Fort Collins Utilities - June 14, 2005 APT L Northeast Energy Efficiency Partnerships (NEEP) ENERGY STAR Appliance & Lighting Programs Clients — New England and Long Island (NY) utilities and energy efficiency program administrators g Program objectives — Achieve higher market share in the NE region for ENERGY STAR appliances and lighting products Products — CFLs & CF fixtures, clothes washers, room air conditioners, dehumidifiers, refrigerators, and dishwashers Program size — $94 million rebate expenditures; 13.5 million lighting products, 230,000 appliance products o Program time frame —1998 to present APT U;l Midwest Energy Efficiency Alliance "Change A Light" Program Client — Midwest Energy Efficiency Alliance (MEEA), on behalf of utilities and state energy offices in Minnesota, Illinois, Missouri, Ohio, and Kentucky Program objective — Participate in national ENERGY STAR fall campaign to promote efficient lighting products Products rebated — CFLs Volume — 30,000 CFLs first year, goals expanded to 200,000 CFLs in 2003, and 400,000+ in 2004 Time frame — 2001 - present APT I V Wisconsin "Focus on Energy" ENERGY STAR Lighting and Appliance Programs 6.1 Wisconsin Department of Public Administration (direct administrator is Wisconsin Energy Conservation Corporation, or WECC) Program objective — Achieve greater share for ENERGY STAR lighting and appliance products in the Wisconsin market ;- Products rebated — ENERGY STAR lighting and appliance products -r Volume—1,875,000 products, $9,800,000 dollars Program time frame — 1999 to present A 7t APT National ENERGY STAR Clothes Washer Campaigns Double Your Savings & Rewards Clients — Utilities and PGC program sponsors from approximately twenty states (or regions within states) Program objective — Plan and execute a national campaign, supported by large clothes washer manufacturers to increase market share of ENERGY STAR clothes washers Volume — 69,000 rebates, $4 million leveraged manufacturer rebate dollars in 2003; 43,000 rebates, $1.7 million leveraged manufacturer rebate dollars in 2004 Time frame — Spring/Summer 2003 & 2004 APT Midwest Lighting & Appliance Rebates - 2000 through 2003 Year Lighting Products Lighting Dollars Appliance Products Appliance Dollars 2000 32,500 $222,000 79000 $360,000 2001 1069000 $475, 000 21105 $133, 000 2002 520,000 $1,530,000 18,300 $694,000 2003 892,000 $3,100, 000 30,800 $1, 849, 000 APT APT Qualifications & Capabilities General Management Services: Program planning and administration Contract staffing for clients ;, Over 60 fully qualified energy services representatives on staff Client representation at national conferences Customer hotline services with experienced representatives APT APT Qualifications & Capabilities 411 APT was founded in 1996 with its Principals having worked in the design and implementation of energy efficiency programs since 1989 Unequaled experience in field services for residential market transformation efforts Enrolled over 6,000 trade allies into programs implemented and currently visit approximately 4,000 retailers on a monthly basis Have trained over 30,000 retail sales associates and have performed over 1,500 Product Knowledge (PK) trainings Have run thousands of special promotions at retail locations, home shows and other venues resulting in the sale of well over APT 1;"I 171 -�[ APT Qualifications & Capabilities Event Management and Implementation Services: In-store promotions Trade shows . Special events (i.e. turn -ins, community fairs, etc.) Coordination and management of regional and national promotions through retailers and manufacturers Refrigerator, air conditioner, dehumidifier, and torchiere turn -in specialists APT APT Qualifications & Capabilities Field Implementation Services: h Work with major retailers, manufacturers, buying groups Program participation solicitation and enrollment .11 Retailer training, outreach and ongoing field support Point of Purchase material set-up, distribution and ongoing maintenance Seamless coordination with regional and national ENERGY STAR efforts APT `I- ; I- ' T APT Qualifications & Capabilities Evaluation Services: Sales data collection and inventory verification Direct mail customer surveys Full range data analysis and reporting APT Qualifications for DesignAN ing & Implementing Programs Promoting Energy Efficient Products Bradley Steele Energy Federation, Inc. 40 Washington St., Suite 2000 Westborough, MA 01581 bsteele@efi.org www.efi.org Peter Feroli Applied Proactive Technologies, Inc. 1242 Main Street Springfield, MA 01103 petet@appliedproactive.com www.appliedproactive.com Presentation to Fort Collins Utilities - June 14, 2005 APT APT Qualifications & Capabilities Marketing Support Services: 115 Cost-effective design and production of marketing collateral 1'. Web site design, development and maintenance uw Point of Purchase (POP) material design and production .k Newsletter design and production Press release services Print advertising design and coordination APT 1;3' TI Iz Why Choose APT and EFI (cont.)? Extensive hands on experience and understanding of what can be expected and what must be considered in designing an effective program Humility. We don't know everything, and we will not try to pretend that we do Open Communication. We always work on a basis of open communication with our clients with a focus on honest and realistic dialog on establishing achievable strategies and program approaches based on the best information available at the time APT Why Choose APT and EFI? Long track record of implementing (largely) successful programs, and there is no better road map for designing a successful program than delivering successful programs Proven ability to promote a variety of different products, using a variety of program approaches — upstream, midstream, downstream Can assist clients in establishing program guidelines, creating forms, and planning marketing strategies in a manner that will minimize confusion, errors, and aggravation- reducing program costs while enhancing customer satisfaction APT Challenges and Opportunities for FCU Challenges (cont.): Understanding that there is no "one size fits all" approach that will work. A final strategy will need to be based on maximizing the ability for program success, while minimizing as best possible the barriers that all similar programs face Choosing whether to sug est incentives or not and then deciding on the appropriate approach or combination of approaches that will best fit the FCU market given budgets and protocols APT Challenges and Opportunities for FCU Challenges: Identify all FCU program requirements and desired results. This includes goals, rules/guidelines, eligible customers, information collection, tracking and reporting protocols Establishment of a final program budget Identifying program strategies that will fit within structures and budgets identified through the above activities Any approach will need to be built around best confining a program to FCU territory, while being flexible for participants and potential expansion if other territories offer similar programs No Text APT Challenges and Opportunities for FCU Opportunities: Design of a program using the "lessons learned" from other tried and tested approaches that can serve as a model for other potential programs in Colorado Ow AlAbility to capitalize off of the increased market presence of lighting products in national chains that have a strong presence in FCU territory Increase consumer awareness and acceptance of ENERGY STAR compact fluorescent lighting products Potential to address other ENERGY STAR products, such as appliances, and phase in a more comprehensive program in FCU territory CFLs -Working with Mass Merchandisers An Implementation Contractor's Perspective Presented By Peter Feroli Applied Proactive Technologies, Inc Lighting Program Designs • Types of Programs — Product Incentives — Cooperative Marketing/Advertising Only — Industry Initiatives — Combination Approach Lighting Program Designs (Continued) • Components of Programs: — Field Support (Enrolling, Training, POP, Promotions, Site Visits) — Marketing Materials (POP) — Instant Rebates / Mail -in Rebates — Cooperative Advertising (Print, Radio, TV) — Product Buy -Downs (Manufacturer, Sales Data) — Promotional Events (In Store, Home Shows, Energy Fairs, etc) APT 1;', I ' Qualifications for Designing & Implementing Programs Promoting Energy Efficient Products Bradley Steele Energy Federation, Inc. 40 Washington St., Suite 2000 Westborough, MA 01581 bsteele@efi.org www. efi.org Peter Feroli Applied Proactive Technologies, Inc. 1242 Main Street Springfield, MA 01103 peter@appliedproactive.com www.appliedproactive.com Presentation to Fort Collins Utilities - June 14, 2005 Participating Retailer Types • Large National Home Improvement (DIY) • National Mass Merchandisers • Regional Hardware Stores/Chains • Wholesale Clubs • Regional Mass Merchants • Supermarkets • Drug Stores • Other (Includes Discount stores, Office Supply, Mom and Pops, etc) Historical Barriers to Participation Varies by Program Design and Implementation Strategy • Mass Merchandisers: — Instant Coupon Processing (Administrative) — Regional Program Inconsistencies — Lack of Regional Advertising Opportunities — Customer Ineligibility - (non -participating regions) • Supermarkets and Drug Stores: — Instant Coupon Processing (Front -End Customer Screening) — Lack of Regional Advertising Opportunities — Product Price (Nature of purchase patterns in Supermarkets) Reducing Barriers - Things to Consider • Program Design Structure: — Define Program Objective — Create Flexibility — Reduce Administrative Burden — Streamline Data Collection Requirements (When Possible) — Regional Consistency (Opens up Advertising Opportunities) — Equal Opportunity for Retailers — Incentive Strategies - (What are the objectives?) Program Implementation Strategies • Coupons: — Instant — Mail -in (Piggyback with Manufacturers) • Benefits: — Allows for All Retailers to Participate — Drives Sales by Lowering First Cost — Provides Quantifiable Data — Allows Customer to Equate Value of Product — Serves as Marketing Tool for Program Sponsors Program Implementation Strategies Continued -Page 2 • Advertising: — Cooperative — Program Sponsored Only • Benefits: — Creates Consumer Awareness — Helps Drive Sales and Foot Traffic at Retail — Leverages Industry Dollars (Cooperative) Program Implementation Strategies (Continued -Page 3) • Industry Initiatives: Invite Industry to Participate through Proposal Process • Product Buy -downs (Manufacturer Based or Sales Data Based) • Mail -in Coupons • Cooperative Advertising • POP Material • Product Placement and Display Requirements • Data Verification (Shipping, Receiving and Sales) • Benefits: — Increased Retailer Participation — Lowest Customer Cost (Assuming consistent incentive structure) — Increased Availability and Variety of Product — Leverage Industry Dollars (Coop ads, floor space, product displays and materials) Moving Forward • Consider Utilizing a Combination of Strategies whenever possible • Consider the Funding and Goals of the Program • Create a Design the Best Facilitates Industry Participation (Both Manufacturer and Retailer) The End May 26, 2005 Residential Lighting Program Design Services RFP - P990 APT, Inc. 1242 Main Street Springfield, MA 01 103 413-731-6546 EFI, Inc. 40 Washington Street, Suite 3000 Westborough, MA 01581-1013 508-870-2277 Submitted To: -4A0APT Applied Proactive Technologies, Inc. City of Fort Collins Purchasing Division 215 North Mason Street, 2"d Floor Fort Collins, CO 80524 Attention: Opal Dick May 26, 2005 Dear Ms. Dick, ENERGY FEDERATION INCORPORATED 0 On behalf of Applied Proactive Technologies and our team partner Energy Federation Inc., I want to thank you for the opportunity to submit this proposal to the City of Fort Collins for design assistance for the Residential Lighting program to be offered by Fort Collins Utilities. The APT/EFI team is exceptionally qualified to undertake this work and we look forward to bringing our combined experience to the FCU. We look forward to your response to our submittal and welcome the opportunity to share additional information you may need. Please call with any questions and we will respond immediately. Sincerely, &4 A - 4d4 A Peter M. Feroli Director of Energy Efficiency Programs Applied Proactive Technologies, Inc. APT Bradley Steele's Background Started a not -for -profit energy group, PERC, in 1980, which ultimately merged with another organization to become Conservation Services Group (CSG). Today, CSG is the largest residential Energy Services Company in the country, with over half a dozen offices and 300 employees. Past President of CSG and currently serving as Director Original founder of Energy Federation, Inc. (EFI) in 1982. President and CEO of EFI for the past 23 years Member of the Residential Team that worked `collaboratively' with six large New England utilities to design the nation's first comprehensive portfolio of residential Demand Side Management programs (for both retrofit and new construction sectors) in 1989-1990 APT/EFI Proposal to Fort Collins Utilities -RFP P990 Residential Lighting Program Design Services INTRODUCTION: ................................................................................................................................. 2 STATEMENT OF UNDERSTANDING OF REQUIRED SERVICES: ............................................................. 3 PROGRAM PLAN OUTLINE & SCOPE OF WORK: ................................................................................... 4 GENERALAPPROACH................................................................................................................................ 4 PROGRAM ELEMENTS AND OUTLINE............................................................................................................... 4 Program Budgets, Allocation of Resources and Leveraging: .................................................................. 4 Staging of Program Elements, Program Ramp Up & Implementation Options: ........................................ S Establishing Realistic Goals and Program Costs: .................................................................................. 6 Market Penetration & Assessing Local Attitudes about Efficient Lighting: ............................................... 7 Identification of Products to be Promoted: .......................................................................................... 8 Building Consumer Awareness; Marketing and Education:.................................................................... 8 Manufacturer Participation: ............................................................................................................... 9 Retailer Outreach and Support: ....................................................................................................... 10 Targeted Financial Incentives: ......................................................................................................... 10 Downstream (Customer) Incentives: ............................................................................................... 12 Instant Rebate Coupons: ............................................................................................................. 12 Mail -In Rebate Coupons: ............................................................................................................. 13 Upstream (Manufacturer/Retailer) Incentives: ............................................................................... 14 ProductBuy -Downs: ................................................................................................................... 14 ProductMark -Downs: .................................................................................................................. 15 Minimizing Non-FCU Customer Subsidization: ................................................................................... 16 Staging Special Events and Promotions: ........................................................................................... 16 Fluorescent Lamp Disposal / Recycling Considerations: ...................................................................... 17 PROPOSALSUMMARY.............................................................................................................................. 17 TIMELINE: ......................................................................................................................................... IS STAFFING & MANAGEMENT PLAN: .................................................................................................... 19 QUALIFICATIONS:............................................................................................................................. 20 SIMILAR ENERGY STAR LIGHTING EXPERIENCE............................................................................................ 20 INDUSTRY INCENTIVE PROGRAM (IIP) EXPERIENCE.......................................................................................... 20 DATA MANAGEMENT AND TRACKING EXPERIENCE............................................................................................. 20 FIELDEXPERIENCE................................................................................................................................. 21 RELEVANT PROJECTS AND REFERENCES........................................................................................................ 22 PROPOSED COMPENSATION AND INVESTMENT SUMMARY: ............................................................. 24 REFERENCES:..................................................................................................................................... 25 AVAILABILITY: .................................................................................................................................. 26 Appendix 1 Abbreviated Statement of Qualifications Appendix 2 Resumes APT/EFI Proposal to Fort Collins Utilities -RFP P990 Residential Lighting Program Design Services Introduction: Applied Proactive Technologies, Inc. (APT) and Energy Federation Inc. (EFI) are pleased to submit this joint proposal to Fort Collins Utilities (FCU) to provide consulting services for the design of a Residential Lighting Program to be offered in FCU service territory. APT and EFI have a long history of working together and have extensive experience implementing market based ENERGY STAR® Lighting and Appliance programs in several regions of the United States for utility, state and third party energy efficiency providers. APT currently implements residential lighting programs for sponsors in Connecticut, New Hampshire, Maine, Rhode Island, Long Island - NY, Illinois, Oregon, Idaho, Montana, Washington and Arizona. They visit approximately 4,000 retailers a month, work with all of the major lighting manufacturers on a daily basis and in total have made hundreds of thousands of site visits to retailers. (For APT's abbreviated statement of qualifications, as well as a statement of EFI's qualifications, please see Appendix 1.) Founded in 1982, EFI is one of the leading distributors of energy efficiency -related products in the United States. EFI also has worked with over thirty utility clients and other providers of energy efficiency programs during the past two decades to promote the use of energy saving products through fulfillment or "catalog" programs, and through initiatives that have provided incentives for residential customers purchasing a wide variety of energy -saving products, ranging from ENERGY STAR lights and appliances, to heating and cooling equipment, windows, insulation, and setback thermostats. For the past six years, EFI has processed all lighting and appliance rebates for sponsors of the New England Energy Efficiency Partnerships' (NEEP) Residential ENERGY STAR Products programs. It also has processed all lighting and appliance rebates for programs administered by the Wisconsin Energy Conservation Corporation (WECC) and the New Hampshire CORE Utilities, as well as several hundred thousand lighting rebates for the Midwest Energy Efficiency Alliance (MEEA). EFI has issued rebate checks in excess of $130 million for more than 20 million energy - efficient products. It has paid incentives to consumers, to retailers, to salespeople, to contractors, and to manufacturers; it has implemented programs in which incentives were split between electric and gas utilities, electric and water utilities, and between utilities and manufacturers. Collectively, APT and EFI have unparalleled experience and insight into the energy efficient lighting market, particularly as it operates through other efficiency programs around the country. The personnel who will be assigned to this project, EFI's Brad Steele and APT's Peter Feroli have over 40 years of combined industry experience. In addition to program implementation, the APT/EFI team has a proven track record of working collaboratively with clients to design as well as implement programs. We are familiar with every approach and strategy that has been employed to promote energy -efficient lighting to the residential sector, using ratepayer or system benefits charges funding. The team looks forward to bringing our experience to FCU to assist in the design of a program using the knowledge of tried and tested program strategies while also customizing approaches to meet the specific needs of the FCU market. 2 APT/EFI Proposal to Fort Collins Utilities -RFP P990 Residential Lighting Program Design Services Statement of Understanding of Required Services: FCU is interested in designing a Residential Lighting Program to be implemented, at least initially, only within FCU service territory and offered to FCU residential customers. FCU is currently an ENERGY STAR partner and the program's objective will be to promote ENERGY STAR qualified products. The final program design will be executed as a component of FCU's "Power to Save" education and awareness campaign. FCU would ideally like to be able to launch elements of the program in time for the fall 2005 lighting season and understands that a full-fledged program may take more time to ramp up. The specific services requested in this RFP are for program design assistance and not actual program implementation. Although this RFP does not cover implementation, the selected program design contractor may also have the opportunity to negotiate a contract for these services. The budget for actual program implementation is anticipated to be between $35,000 and $80,000. The budget for providing assistance to FCU in designing a Residential Lighting Program will be distinct from the budget for implementing the program. As laid out in the RFP, the overall objective of the program will be to effect a market transformation leading to greater acceptance by FCU customers of energy -efficient lighting products, and correspondingly, greater use of ENERGY STAR light bulbs and fixtures. An effective program that significantly increases the market penetration of ENERGY STAR lighting products in FCU territory will lead to long-term energy savings and some peak demand reduction. FCU has not offered a residential lighting program in the past, beyond limited consumer education, and would like to build off of successful strategies that have been tried and tested in other regions (and modified as necessary for the FCU market) rather than "reinventing the wheel". FCU would like to design a program with the intent of minimizing administrative cost as much as possible and leveraging existing resources where available. The "Program Elements and Factors" section of the RFP clearly states the minimum expected services to be provided by the selected contractor. The APT/EFI team has reviewed all of these requirements and is fully prepared to provide all requested services as well as perform other tasks if necessary. Our goal is to assist in the design of a program that will best meet the expectations of FCU while also being practical and realistic. We have based our suggestions, on our experience working with consumers, retailers, and manufacturers to implement dozens of initiatives with the same, or very similar, objectives. APT and EFI also understand that in addition to designing a program to promote screw based CFLs, the selected contractor is expected to provide information and recommendations on the potential promotion of other ENERGY STAR products including CF fixtures, electronically ballasted linear fluorescent tubes (T-5s or T8s), ceiling fans, and possibly appliances. If the final program design includes other products, particularly appliances, the idea would be to promote all products under a more encompassing "ENERGY STAR Products Program" umbrella with lighting and appliances as distinct product categories. A recent baseline study was completed to assess the current state of the Fort Collins marketplace for major residential appliances (Clothes Washers, Dishwashers, Refrigerators and Room Air Conditioners), energy efficient residential lighting and consumer electronics. The study indicates that the market for CF lighting is less mature than other regions where programs have been implemented over time. The APT/EFI team believes, however, that given the good representation of national retailers in FCU territory and their history in working with these other programs, that the ramp up time and "program acceptance" curve for an FCU program can be short. The APT/EFI team is prepared to work collaboratively with FCU to develop a final program structure to be implemented and product mix to be offered. Throughout the remainder of this proposal we will focus primarily on the lighting component of the program, which is the major element referenced in the RFP. 3 APT/EFI Proposal to Fort Collins Utilities -RFP P990 Residential Lighting Program Design Services Program Plan Outline & Scope of Work: Before laying out the hypothetical outline requested in the RFP, the APT/EFI team feels it is important to provide FCU with some of the general approaches and strategies that have been used in other regions to implement Residential Lighting Programs. This is not intended to represent a finite list of potential program strategies, but rather, to illustrate what has been done, and what may be options for FCU to consider. The final program design will need to be based largely on FCU's operational requirements and program budget, which will make some approaches more logical than others. Additionally, as FCU has stated it would like to minimize program administrative costs for implementation, some approaches may not be feasible within the stated budget range. General Approach The first step in designing a market based Residential Lighting and/or Products. program will involve the APT/EFI team working closely with FCU to identify any and all particular requirements that FCU has regarding program goals, program guidelines and rules (e.g. which customers are eligible to receive incentives) information collection, tracking and reporting, and final budgets available for the program. There are a number of strategies that could be devised and executed; the design process will be critical in determining whether the program will meet FCU needs while maximizing opportunities for customers and industry partners to participate, and realize concrete benefits. The APT/EFI team understands that the design process will proceed iteratively. We have reviewed the Market Baseline Study completed in March, and have done some independent research to identify potential retail participants with stores within the Fort Collins city limits, so we have some ideas about approaches FCU will likely want to consider to effectively use its program budget dollars to further the development of a market for energy efficient lighting products within its territory. We have not pre -judged, however, which approach or approaches FCU should ultimately use to achieve its objectives. Our team will be available to work on this design assignment this summer. We will maintain regular communication with FCU staff involved in the design process, and will be responsive to requests they make of us. We are confidant that working with FCU staff we can design a Program Plan within the timeframe identified in the RFP. Program Elements and Outline Program Budgets, Allocation of Resources and Leveraging: The anticipated FCU annual budget of $35,000-$80,000 is small, even at the high end. This is especially true for a market transformation program, which generally is more costly than a more traditional load reduction program from an administrative aspect. Budget allocations for similar programs are usually broken out as follows: ■ Internal Program Administration (FCU) • Outside Program Contractor Implementation (Field Support and Incentive Fulfillment/Reporting) • Program Marketing (POP, newspaper, radio, etc) • Financial Incentives • Program Evaluation Given the size of the budget, it will likely not be practical or realistic to implement the full breadth of program services generally associated with other similar programs that span much larger geographical areas with more customers and much higher budgets. Most market transformation 4 APT/EFI Proposal to Fort Collins Utilities -RFP P990 Residential Lighting Program Design Services efficiency programs have often been implemented on a statewide or regional basis with several utilities combining efforts and resources under a coordinated program umbrella that provides significant leveraging opportunities that increase the total available implementation budget. A continuous full-time program will require full time or at least permanent part-time staff available for implementation. The cost of program labor in addition to marketing/advertising materials and incentive fulfillment could potentially exhaust the entire budget. In looking at a simple hypothetical example: One Full time person performing all program tasks (which is not really possible) at a fully loaded hourly rate of $35/hour would equal $70,000 per year not including miscellaneous program expenses. Without participation from additional program sponsors, trying to allocate the budget across all possible implementation categories will dilute the impact and effectiveness of the overall program. The APT/EFI team will collaborate with FCU to determine the most critical priorities objectives for the program. This process will better enable us to identify and suggest a final strategy for allocating resources and focusing efforts that best meets FCU' goals. Through this process we will look for other real leveraging opportunities to stretch program funding further and capitalize on industry partnerships that complement and enhance FCU's efforts and commitments. Such opportunities may be available from the manufacturer/retailer communities as well as from national efforts through EPA/DOE. In addition, as other programs have already invested time and money in developing program materials, there may be opportunities for FCU to "buy -in" and use already developed program materials at a fraction of the cost of developing these materials from scratch. Staging of Program Elements, Program Ramp Up & Implementation Options: The staging or "phasing in" of various program strategies will be a critical component to both the program design and ultimate program execution. As FCU has hopes of launching elements of the program in time for the fall 2005 lighting season, which the APT/EFI team believes is achievable, identifying both short term and long term strategies will be one of the first elements that we will focus on. To launch the program this fall we will look to design a limited promotion in conjunction with select area retailers that currently have product availability, and the motivation to become actively involved with the program. Our goal will be to coordinate efforts with EPA's national Change a Light, Change the World Campaign and leverage the use of materials and other resources that will be available. In looking at the staging of elements and ramping up for the longer -term program, based on budgets and required resources, we will work to identify those strategies that can be implemented and managed most effectively and efficiently. As certain program strategies are much easier to manage and control from a timing and budget perspective, it will be appropriate to look at such strategies first in order to achieve short-term program successes, which can be built upon to better facilitate greater industry and customer participation in a longer -term strategy. Examples of some options include short-term special events at retail locations staffed by program personnel, limited time special promotional offers run through retailers, participating in local community events, and if possible, utilizing FCU bill messages to drive customers to designated retailers to purchase products. These are only a few of the options available. If incentives are used, we will design an approach that can allow for matching or in -kind support from industry such as a manufacturer mail -in coupon to be piggybacked onto any FCU incentive or placement in a retailer circular to help market the promotion. Designing the final long-term approach will depend on the probability that the program will grow to include other regions. We realize that this may not be determined in the foreseeable future and that there is the chance that it will remain an FCU only program. Either way, we are 5 APT/EFI Proposal to Fort Collins Utilities -RFP P990 Residential Lighting Program Design Services confident that we will be able to design and structure a program that will meet FCU goals and requirements. This leads to another important element that we have already begun considering, which is the use of FCU employees to assist in implementation of the program. As implementation of these programs is sometimes underestimated, it is paramount for any entity considering offering such a program to understand that it does and will require a significant effort to be effective. As mentioned above, the $80,000 budget estimate (at the high end) could be easily exhausted by a modest implementation effort, without even taking into consideration any program incentives. The availability of FCU staff will play a critical role in the ultimate strategy suggested for program rollout, ramp up, and ongoing support. The reality is that unless additional resources are available, or the program is delivered in a short period and then stopped (which, by definition, would preclude it from being described as a market transformation initiative) FCU will not be able to implement a long-term program by relying solely and extensively on outside contractors. FCU personnel will need to play an important role in providing retailer training and support, promotional event implementation, and ongoing program oversight. Establishing Realistic Goals and Program Costs: The APT/EFI team is aware of the need to establish realistic long-term and short-term goals and anticipate costs of all program implementation elements. Many of the factors presented throughout this proposal play a key role in defining both goals and budget allocation across the program. There are a number of ways to arrive at goals and budgets and although it has been stated several times already, ultimately this task will largely depend on the objectives and regulatory requirements of FCU. Based on the RFP, these objectives clearly point to a sustainable market transformation strategy, but one that will be targeted exclusively to FCU customers. In order to establish goals based on this objective, we will need to look at what level of market penetration/sales of efficient lighting products can be realistically expected from FCU customers exclusively. Establishing reasonable and realistic goals and budgets will be determined by a number of other factors that include: • Making an educated assumption on the total participation rate that may be expected by FCU customers. In other words, of the approximately 53,000 households served by FCU, what percentage do we estimate will participate in the program and how many products on average will each customer purchase? • Are incentives to be offered? If so, the goals will more likely be higher than if incentives are not offered. This will also dictate which program elements budget dollars will be primarily allocated to. If money is not being spent on rebates, more funds are available for marketing and consumer education, and visa versa. • Various retailers will be more or less likely to participate in the program based on which program design FCU ultimately decides to adopt. It is important to note that some retailers are unable to participate under certain strategies (example: Wal-Mart and Sam's Club will not participate in programs utilizing instant rebates) • What range of products and price points are available at these retail locations? As the most active retailers will be DIYs, mass merchants and potentially wholesale clubs that sell a large volume of multi -pack products, these products have the potential to greatly impact goals and budgets. • How will FCU need to track and report program results? Will it be based on increased market share of products in retail, sales of products derived from participating retailers, coupon redemption, or some other metrics? The final decision will have a significant impact on goals and program costs, as it will dictate strategies as well as program dollar commitments to capture and report results. 0 APT/EFI Proposal to Fort Collins Utilities -RFP P990 Residential Lighting Program Design Services The APT/EFI team will bring FCU our experience and history of working through these same issues to define goals and program budgets that are based on practical experience and realistic expectations. Market Penetration & Assessing Local Attitudes about Efficient Lighting: Given the limited budget for FCU's Residential Lighting Program, it is unlikely that the APT/EFI team will advise FCU to invest appreciable resources into doing extensive market penetration or consumer attitude surveys or studies. The Ecos baseline study clearly demonstrates that the market for energy efficient lighting products in the Fort Collins area is immature. Local retailers do not currently promote the products; local consumers do not demand the products, with the end result that few products are purchased. The most important immediate program objective is to stimulate activity through the use of incentives and strategic marketing. Abuzz' needs to be created that will persuade some retailer or retailers that they should get involved with the program because it may lead to opportunities they don't want to miss - and, of equal importance, which they don't want their competition to benefit from. The road virtually every successful lighting conservation program has followed is paved with the anxieties of industry and consumer participants who did not want to miss out on something that might strengthen their competitors. Ideally, an assessment of the degree to which the market penetration of energy efficient lighting products has increased in the Fort Collins area can be demonstrated by a comparison of retailer sales data prior to the launch of the program, and at various intervals after the program has been launched. Getting sales data from most retailers will prove to be a difficult, if not impossible task. Sales data from major retailers, however, such as Home Depot, probably can be obtained relatively easily from the companies that supply them with their CFLs (TCP, which makes the private labeled Commercial Electric branded CFLs for Home Depot, is the primary supplier, although some Home Depot stores carry other brands, such as Lights of America and Philips.) If FCU elects to use some upstream buy -down and markdown promotions as a component of its lighting program, a criteria for selecting which manufacturers and retailers it selects could be the provision of supplying pre and post promotion sales data. The Ecos baseline study did not survey consumers directly, so if FCU wanted to determine how its customers attitudes about energy efficient lighting changed as a consequence of the program it is planning to implement, it would be required to do a survey or study within the next 2-3 months, as well as a survey at some future date after the program was well into its implementation phase. This would likely be an expensive endeavor, with perhaps dubious benefit to FCU. The obstacles inhibiting energy efficient lighting products from capturing a greater share of the lighting market in Fort Collins than they presently have are almost assuredly the same obstacles that have been identified in many other regions of the country - i.e., the bulbs cost too much, they look odd, and might not easily fit into some standard household fixtures, they produce an unattractive light, and so on. The APT/EFI team has extensive experience through current program implementations across the country to assist FCU in designing a program that addresses these common customer concerns. There may be merit to trying to evaluate consumer attitudes about efficient lighting after the program has been implemented, and had an opportunity to take hold in the community. Perhaps the evaluation could be done inexpensively if it were carried out in conjunction with planned promotions or events where FCU or (contractor) program staff could administer the surveys. Or, FCU could use its Community News messages to request customers answer survey questions, either using a mail -back card, or calling a toll free number, or responding to an on-line survey. (A free CFL could be offered to people who participate.) 7 APT/EFI Proposal to Fort Collins Utilities -RFP P990 Residential Lighting Program Design Services Identification of Products to be Promoted: An important consideration in designing FCU's Residential Lighting Program will be identifying what products FCU wants to promote, and how intensively it wants to devote resources to promoting those products. The major opportunities for FCU to realize significant immediate energy savings will revolve around strategies to promote sales of CFLs. Promoting ENERGY STAR qualified CF fixtures should be a longer range objective of the Program, to be pursued if other regional sponsors of an ENERGY STAR lighting program can be recruited to work with FCU, allowing budgets to be expanded and target markets to be enlarged. As the baseline study concluded, there is no real infrastructure in place presently to distribute energy efficient lighting fixtures. An initial Program Year goal might be to begin the development of such a sales/distribution network for ENERGY STAR lighting fixtures. Another product related concern the RFP indicates it would like the design consultant(s) to consider is how to best address concerns about ENERGY STAR lighting product quality. The APT/EFI team has extensive experience confronting this issue. Certain program designs will give FCU more'leverage'than others in trying to convey the message to the lighting industry that high product quality is an important priority of the Program. Upstream approaches, such as manufacturer buydowns or retailer markdowns, allow specific products to be promoted, or excluded from promotions (even if they are ENERGY STAR qualified). Midstream and downstream approaches cannot easily exclude ENERGY STAR qualified products from receiving incentives, assuming the Program is using incentives, without creating a great deal of confusion and frustration among FCU's customers, and their trade allies. In the Northeast's Lighting Programs, sponsors have elected not to permit CFLs to be included in buydown or markdown promotions if they have failed PEARL tests, even if DOE has not considered the particular PEARL tests results actionable (at least as yet), and has not de -listed the bulbs. Where in-store coupons are being used, however, the only eligible criterion a product must meet is that it is ENERGY STAR qualified. Building Consumer Awareness; Marketing and Education: The baseline retail survey prepared for FCU by Ecos Consulting suggests that consumer awareness of energy efficient lighting products, and the benefits they provide, is minimal in the Fort Collins area. Clearly, FCU would like to see the awareness level raised. The process of designing a Residential Lighting Program for FCU will need to evaluate what the preferred approach to building customer awareness is. Does the program want to emphasize creating market pull through attractive incentives, or does it feel a more sustainable strategy needs to be based on creating a strong market push — i.e., developing consumer demand for energy efficient lighting products that area retailers will need to respond to? Most successful regional lighting programs have relied heavily, particularly in initial years, on market pull strategies. Retailers love being able to offer deals, consumers love being able to take advantage of deals, even if the actual benefits of the deals remain somewhat obscure to them. If FCU needs to demonstrate to its regulators/overseers that its programs are 'cost-effective,' it might need to be able to document actual product sales rather than more nebulous metrics such as `heightened consumer awareness,' or even increased presence in the area market of certain types of products. A marketing and communications plan is a common component of all Residential Lighting Programs that APT and EFI are helping or have helped clients implement. This could include many different elements such as the design and production of Program POP, the development of newspaper, radio or TV advertising spots or campaigns, Public Relations activities, and cooperative advertising with retail and/or manufacturer partners. Because the budget for the FCU program is limited, the APT/EFI team is likely to suggest that marketing/communication funds be employed only for very targeted purposes. Producing strong POP materials will be essential to give ENERGY STAR lighting products much greater visibility in APT/EFI Proposal to Fort Collins Utilities -RFP P990 Residential Lighting Program Design Services area stores - not only to customers, but to store personnel as well, who hopefully will become important allies in promoting these products. As a municipal utility, FCU is likely to have a number of methods of communicating with its customers that other utilities might not have. It can use the City News inserts distributed with utility bills to provide information about promotions, and the program in general. It can place notices on the Channel 27 cable station and/or produce (perhaps with the help of a local school A/V department) a cable access show demonstrating what compact fluorescent bulbs are, where and how they can most effectively be used in homes. Print, radio and television media may have to be used only selectively, both because of cost considerations, and because it may be difficult to restrict information about the program getting to people who live outside of FCU's service territory. (Restricting program benefits to FCU customers is a design parameter which we are assuming is important to FCU.) Because Fort Collins is one of the largest cities within a fairly large geographical radius, there should be opportunities to get 'free' media coverage of planned special events. A local retailer and FCU could join forces to stage a special `Change A Light' fall weekend promotion, and through contacting local press and media encourage local coverage of the event. In addition to providing CFLs at a reduced cost, customers might be encouraged to turn in halogen torchieres (300w - 500w fixtures) in exchange for compact fluorescent torchieres (55w - 78w) which they could buy at a subsidized price. APT and EFI have helped implement dozens of `torchiere turn -in' events over the past six years, collecting over 100,000 halogen torchieres. These events can be particularly 'telegenic,' as turned in halogen torchieres can be used to literally fry eggs. Manufacturer Participation: The APT/EFI team can unequivocally state that a FCU lighting program will be able to take advantage of the relationships we have developed over the past decade with every major manufacturer of ENERGY STAR lighting products, working closely with them to plan and execute a myriad of promotions to help boost sales of their products. We have a long track record of working with manufacturers to implement successful promotions that have directly benefited their bottom lines. They may prefer some program designs over others, or perceive some opportunities to be more promising than others, but they have confidence in our ability to see that they are fairly treated and supported in whatever processes we encourage them to become engaged in. Because the budget for the FCU lighting program is small, the APT/EFI team is likely to recommend that any `major' promotions involve only one to three manufacturers, to avoid diluting the leverage the program will have with the manufacturer to request reduced pricing and cooperative marketing (advertising/communications) funding. This is not to suggest that other manufacturers be excluded from working with the program, or that their ENERGY STAR lighting products could not qualify to receive incentives, but the program can support the launching of only several major `campaigns' or promotions with an objective of creating high volume sales activity for a specified period of time. The APT/EFI team has developed numerous industry RFPs, soliciting proposals from manufacturers and retailers to become involved in special promotions of ENERGY STAR lighting products. We also have developed contractual documents defining the terms and conditions under which these promotions are implemented - which specifically address the roles and responsibilities of all parties (i.e., sponsors, program contractors, manufacturers, and retail partners). If our team is selected to work with FCU to design its Residential Lighting Program, it will have the benefit of the time and effort we have devoted to developing these documents for other programs we are implementing. N APT/EFI Proposal to Fort Collins Utilities -RFP P990 Residential Lighting Program Design Services Retailer Outreach and Support: Another common component to most, if not all lighting market transformation programs is Retailer Field Services. This component focuses on the enrollment, training, and ongoing support of all retail partners. Some key elements to field support include distributing program Point of Purchase (POP) materials, training sales associates and other store personnel, providing updated information on products and program status and maintaining interest and participation in the program. Field Support, whether provided by an outside contractor or FCU personnel, is a critical and necessary component to a market based program. As lighting products represent only one line of a range of product lines carried and sold by most retailers, without continued presence and support from the program, active ongoing participation will be difficult to maintain. The APT/EFI team has reviewed the Market Baseline Study completed in March and has also compiled a list of most, if not all, potential retail participants within the Fort Collins city limits. Fort Collins appears to have an existing retailer infrastructure that is very well suited for an ENERGY STAR Residential Lighting Program. There is a good mix of local, regional and national retailers within FCU's territory, which will make them good candidates for program participation. In total, our team has identified 70 retailers as potential participants in a home products program. Of these there are 62 lighting retailers and 11 appliance retailers (three sell both lights and appliances). We have categorized all identified retailers as follows: Ughltkvl ^M Department S Department 2 Discount 3 ' DIY DIY Independent fi : Drug 11 Wholesale Club 1, Grocery6 Hardware 9 Wholesale Club i Lighting Specialty 1 Please note that there may be additional retailers not yet identified and also that of the total identified, particularly for lighting, participation is not likely to be 100%. The final design of the program, and established operational protocols, will dictate which retailers elect to participate, and which do not. Also, some retailers will simply be more aggressive, and willing to entertain implementing new and different types of promotions, or initiatives, while others will not be inclined to get involved with anything that might require them to do business in a manner they are even remotely unfamiliar with. Given the modest program budget, it will be necessary, if not optimally desirable, to work with a subset of the retailers in Fort Collins' service territory. Targeted Financial Incentives: As stated in the RFP the selected vendor will work with FCU to provide information and recommendations on the practical and effective approaches for targeted financial incentives (if needed). Although this determination is part of the actual program design to be undertaken, our experience tells us that some form of incentive should be considered to maximize program effectiveness and generate consumer and industry participation and support. The APT/EFI team has extensive experience planning and implementing programs that utilize the full array of incentive strategies that have been incorporated into program structures throughout the country. If selected, we will provide FCU with insight and hands on knowledge in implementing these 10 APT Peter Feroli's Background Began career in the energy efficiency industry in 1989 working for an Investor Owned Utility, Eastern Utilities Associates, during the early years of utility implemented Demand Side Management programs. Then worked in the ESCO industry for EUA Cogenex Corp. from 1993 to 1996 overseeing monitoring and verification activities on large energy conservation performance contracts Returned to the utility industry in 1996 and managed several residential sector Market Transformation initiatives including, lighting, appliance and new construction programs Was an original member of the Northeast Appliance and Lighting Working Group playing a primary role in the design, development and evolution of the ENERGY STAR° Lighting and Appliance Programs implemented in New England currently APT/EFI Proposal to Fort Collins Utilities -RFP P990 Residential Lighting Program Design Services various strategies and will recommend a realistic approach that will best fit the Fort Collins marketplace and FCU budget constraints. The use of incentives/rebates for the purchase of qualified product has and continues to provide for some interesting debate among program sponsors. The vast majority of efficient lighting programs have used product incentives for many years to varying degrees in conjunction with marketing and education/awareness strategies. There are some programs that have chosen not to use product incentives while focusing solely on consumer education and building public awareness on the benefits of energy efficient lighting products. Awareness and education campaigns, without product incentives, tend to be employed where budgets are constrained. To be candid, these programs have had limited success, as it is difficult to capture the attention of consumers, and industry, without using some form of incentives, particularly for lighting products. Long standing Lighting programs such as the Northwest Energy Efficiency Alliance (NEEA) Although this is a topic that the APT/EFI team could greatly elaborate upon, we will simply state that the use of incentives has led to tremendous progress in moving the CF lighting market to where it is today. Over the past decade, we have seen screw -based CFLs improve in quality while becoming markedly more compact, allowing for them to be used in a much wider array of applications than was the case ten, or even five years ago. Over the same period, there have been dramatic reductions in product prices with increasing presence and availability across a wide retail base. The use of incentives in other regions has aided in the availability of reasonably priced product in areas that have not run programs, such as FCU. This is in large part due to the continued growth and expansion of national retailers who maintain consistent product stock and pricing across all stores nationally, as well as heightened industry competition. As mentioned above, there are a number of incentive/rebates strategies that have and can be utilized by FCU. These strategies include downstream customer incentives such as instant rebates at point of sale or customer mail -in rebates as well as upstream incentives provided directly to manufacturers and/or retailers such as product buy-downs/markdowns. The decision on whether to offer incentives of any type will be dictated by FCU's goals, and the ultimate program budget. A key factor to consider will also include which retailer(s) are targeted to work most closely with, and what price levels they have, or will establish, for selling qualifying products. Our experience has shown that although a large number of retailers may participate in a program, most product sales will come from a small percentage of stores (basically the 80/20 rule). In particular, the national DIYs such as Home Depot, and buying clubs like Sam's Club and Costco, have traditionally accounted for a large share of product sales in Residential Lighting programs. These retailers, as well as mass merchants such as Wal-Mart have dramatically increased their stock of ENERGY STAR qualified lighting products at very aggressive price points. In Home Depot, for example, many regions, including FCU territory, are selling a 6 pack of 14-watt spiral CFLs for $9.97. The use of incentives on these already competitively priced products could account for a huge percentage of sales in FCU territory. We have found that although these products are already priced very competitively, the use of incentives will stimulate customers to purchase products that they may otherwise not be inclined to. In reference to this point, we would like to comment on a statement made in the baseline evaluation report. On Page 27 of the report, when talking about average pricing of products, it states that average pricing of single pack products are most indicative of the overall market and that consumers trying CFLs for the first time will not purchase more than one unit. Although this may be true in some cases, APT/EFI suggest that given the increased market presence of products, particularly multi -packs aggressively priced at large mass merchants, DIYs and wholesale clubs, that this assumption may not be completely accurate. In fact, in these locations, where the average price of a single bulb may be over $5.00, the ability to purchase multi -packs of CFLs at prices averaging about $2/bulb is quite attractive. 11 APT/EFI Proposal to Fort Collins Utilities -RFP P990 Residential Lighting Program Design Services In other areas we have run promotions on these same multi -packs using an instant rebate of $1.00 per bulb with tremendous success. Also in this section, it states that the critical price point necessary for consumers to consider using CFLs is $10.00. We suggest that $10.00 is extremely high and reflects the market conditions of 4- 5 years ago. Even in a less mature market such as FCU, current readily available product is already below this $10 price point and we would suggest that a more realistic target price point for greater consumer acceptance is more in the lines of $5.00 or less. Listed below are brief descriptions of the most common incentive strategies utilized in most energy efficient lighting programs. Although these are distinct strategies, it is important to point out that a final program design may call for a blended incentive approach that could include either a combination of the following approaches customized for FCU territory. Downstream (Customer) Incentives: Instant Rebate Coupons: As the name suggests, instant rebate coupons are redeemable at the point of sale by the customer with the dollar value of the coupon subtracted from the initial price of the product. Instant rebates have been used extensively in several programs as an everyday program offering as well as for limited time special promotions. The use of instant rebates requires the most effort and commitment from a retailer to participate. As the customer discount is applied at the point of sale, the retailer is responsible for giving the customer the rebate and submitting all coupons to a pre -determined fulfillment house for payment. In addition, as the rebate is good only on a particular product SKU or family of products (i.e. ENERGY STAR qualified bulbs, fixtures, ceiling fans), it is the retailers' responsibility to ensure that rebates are only honored on qualified products. Like most utility -based efficiency programs, FCU wants to minimize costs associated with subsidizing non-FCU customers. The use of an instant rebate program allows for the collection of customer specific data (name, address, and phone) and will require the retailer to screen all customers using the coupon to ensure they live in FCU territory. If instant coupons are considered, the program material should clearly state that in order to receive payment on redeemed coupons, participating retailers must ensure that only qualified product is being sold and that only FCU customers are receiving the rebates. The use of instant coupons does require a significant amount of retailer training and support from program staff to better ensure industry participation and program requirement adherence. Given the modest budget currently anticipated by FCU, this strategy may prove useful for a limited time promotion with a select retailer, but may not be practical as a long-term strategy. Even with the strongest retailer training/support component, it will be impossible to avoid and control non-FCU customers from participating. Given this, in order to attract and retain retailer participation, a predetermined acceptable margin of error should be established for retailer coupon submittals. The team has extensive experience in establishing such program components and could work with FCU to determine an acceptable range of non-FCU customer participation. 12 APT/EFI Proposal to Fort Collins Utilities -RFP P990 Residential Lighting Program Design Services A few examples of the Pros and Cons of Instant Rebates are: Instant Rebate Pros Instant Rebate Cons Ability to generate greater sales due to instant Require much greater retailer commitment than customer discount other incentive strategies Ability to capture customer and product A significant number of potential retailers may information for verification purposes not participate due to the "hassle factor" Serves as a program marketing and consumer Requires more program resources to provide awareness tool at retail. ongoing training and support to participating retailers Per rebate processing fees can be costly, although costs may be mitigated by allowing coupons to be used for multiple product purchases Mail -In Rebate Coupons: Like Instant rebates mail -in rebates serve as a form of program promotional material and allow for capturing product and customer specific data. Mail -in rebates can be provided at retail or can be sent directly to FCO customers through a bill insert. Unlike instant rebates, the discount is only received if and when the customer mails the coupon in for redemption. As this discount is not give by the retailer, mail -In rebates present fewer barriers for a retailer to implement. They also require less retailer effort and can allow for retailers not able or willing to use instant rebates to participate in the program. As the customer must still pay the full retail price at the point of sale, mail -in rebates generate far less volume than do instant -coupons. They do however, serve as an effective tool to induce a customer purchase and can allow for a continued presence at retail with less program budget exposure. This is particularly important for a program with a limited budget, such as FCU. Manufacturers have historically used mail -in rebates to help encourage the sale of a product with the expectation that only a small number of customers wiff actually redeem the coupon. This is known as the "breakage rate" (i.e. the percent of coupons that never get redeemed by the customer). Depending on the dollar value of the rebate offer, breakage rates can be 90% or higher. While this is attractive for a manufacturer who's primary objective is to sell as much product as possible while minimizing the number of coupons they honor, it can pose a problem for energy efficiency providers who need to account for sales based on coupon redemption to prove cost effectiveness. With instant rebates, nearly all customers who purchase the product will take advantage of the immediate discount. This allows the program to account and claim savings for all or nearly all sales. With mail -in rebates, program sponsors have generally not been able to claim savings or sales of product unless there is a redeemed coupon associated with it. Due to large breakage rate on mail -in coupons, the true impact of the program may be difficult to assess. 13 APT/EFI Proposal to Fort Collins Utilities -RFP P990 Residential Lighting Program Design Services A few examples of the Pros and Cons of Mail -In Rebates are: Mail -In Rebate Pros Mail -In Rebate Cons Serves as a program marketing and consumer Do not generate as many sales as instant awareness tool at retail. rebates Promote greater sales of product with less Have low redemption rates, which may under - program budget impact represent the program impact for utilities Ability to capture customer and product Rebate processing fees are the most expensive information for verification purposes on a per unit basis Are less burdensome on retailers and allow for more retailers to participate in the program Upstream (Manufacturer/Retailer) Incentives: Upstream incentives have become extremely popular over the past few years in programs implemented in the Northeast and California and are currently beginning to be implemented in programs in the Midwest and Northwest. As opposed to downstream strategies, upstream incentives are provided directly to a manufacturer or retail partner with the goal of lowering first costs of products and passing the savings on to the customer. Upstream incentives can take several forms, which include product buy -downs and product markdowns. Other lesser -utilized strategies include cooperative advertising incentives, and stocking/display incentives. To date, the most prevalent and widely used of these strategies has been product buy -downs. When implementing these initiatives it is very manageable to work directly with a selected manufacturer and/or retailer on a specific promotion, however, in other programs, these initiatives have been negotiated and selected through a competitive solicitation to industry. This allows access of participation to all potential partners and provides a justifiable selection process for a program sponsor. This may be particularly important to FCU as a municipal utility. Through a solicitation process, program sponsors can request specific requirements from industry that are important to the program. These may include product type, wattage, PEARL testing history, to list several examples. Given the size of FCUs territory and the relatively small budget, the APT/EFI team will look at upstream strategies such as product buy -downs and markdowns as an a potential opportunity for targeted promotional periods. Both of these strategies lend themselves well to leveraging industry resources and can be tied in with national promotions such as ENERGY STAR's Change a Light or can stand-alone as an FCU specific program. Product Buy -Downs: Product Buy -Downs focus primarily on working with manufacturer/retailer combinations with manufacturers taking the lead role and assuming the responsibility for implementing the program in accordance with program sponsor requirements. Through a buy -down, the program pays the manufacturer a per unit incentive to reduce the wholesale cost of a product to the retailer. The retailer then sells the product at a markup from the reduced wholesale price. The Following example uses FCU as the program sponsor and illustrates the basic process behind a buy -down: Regular Mfg. FCU Adjusted Retail Price Wholesale Price Contribution Wholesale Cost to Assuming a 30% Retailer Markup $2.50 $1.50 $1.00 $1.30 Although you cannot dictate final retailer selling prices, the program can suggest a final price point. As the suggested strategy would call for a competitive RFP, FCU would have the opportunity to review all detail, including suggested retail price as well as any additional discounts and/or marketing contributions the lighting industry is offering to provide. 14 APT/EFI Proposal to Fort Collins Utilities -RFP P990 Residential Lighting Program Design Services Through the use of product buy -downs, programs have had great success introducing energy efficient lighting products into new retail market channels while moving significant numbers of bulbs with a low administrative costs to the program. Unlike downstream coupon strategies, buy - down approaches do not typically allow for customer specific data to be captured. It would be virtually impossible to preclude non-FCU customers from purchasing incentivized products. Additionally buy -downs require the program to pay a substantial portion of the total agreed to incentive upon shipment and receipt of product. In essence, payments are pre -paid for expected sales to the end customer. At a minimum, all shipping and receiving documentation should be required to prove delivery and initiate payment. Some programs hold back a percentage of funds from manufacturers until official point of sale data is received from the retail partner to prove sales of product. Executing a buy -down strategy can be quite complex. On one hand, buy -downs have the greatest ability to move large quantities of product at reduced administrative costs. On the other hand, without thorough up -front planning and a high level of ongoing oversight it can be very difficult to provide full and thorough data to satisfy regulatory requirements. APT and EFI have a comprehensive history with buy -down promotions having been involved in the implementation of approximately 400 such initiatives. A few examples of the Pros and Cons of Product Buy -Downs are: Product Buy -Down Pros Product Buy -Down Cons Able to move large quantities of product Little ability to track program sales to the customer level Lower incentive processing costs than coupon Data tracking and collection of shipping, programs receivingand sales data can be difficult Ability to enlist a greater diversity of retail Requires significant up -front, ongoing and outlets in the program back -end management and oversight Customer may not realize that reduced pricing is being offered by program sponsor. As there is not coupon to fill out customers may not notice si na a from program Product Mark -Downs: Similar to Buy -Downs, markdowns are an upstream incentive strategy that can be implemented either on targeted basis or through a competitive solicitation process. As buy -downs provide incentives directly to the manufacturer to reduce the wholesale price of products, markdowns focus on working directly with retailers to reduce the end retail price of product. A markdown is structured to provide a participating retailer a per unit incentive for all sales of a particular product during a specified promotional period. As a buy -down requires up -front payment of incentives prior to actual sale of products, markdown promotions only pay incentives after product has been sold and the retailer has provided supporting sales documentation to the program. The Following example uses FCU as the program sponsor and illustrates the basic process behind a markdown: Retailer Pays Normal Retail FCU Retail Price Normal Price Contribution After Program Wholesale Price Assuming Markdown a 30% Markup $2.50 $3.25 $1.50 $1.75 15 APT/EFI Proposal to Fort Collins Utilities -RFP P990 Residential Lighting Program Design Services Markdown programs rely much less on manufacturer involvement than do buy -downs. As long as a retailer carries qualified product and is willing to reduce the price and submit sales data for payment of the incentive, they can participate. Although this sounds relatively easy in concept, it can be very difficult to get a retailer to commit to this structure. Retailers participating in lighting programs, particularly large national or regional chains rely heavily on manufacturers to do most or all of the legwork associated with upstream incentive programs. They typically don't have the time, experience or resources to fully commit to the requirements of this type of program. Of primary concern to retailers is the need to adjust their internal computer sales systems to account for the same product having a different price in a subset of their stores. We are learning that this is not impossible to overcome, but it is a factor that limits participation. Like buy -downs, markdowns will not provide customer level data for verification of sales to FCU customers. Unlike buy -downs, they require less tracking and verification as product is shipped and received through normal distribution channels without having to track and verify bought - down product that was prepaid for. A few examples of the Pros and Cons of Product Markdowns are: Product Markdown Pros Product Markdown Cons Able to move large quantities of product Little ability to track program sales to the customer level Lower incentive processing costs than coupon Slightly higher product price than with buy - programs downs not such a bad thin Program only pays for product that is sold to Potential for lack of retailer acceptance and the end customer based on official store sales ability to participate data reports Customer may not realize that reduced pricing is being offered by program sponsor. As there is not coupon to fill out customers may not notice si na a from program Minimizing Non-FCU Customer Subsidization: APT and EFI are aware of FCU's desire to minimize customers outside of FCU territory being subsidized through this program. As mentioned earlier, there is no strategy that will prevent this from happening with absolute certainty. Any market -based program, by its very nature struggles with this situation. In order to minimize problems, the APT/EFI team will work with FCU to weigh the pros and cons of each possible approach against FCU's need to track and report sales only to their customers. As noted above, coupon programs (particularly mail -in) have a much better built in mechanism to track and enforce this requirement than to buy-down/markdown strategies. The upstream programs however have the greater ability to generate higher sales. The selected strategy needs to consider, FCUs tolerance level for outside territory sales may dictate which retailers the program targets for participation as well as what incentive strategy, if any, will be utilized. Regardless of these decisions, one element that will need to be undertaken by the program is training and education of retail partners. A clearly laid out program participation manual should be developed stating the requirements of participation and the rules of customer eligibility. Even if the rules are not strictly enforced, the requirements can serve as a "stick" to ensure that retail partners use due diligence in ensuring proper program participation. Staging Special Events and Promotions: Another potential program design component that the APT/EFI team will include in our work for FCU will be the staging of special events and promotions that may be implemented to heighten 16 APT/EFI Proposal to Fort Collins Utilities -RFP P990 Residential Lighting Program Design Services awareness and participation in the program. Special events can be implemented at retail locations, home shows, community fairs, and/or other venues. Special events typically include staffing a table or booth with program literature and displays, such as lighting display where customers can compare the light output and energy usage between incandescent and CFL technology. These events can be run in conjunction with campaigns such as Change a Light, Change the World and are very effective in face to face educational opportunities with customers. If done at a retailer's store, these can also serve as low cost options for outreach and product sales and can be advertised in local papers as well as through bag stuffers at the retail location prior to the event. Events can be done on a one -day or multiple -day basis and allow for program staff to actually assist the store in selling product. These events may offer the program the opportunity to do special incentives specific to an event where program staff can also screen customers to ensure only eligible FCU residents receive program subsidization. Fluorescent Lamp Disposal / Recycling Considerations: Fort Collins residents are fortunate to have access to a solid waste disposal and recycling facility (The Larimer County Landfill) that will accept a variety of household hazardous waste materials, including used fluorescent lamps. For residential users of the facility, there is no charge for this service, and collected bulbs periodically will be shipped to a recycler. A component of the consumer awareness and education campaign element of FCU's lighting program should address the issue of properly disposing of broken or non-functioning fluorescent bulbs. While acknowledging the mercury content in the fluorescent bulbs, however, FCU should emphasize that the net environmental benefits of using energy -efficient bulbs. Mercury emissions from fossil fuel burning plants far exceed the hazards posed by mercury in fluorescent lamps. If the Larimer County Landfill, which we understand is located just south of Fort Collins, is inconvenient for some residents to get to, the Utilities Division might consider allowing bulbs to be dropped off at their municipal offices, or a Department of Public Works facility. (EFI accepts old and broken fluorescent lamps, collecting them in containers which we ship to a lamp recycler when they are full.) In FCU's case, the Utilities Division presumably could make arrangements with the County Landfill to help collect the bulbs. Proposal Summary The APT and EFI team is looking forward to the opportunity of working with FCU and we have attempted to lay out a comprehensive summary of key program design elements and considerations throughout this proposal. We are happy to go through and answer any questions that FCU may have. We hope that we have presented FCU with an outline that demonstrates our understanding of the requested work as well as our ability to provide these services. 17 APT/EFI Proposal to Fort Collins Utilities -RFP P990 Residential Lighting Program Design Services Timeline: In looking at the Timeline of Deliverables and Responsibilities stated in the RFP, the APT/EFI team feels that it is feasible for us to deliver a Final DRAFT Program Plan to FCU by August 27th, which is one week earlier than date called out. The APT/EFI team will coordinate with FCU to establish a final timeline that works for all, but In thinking through the timeline, with consideration to already scheduled commitments, the APT/EFI proposes the following: Deliverable Due Date Comments APT and EFI will travel to FCU - Kickoff Meeting — In Person June 271h — June 29th over the course of a day or two and familiarize ourselves better with the territory and visit retail locations Draft 1 of Plan will contain three Draft 1 of Program Plan Delivered July 22"d feasible options for implementation Discussions between FCU and Draft 1 Feedback Received by FCU July 29th APT/EFI to take place during week Draft 2 of Program Plan Delivered August 12th Discussions between FCU and Draft 2 Feedback Received by FCU August 19th APT/EFI to take place during week Final Plan Delivered to FCU August 27th Program Design Will Include Mid September to Early October Will need to launch prior to actual Intent to Launch Program Elements promotion in order to enroll retailers for fall lighting season and setup program in the field (Change a Light Promotion) 18 APT/EFI Proposal to Fort Collins Utilities -RFP P990 Residential Lighting Program Design Services Staffing & Management Plan: APT and EFI have a long history of working in partnership with one another. Both companies have a philosophy of open collaborative dialog with our clients to ensure clear and effective communication and realistic and attainable program results. As contractors, our approach is always to work within the parameters and expectations of our clients while presenting options and strategies based on our real world practical experience. For the Design of the FCU project, the APT/EFI team will be made up of APT's Director of Efficiency Programs, Peter Feroli and EFI President, Brad Steele. Mr. Feroli and Mr. Steele have over 40 years of combined experience in the design and delivery of energy efficiency programs and will be the two individuals working directly with FCU As a team, EFI and APT represent two of the most experienced companies in this industry in the design and implementation of all elements of market transformation program tasks as requested by FCU. As both Peter Feroli and Brad Steele will be working closely on all aspects of this program with FCU, we haven't identified either company as the Prime Contractor and FCU will have open access to either Peter or Brad whenever required. The roll of both APT and EFI will be to work together and in collaboration on each program design element. For administrative simplicity, and to allow for one point of contact for FCU, APT's Peter Feroli will serve as the primary contact. Invoicing for services will also be handled through APT. As mentioned, both Peter Feroli and Brad Steele will be available for direct contact by FCU at any time. For Peter Feroli and Brad Steele's resumes see Appendix 2 Contact Information: Peter Feroli Director of Efficiency Programs Applied Proactive Technologies, Inc 1242 Main Street Springfield, MA 01103 Office phone: 413-731-6546 Cell phone: 413-246-0554 Email address peter@appliedproactive.com Brad Steele President Energy Federation, Inc 40 Washington Street Suite 2000 Westborough, MA 01581-1013 Office phone: 508-870-2277 Cell phone: 781-775-3712 Email address: bsteele@webhost.energyfederation.net 19 APT/EFI Proposal to Fort Collins Utilities -RFP P990 Residential Lighting Program Design Services Qualifications: The APT/EFI team has extensive experience implementing market driven energy efficiency programs for utility clients. These programs have promoted a variety of energy efficient technologies, with lighting generally being a cornerstone of the programs. (For an Abbreviated Statements of Qualifications of both APT and EFI see Appendix 1) Similar ENERGY STAR Lighting Experience As stated above, APT currently implements Residential ENERGY STAR Lighting Programs in Maine, New Hampshire, Connecticut, Rhode Island, Long Island, Illinois, Montana, Idaho, Oregon, Washington and Arizona. We also manage a process through the California Energy Commission to promote ENERGY STAR fixtures with Lighting manufacturers as well as working for the EPA on their Retail Store Level Assessment Project which includes evaluation of Lighting retailers throughout various regions of the United States. EFI currently is helping to implement Residential ENERGY STAR Lighting Programs in all New England states, Long Island and upstate New York, Wisconsin, Minnesota, and Illinois, and California. EFI provides upstream (manufacturer), midstream (retailer) and downstream (consumer) incentives depending upon the design, goals, and strategic approaches of the programs we are administering. They also provide fulfillment services for a number of utility clients, making ENERGY STAR qualified lighting products available to their customers through direct marketing (e.g., catalogs, or offers presented through bill messages) and on-line offerings. Industry Incentive Program (IIP) Experience APT is the industry leader in the design, management and implementation of the IIP process envisioned by NIEP/MEEA. APT has been implementing IIPs for the NEEP program sponsors since they were first introduced in 2002. To date, APT has directed over 400 IIPs, which have been, or currently are in the process of being implemented. Over the past two years, we have worked with program sponsors to modify and enhance the IIP process to better meet the goals of our clients and are without question the most experienced firm in the industry in implementing these types of initiatives. EFI has worked closely with APT and utility clients to administer IIPs. EFI is responsibly for collecting, tracking and reporting product shipment and sales data. This is done on a promotion basis, a manufacturer and retailer basis, down to a product and store level. EFI pays incentives to industry, and allocates costs (and savings) to clients, or sponsors, based on where product sales occur. Clients do not incur costs until industry participants have demonstrated compliance with program `proof of performance' requirements, and have received incentives from EFI. Data Management and Tracking Experience An essential part of every program that APT and EFI implement is the creation, management and utilization of databases and tracking systems. APT and EFI have extensive experience developing and utilizing comprehensive data tracking systems to help manage all aspects of the IIP process. APT uses an ACCESS database to track all Field Representatives' daily activity when they are conducting retail site visits. It effectively and efficiently helps APT manage, collect, record and analyze market data. It also includes extensive retailer participation information. APT site visit forms collect information on advertising participation levels, program material distribution, sales and inventory data (confidential) in addition to all aspects of ENERGY STAR qualified lighting product information. Retailer comments and concerns, attitudes and behaviors in regards to marketing and promotional activities are also recorded. APT often works with evaluation 9E APT a Bradley Steele's Background (cont.) Helped design and implement many of the first residential programs in the country promoting energy efficient lighting — primarily in the Northeast and Midwest Jointly developed the first compact fluorescent torchiere to be sold commercially (customer was Harvard University, which ultimately purchased about 15,000 units) ip Authored three papers presented at ACEEE conferences. Two on residential lighting and one which analyzed sales and returns information for more than 500,000 orders for energy efficient bulbs and fixtures which ER had processed APT/EFI Proposal to Fort Collins Utilities -RFP P990 Residential Lighting Program Design Services contractors (Nexus, ODC, XENERGY) in supplying this information on a client's behalf, to generate baseline, progress and trending studies in areas of market share, market transformation and consumer behavior. EFI uses a Paradox database platform structure to collect, track and report all transactional activity that involves or impacts the issuance of incentive payments - either to a consumer, a retailer, or a manufacturer. In the past three years alone, EFI has issued incentives for more than 9 million ENERGY STAR products, paying more than $50 million of incentives on behalf of program sponsors, or clients. The software programs EFI has designed to manage programs has numerous, tested quality assurance routines and procedures built into them to insure that client funds are spend in accordance with program guidelines. EFI is able to provide clients with information in detail and summary, in hard copy or electronically. Increasingly, EFI is putting data on a password protected section of our Website, where it can be accessed at any time by our clients. Field Experience APT is without question the most experienced contractor in the country in providing field implementation for market transformation programs involving manufacturers, distributors, retailers and energy efficiency program sponsors. APT has a long history of implementing regional energy efficiency programs throughout the United States dating back to 1989. APT personnel have enlisted over 6,000 trade allies into the various programs they have implemented. Their Field Personnel have collectively performed over 250,000 site visits. (Please see Appendix 1 for examples of our current program implementations.) APT has conducted thousands of program and product training classes to over 30,000 trade ally sales personnel. They have performed over 1,500 Home Depot product knowledge (PK) classes. They have developed an industry acclaimed "Energized Sales Training" curriculum attended by over 1,000 industry sales associates, sales managers, store owners, district managers, regional trainers, department managers, regional managers, etc. from the appliance, lighting, windows and motors industries. APT has performed thousands of promotional events (lasting 1 to 14 days) at retail locations, home shows, fairs, malls, zoos, parks, even concerts. These events have included torchiere turn - in events, product sales, raffles, door prizes, etc. APT has also pioneered the concept of utility sponsored "Energy Fairs" where utilities showcase all of their energy efficiency efforts. APT leads the industry in educating and guiding manufacturers, buying groups, and retailers into participating in special promotions where they provide funding for co-operative advertising, additional rebates and supplying products on consignment - not to mention free products for raffles and giveaways. Their long-term, national experience in all facets of program design and implementation means that APT has substantial in-house knowledge of past program successes and failures. This hands- on understanding of the many dynamics involved in working with Lighting retailers, distributors and manufacturers will directly benefit NIEP/MEEA in the successful implementation of this program. In conclusion, APT and EFI have a long history of working together in utility sponsored IIP program implementation, fulfillment and reporting. 21 APT/EFI Proposal to Fort Collins Utilities -RFP P990 Residential Lighting Program Design Services Relevant Projects and References We have included these as both relevant projects as well as for references to be used. APT Projects: In all programs listed below, APT has served as the Field Implementation Contractor for the program. This work includes providing ongoing field services, promotion development and implementation, inventory and sales data collection and design and implementation of cooperative industry promotions and events in collaboration with our clients. Proaram: Northeast ENERGY STAR Residential Liahtina & ADDllance Proarams • Sponsors: Connecticut Light and Power, Narragansett Electric Company, Long Island Power Authority • Duration: 1997 to Present • Contact 1: Gary Elliott, CL&P The Northeast Utilities System 66 Curtis Street New Britain, CT 06052 elliogt@NU.COM / 860-832-4961 Contact 2 Stacey Wagner, Long Island Power Authority LIPA 131 South Hoffman Lane Central Islip, NY 11749 swaaner(fteysoanenergy.com / 631-436-5765 Role: Field Implementation Contractor Proaram: Northwest ENERGY STAR Residential Home Products Proara • Sponsors - Northwest Energy Efficiency Alliance, Subcontractor to Portland Energy Conservation Inc. (PECI) • Contact: Lisa Rehbach, PECI 1400 SW 5th Avenue - Suite #700 Portland, OR 97205 Lrehbach(fted.org / 503-248-4636 X206 • Duration: APT has been implementing the NW Lighting and Home Products Programs as well since 1999. The ETD program is a separate program run within the state of Oregon which kicked off in 2004. We have chosen this project to present as it contains an IIP process similar to NIEP/MEEA. • Role: Field Implementation Contractor Program: Efficiency M ine ENERGY -STAR Residential Liahtina Proaram • Sponsors - State of Maine - Public Utilities Commission • Contact: Richard Bacon State of Maine Public utilities Commission 242 State Street Augusta, ME 04333 Richard. Bacon(& maine.gov / 207-287-8349 - • Duration: February 2002 to Present • Role: Field Implementation Contractor 22 APT/EFI Proposal to Fort Collins Utilities -RFP P990 Residential Lighting Program Design Services Program: Illinois ENERGY STAR Lighting Program • Sponsors: Midwest Energy Efficiency Alliance on Behalf of the Illinois Dept of Commerce and Economic Opportunity (DCEO) • Contact: Wendy )aehn or Chris Hahs Midwest Energy Efficiency Alliance One East Erie - Suite 200 Chicago, IL 60611 Wjaehn(dmwalliance.org or chas(atmwalliance.ora / 312-587-8390 • Duration: August 2002 to December 2004. (Program discontinued) • Role: Field Implementation Contractor EFI Projects: Program: Northeast ENERGY STAR Residential Lighting Programs • Sponsor: Massachusetts Electric, NSTAR Electric, Western Mass Electric, Cape Light Compact, Efficiency Vermont; Fitchburg Gas & Electric, Long Island Power Authority • Contact: Kate Ringe-Welch National Grid 55 Bearfoot Road Northboro, MA 01532 Katherine. Ringe(ulus.narid.com / 508-421-7214 • Duration:1999 to Present • Role: Rebate Processing Services and Product Fulfillment Contractor Program: Northeast ENERGY STAR Residential Appliance Program • Sponsors: Massachusetts Electric, NSTAR Electric, Western Mass Electric, Cape Light Compact, Efficiency Vermont; Fitchburg Gas & Electric, Long Island Power Authority • Contact: Derek Kimball NStar One Nstar Way Westwood, MA 02090 Derek Kimball(alnstaronline.com / 781-441-8718 • Duration:1999 to Present • Role: Rebate Processing Services and Product Fulfillment Contractor Program: Wisconsin Focus on Energy ENERGY STAR Residential Lighting & Appliance Programs • Sponsors: Wisconsin Energy Conservation Corp (WECC) on behalf of the State of Wisconsin • Contacts: Sara Van de Grift Wisonsin Energy Conservation Corporation 211 S. Paterson Street - 3rd Floor Madison, WI 53703 sarav(a)weccusa.ora / 608-249-9322 x 160 • Duration: 2000 to Present • Role: Rebate Processing Services and Product Fulfillment Contractor Program: New Hampshire CORE Utilities'nhsaves' Energy ENERGY STAR Residential Lighting & Appliance Programs • Sponsors: Five New Hampshire Electric Utility Companies, the largest of which is Public Service of New Hampshire (PSNH) • Contacts: Jack Schelling Public Service of New Hampshire 780 North Commercial Street Manchester, NH 03101 schelje(a)NU.com / 603-634-2721 • Duration: 2002 to Present • Role: Rebate Processing Services and Product Fulfillment Contractor 23 APT/EFI Proposal to Fort Collins Utilities -RFP P990 Residential Lighting Program Design Services Proposed Compensation and Investment Summary: The APT/EFI Team budget is based on a time and materials cost structure. FCU will only billed for actual hours worked on this project and all expense items will be passed through at cost. We are providing a budget that allows for 2 trips to FCU and have included a line item for general program expenses which includes items such as conference calls and other phone charges, copies, postage and shipping, and other miscellaneous expenses. All efforts will be made to minimize program expenses. The APT/EFI team is firmly committed to providing FCU with the highest level of service at a reasonable price and we are willing to work with FCU to modify our proposal approach if necessary. Proposed Program Budget: Line Item Hourly Rate Labor Hours Total Budget Labor: APT - Peter Feroli $100.00 50 $5,000.00 EFI - Brad Steele $100.00 50 $5,000.00 Labor Total 100 $10,000.00 Program Expenses: Travel - Assuming 2 Trips for 2 People. Includes all flights, hotels, rental cars $2,500.00 and a $40 per diem per person. Total 4 hotel nights Other General Expense such as phone expenses/conference call lines, postage, $500,00 shipping, copies Total Expenses $3,000.00 Total Proposed Budget $13,000.00 24 APT/EF! Proposal to Fort Collin Utilities -RFP P990 Residential Lighting Program Design Services References: See Relevant Projects and References Section Above 25 APT/EFI Proposal to Fort Collins Utilities -RFP P990 Residential Lighting Program Design Services Availability: Both Peter Feroli and Brad Steele are available to work on this project as laid out in the Timeline section above. There are some previously scheduled commitments that each has, but there will be absolutely no problem getting in touch with either or both Peter and Brad during the design phase of the project. We are confident that all work can be completed within the stated time frame we have laid out above. 26 APT Background & Experience: APT is one of the most experienced contractors in the country in providing field implementation services for market transformation programs involving manufacturers, distributors, retailers and energy efficiency program sponsors. APT has a long history of implementing regional energy efficiency programs throughout the United States dating back to 1989 and their personnel have enlisted over 6,000 trade allies and performed over 250,000 site visits in the various programs they have implemented. APT currently implements energy efficiency programs in the Pacific Northwest, Southwest, Illinois and the Northeast. APT's work focuses on market based field implementation efforts and includes retailer/dealer enrollment, store signage placement and maintenance, ongoing retailer training/support, data collection as well as management and industry negotiation activities. APT is in daily contact with large national retailers such as Home Depot, Lowes, Sears, Wal-Mart, Costo and Sams Club as well as with regional chains and independent lighting and appliance stores affiliated with national buying groups such as Ace and TruServ. The work APT performs ranges from visiting individual locations to working with regional managers on upcoming promotional activity as well as national corporate executives on further integrating regional program activity within corporate sales strategies. APT has conducted thousands of program and product training classes to over 30,000 trade ally sales personnel and have performed over 1,500 Home Depot product knowledge (PK) classes. APT also developed an industry acclaimed "Energized Sales Training" class and curriculum attended by over 1,000 industry sales associates, sales managers, store owners, district managers, regional trainers and department managers, regional managers from the appliance, lighting, motors and windows industries. APT has performed thousands of promotional events (lasting between 1 and 14 days) at retail locations, home shows, fairs, malls and other venues. These events have included torchiere turn - in events, room air conditioner/dehumidifier turn -in events, product sales events, raffles, door prizes, etc. APT has also been played the primary role in the development and implementation of client sponsored "Energy Fairs" where program sponsors showcase their energy efficiency efforts to their customers. APT leads the efficiency industry in market based outreach and industry education. They work with manufacturers, buying groups and retailers to enlist participation in special promotions aimed at leveraging industry and client resources. These promotions may include funding co- operative advertising campaigns, getting commitment from industry to supply additional rebates on target products as well as working with industry to come up with creative strategies to enhance program activities. APT's national experience in all facets of program design and implementation allows for substantial in-house knowledge that is drawn on to provide the best practices from programs implemented around the country as well as providing the most up to date industry news and information for their clients On -going Energy Efficiency Efforts: • The CL&P ENERGY STAR Residential Lighting and Appliance Program • The Narragansett Electric ENERGY STAR Lighting and Appliance Program • The Long Island Power Authority ENERGY STAR Lighting and Appliance Program • New Hampshire CORE Electric Utility ENERGY STAR Lighting and Appliance Programs • The Efficiency Maine Residential Lighting Program • The NEEA ENERGY STAR Residential Products Program • The Energy Trust of Oregon ENERGY STAR Residential Products Program • The Northern Illinois Energy Project Energy Efficient Lighting Program • The Illinois Lights For Learning School Fundraiser Program • The Salt River Project - PowerWise Program • MotorUp (formerly The Northeast Premium Efficiency Motor Initiative) • The NYSERDA Premium Efficiency Motors Program • Massachusetts DEP's Recycling Education Assistance for Public Schools Program • Connecticut Municipal Electric Cooperative Lighting Initiative implementation Completed ENERGY STAR / Energy Efficiency Efforts: • The Midwest Energy Efficiency Alliance Illinois ENERGY STAR Lighting Program • The Midwest Energy Efficiency Alliance ENERGY STAR Refrigerator Recycling Program • Program LIPA Edge • LIPA - Watts Going Down • The Southern California Gas High Efficient Gas Water Heater Program • The Southern California Edison "Next Step" Motors Program • The Public Service of New Hampshire ENERGY STAR Appliance Program • The New Hampshire Electric Cooperative ENERGY STAR Lighting Program • Massachusetts Municipal Wholesale Electric Company (MMWEC) ENERGY STAR Lighting and Thermostat Program • NStar Gas ENERGY STAR Thermostats and High Efficiency Gas Water Heater Program • LIPA - Commercial & Industrial (Field Outreach efforts including HVAC measures) • KeySpan Energy Delivery ENERGY STAR Windows, Thermostat, and HVAC Program • KeySpan Energy Delivery High Efficiency Gas Water Heater Program • KeySpan Energy Window Energized Sales Training • Gas Networks ENERGY STAR Thermostat and High Efficiency Gas Water Heater Program Market Research and Evaluation Efforts: • EPA ENERGY STAR Nationwide Mystery Shopping Program • Long Island Power Authority Baseline Study - Lighting (XENERGY) • Long Island Power Authority Baseline Study - Appliances (XENERGY) • Long Island Power Authority Market Progress Report (RMI) EFI Background & Experience: Energy Federation, Inc. (EFI) has been working with utility clients and other providers of energy efficiency programs for the past seventeen years to promote the use of energy saving products. We have helped implement programs offering incentives for energy -efficient products for over thirty clients nationwide. These incentives have been provided for energy -saving lighting products, efficient appliances, heating and cooling equipment, windows, insulation, and water saving devices. For the past six years, EFI has processed all lighting and appliance rebates for sponsors of the New England Energy Efficiency Partnerships' (NEEP) Residential ENERGY STAR® Products programs. We also have processed all lighting and appliance rebates for programs administered by the Wisconsin Energy Conservation Corporation (WECC) and the New Hampshire CORE Utilities, as well as several hundred thousand lighting rebates for the Midwest Energy Efficiency Alliance (MEEA). EFI has issued rebate checks in excess of $150 million for more than 20 million energy -efficient products. We have mailed checks to consumers, to retailers, to salespeople, and to manufacturers. We have implemented programs in which incentives were split between electric and gas utilities, electric and water utilities, and between utilities and manufacturers. We have tracked and reported sales and rebate data for both sponsors and the industry partners contributing toward the overall incentives offered to consumers for their products. EFI has demonstrated an ability to respond to changes in program designs and to the variable activity that rebate programs tend to engender. lighting activity historically has peaked in the late fall and early winter. Appliance program activity tends to peak in the summer with a number of utility clients providing rebates for high -efficiency cooling equipment (e.g., room air conditioners, central air conditioning systems, and heat pumps), as well as `national' clothes washer promotions - "Double Your Savings" in 2003, and "Energy Rewards" in 2004. EFI has processed as many as 100,000 lighting coupons per week in the fall, and as many as 10,000 appliance rebates per week in the summer. Even with high volumes of transactions being processed, we are able to support our clients by fulfilling their informational requirements, satisfying their customers, and meeting the expectations of critical trade allies. Within the past two years, many of EFI's clients, particularly for lighting programs, have shifted from a reliance on in-store, instant coupons, to industry promotions, many of them taking the form of manufacturer product buy -downs. EFI has worked with clients, industry partners, and other program contractors to establish guidelines and procedures for managing these initiatives, and has designed databases to collect, track and report shipment and sales data to enable clients to confidently support claims of program impacts and savings. We have demonstrated the ability not simply to address problems as they arise, but to anticipate them, and to help sponsors avert their unintended, unwanted consequences. While EFI has assisted sponsors in establishing workable program guidelines and rules, we have shown a willingness to be flexible when circumstances, and sponsors' wishes, have dictated that we be flexible. We have helped prevent fraudulent or non -compliant rebate claims without alienating customers or key trade allies. EFI has developed customized software to input, track, report and invoice myriad types of rebates, on both an aggregate or regional basis, and on a sponsor specific basis. Peter M. Feroli Applied Proactive Technologies, Inc. Director of Energy Efficiency Programs 1242 Main Street Springfield, MA 01103 Professional Background 2000 — Present Director of Energy Efficiency Programs Applied Proactive Technologies, Inc.; Springfield, MA APT provides Marketing Services, Energy Conservation Services, and Environmental Training and Educational Services. Peter brings ten years of unique, hands of experience working with energy conservation programs. Peter has worked both as a contractor to utilities and also as a program manager for utilities. He is responsible for the management and oversight of all efficiency programs that APT implements for utility and contractor clients ensuring that all program goals and objectives are met. These responsibilities include the recruitment and performance evaluation of program personnel, quality assurance performance and the establishment of quality control measures to ensure services are being delivered according to client protocol and at the highest level of customer satisfaction. Peter assists in determining the essential strategies, projects and assignments that will foster continued growth of APT's corporate objectives. Peter has countless national industry contacts spanning government agencies, utilities, manufactures, and other industry partners. Through his experience he understands the underlying fundamentals of garnering the support of multiple industry actors when designing and implementing energy conservation measures. Peter's strong industry knowledge and experience in implementing energy efficiency programs from both a client and a contractor role allow APT to deliver results on time and on budget. 1996 —1999 Program Manager EASTERN UTILITIES ASSOCIATES; West Bridgewater, MA EUA, was a publicly held electric utility serving 300,000 residential and commercial/industrial customers. EUA provided conservation and load management programs to all of its customers. Peter managed several residential energy conservation programs offered to over 275,000 residential customers. Under Peter's management sales through EUA's ENERGY STAR@ residential lighting program increased from 25,000 to 110,000 products per year and participation in the ENERGY STAR Homes program reached the highest levels in its history. He developed and managed annual budgets in excess of $2,000,000 and oversaw the daily operational functions of both product and service based programs. In addition, Mr. Feroli developed new programs and services to offer customers and represented the company on numerous industry committees and working groups. APT 7 L _; i I I �'j 1] EFI Qualifications & Capabilities Twenty-three (23) years of industry experience Exceptional product and industry knowledge Diverse and extensive experience processing incentives for all types of energy efficient products Financial strength and stability A strong program partner, rather than simply a program service provider Have worked with more than 30 utility clients over the past 18 years to implement DSM and MT programs and have never lost a contract for an on -going program Peter M. Feroli Page 2 1993 —1996 Energy Services Analyst EASTERN UTILITIES ASSOCIATES - COGENEX CORP., Lowell, MA Firm provided engineering, construction and perpetual maintenance services streamlining the daily management of a computer based energy tracking system used to invoice approximately two hundred customers per month. This resulted in over $100,000 per year in cost savings to the company. Was personally responsible for the generation of individual customer invoices ranging from $100,000 to $200,000 each per month. Peter managed the development of customized data tracking programs allowing the company to monitor their profitability on a customer by customer basis and conducted monthly financial analysis on customer performance to ensure that the company met required returns. Communicated directly with clients on all billing and data tracking issues. 1991 —1992 Sales Representative (1192 - 8192) CHAMBERS DEVELOPMENT COMPANY, Brockton, MA Firm provided residential and commercial waste disposal services to municipal, residential and commercial clients. Was responsible for generating new business throughout southeastern Massachusetts. Developed external market analysis and competitive pricing model. Worked with General Manager to create internal pricing and marketing strategies. Consultant (10/91 -1/92) Established and maintained computer generated operational, productivity and cost analysis for a $3.8 million dollar contract. 1989 —1991 Planning Analyst (6/90 - 8/91) EASTERN UTILITIES ASSOCIATES, West Bridgewater, MA EUA, was a publicly held electric utility serving 300,000 residential and commercial/industrial customers. EUA provided conservation and load management programs to all of its customers. Responsibilities included developing sales reports and forecasts for management. Performed research and analysis on customer base. Created spreadsheets, graphs and other material for presentation to upper management. Established effective working relationships with other departments. Filed reports with Massachusetts and Rhode Island state agencies. Education: Bridgewater State College 1984 -1989 Bridgewater, MA BS, Management Science, Cum Laude Bradley Steele 205 Washington St. Winchester, Ma. 02130 Professional Work Experience 1982 - Present: President and CEO of Energy Federation, Inc. (EFI) • Original founding member, incorporator, and chief executive officer of a resources conservation materials distribution business, which has grown from one part time employee and annual sales of $250,000 to up to forty-five employees and annual sales in excess of $19 million. • Developed short and long term strategic plans. • Responsible for business development, including preparation of proposals and bids. • Preparation and evaluation of budgets. • Analysis of capital requirements, and investment priorities, particularly regarding management information systems - both hardware and software related. • Development and implementation of marketing plans. • Design and writing of catalogs, brochures, and training manuals and product information sheets. • 'Product' design; creation of turnkey programs marketed to utility companies and other institutions; delivered by the Energy Federation. 1990 - 2000: (Unpaid) Member of Conservation Service Group (CSG) Executive Management Committee • Principal in merger planning and implementation leading to the creation of CSG, a non-profit energy services company which currently has approximately 170 employees and annual revenues of $17 million. • Member of Senior Management group responsible for strategic planning, business development, and policy establishment. • Treasurer and member of financial committee of the organization. • * Wrote a number of proposals resulting in successful contract awards representing well over $10 million in business • Involved in the start-up, including hiring and training, for several of CSG's large programs. 1982 -1990: Executive Director, People's Energy Resources Cooperative (PERC)* • One of the founders, designers, and organizers of PERC. • Managed the organization's growth from two staff people and a budget of $60,000 to sixteen staff and an annual budget of $750,000. • Responsible for strategic planning, including the design of new programs and initiatives. • Negotiated contracts and prepared proposals. • Wrote and monitored program and overall organization budgets. • Member of Residential team for 'Collaborative' process involving New England utilities, public interest groups, and state officials, to design many of the first large scale residential • Demand Side Management (DSM) programs in the country. • Publication of over forty articles for newsletters. * (PERC merged with two other organizations in 1990 to form Conservation Services Group.) 1986-1987: Lecturer, University of Massachusetts (Boston campus) • Taught two courses on the design and management of small energy systems to UMass undergraduate students. Board of Directors Positions: President (1985 & 1986), Treasurer (1987-1990) of Community Energy Partnerships, Inc. (CEP) Treasurer: Conservation Services Group (1990 — present) Vice -President: Affordable Comfort, Inc. (2003-present) Education: Harvard University, A.B., June, 1974 Academic Awards: Phi Beta Kappa Publications: "An Examination of the Performance and Acceptance of Compact Fluorescent Bulbs and Fixtures in the Residential Market" presented at Asilomar (Monterey, California) in 2002 for an American Council for an Energy Efficient Economy conference. "The Energy Federation: A Model Association for the Delivery of Conservation Services" presented at the University of Santa Cruz at a National Energy Conference sponsored by Lawrence Berkeley and Oak Ridge Labs. 1984 "Cooperative Purchasing; A Tool for Low -Income Weatherization Programs" presented in Portland, Oregon in 1985 at a National Weatherization Directors conference. "An Integrated Service Delivery Model for Energy Conservation Programs" presented at Asilomar (Monterey, California) in 1988 for an American Council for an Energy Efficient Economy conference. I have also assisted in designing and writing Demand Side Management (DSM) filings for the following utility companies. Boston Edison Company Northeast Utilities Company New England Electric Systems Commonwealth Electric Company Eastern Utilities Associates Nantucket Electric Company Minnesota Power APT I T" I Peter Feroli's Background (cont.) r In 2000, became a Partner in APT and serves as Director of Efficiency Programs responsible for the management and delivery of the work APT provides our clients across the country V As a member of APT, worked on the design, planning and implementation of the nation's largest torchiere turn -in events. In a three week period these events resulted in the sale of approximately 39,000 CFL torchieres 80,000 CFL bulbs and 101000 CFL Fixtures in a three week period r Has assumed a major role in the design and implementation of upstream incentive programs currently being implemented in programs in the northeast, midwest and northwest United States Have presented at a number of industry conferences on efficient lighting program strategies and implementation structures APT 1 Ti' iI Northeast Lighting & Appliance Program Rebates = 2000 to 2004 Year Lighting Products Lighting Dollars Appliance Products Appliance Dollars 2000 967,000 $ 8, 200, 000 29,600 $27300, 000 2001 21081,000 $16,265,000 36,250 $1,983,000 2002 19382,000 $ 8, 500, 000 50,740 $1, 650, 000 2003 10975,000 $ 7,315,000 71,000 $3,4501000 2004 49425,000 $14,575,000 93,000 $4,340,000