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Water Heaters Base Load and Off-Peak Opportunities by tym16535


									    Water Heaters:
 Base Load and Off-Peak

Pre-conference Workshop
Connect 2007 Conference

     May 15, 2007 - Miami, FL

              How End Uses and
           Channels Link to Programs
                                                   Water Heater
                                                   Load Control

                                                 Consumers                               Programs


            CFL                                        Space
           Fund                 Lighting
           Raiser   Community                         Conditioning

                        Energy                                   Home
                        Makeover                               Energy
                          Contest                            Workshops

      Shape of the Market

National Market Share
  •   52% Gas – 48% Electric
Only 3 Major Mfgrs
  •   50-50 Retail/Wholesale
Planned Obsolescence
   •  10-12 Yr Avg Tank Life
Resistant to Change
  •   Primary Focus on Revenue Stream

    Shape of The Technology

 High-Efficiency, Long-Life, Non-
  Metallic, Electric WH
 Tankless/Instantaneous,
 Issues w/Gas and Electric
 Electric Heat Pump Water Heaters,
  2X Efficiency

    Shape of The Technology

  HVAC Systems with Integrated
  Water Heating Functionality
 Improved Solar WH Tech, with
  Gov’t Incentives
 Next Generation Gas WH, Tank-
  Type (SEGWHAI)

Valley Electric Association

Installation Example

 TWACS® System Overview
                                TWACS Net Server
                               (TNS) Master Station
                                                             Billing / CIS
Distribution        Voice Grade
Substation         Communication

                                                 LAN / WAN

TWACS Substation
   Equipment                                Workstations

  Power Lines          TWACS-equipped
                           Electric Meter
                   To Home

                                                                     Water Heater

                                                      TWACS-equipped Electric Meter

     Shape of The Opportunity

 Approx. 10% of Installed Stock is
  Replaced Annually
 The Electric WH Load can be
  Managed through Demand Response
 Off-Peak Electric Water Heating is
  the Win-Win

       Peak Shave Water Heating

• Number of customers
   •   37,800
• Peak reduction capability
   •   ~20 MW
• Reduction duration
   •   4 to 8 hours
• Availability
   •   Year-round
   •   Control within 10 minutes
• Limitations
   •   Few
         Off-Peak Water Heating
          at Great River Energy
• Number of customers
  •   58,000
• Valley filling capability
  •   Approx. 50 MW year-round
• Peak reduction capability
  •   0 MW
• Control period
  •   Approx. 2300 to 700 hours
• Limitations/Concerns
  •   If load control failed…

   Initiating Load Control for:

• MW capacity limits
• Expected monthly billing peaks
• Avoidance of high-cost energy
• System emergencies
   • Plant outages
   • Transmission line outages
   • Transmission line loading relief

         Demand Response in Action
                                               11 Hours

                                                                       255 MW
        2168 MW


                  Demand Reduction Capability

                                                             ETS Restore 2300
1,800              AC & PSWH 1100
                        337 MW summer
1,600                  260 MW winter
                                    C&I 1300

                                                 Irr. 1600


           Measuring Success
July ’06 Load control summary
• 16 days of load control
• 105 total load
  control hours
• 16,390 MWh of
  avoided market
  energy purchases
• $2.5 million of

 Shape of The Opportunity

 Equipmentt Lease and Rental Is
  More Financially Viable
 Recognition that the Electric
  Water Heating Market Can Be
  Transformed to Serve the Two
  Parties With the Strongest
 Financial Interest
  • The End-Use Customer
  • The Electricity Provider

      Rental Water Heaters

• Canada has over 2.5 million rental water
   • Approximately 80% of the homes in Toronto
     have rental water heaters.
   • Rental program started over 50 years ago.
• AWHR is the largest home water heater
  rental company in America.
   • Over 120,000 customers in 11 states

              Who Rents?

1. Those Who Can’t Afford
2. Those Who Don’t Want to be Bothered
3. Landlords

         Customer Value Proposition
• No Purchase Cost or Installation Charges
  • In normal situations, customer do not have ANY initial
• Toll-Free 24/7 Repair Hotline
  • Worry-free service guarantee – if anything goes wrong with
    the unit, it is repaired or replaced free of charge.
  • We get a plumber to the customer’s home, which is more
    convenient than finding one on their own.
• High Quality, High Efficiency Equipment
  • Long-life heaters reduce overall operating costs and save money
  • Quality units have fewer problems which means less hot water
    interruptions for the user.
  • Rental rate is $14.99 and $15.99 per month for 50 and 80-gallon
    units, respectively.
• Affordability with peace of mind
  • Rental rate is budget friendly with no up front costs.
  • Initial contract term is 12 months and can be cancelled
    upon 30 days notice after the initial term.
Sample Lifetime Warranty Application

       Plumber Value Proposition
• Easier sale to customer.
   •   A $15 monthly payment is more appealing to a customer than a
       several hundred dollar job.
   •   No up front cost, worry-free service guarantee, etc.
• On-going service work.
   •   Competitive service rates paid.
   •   Ongoing service work is awarded to those who generate the lead
       and continue to deliver quality customer service.
   •   Customer WILL call AWHR for service – not always the case with
       an outright sale.
• Assured Payment.
   •   AWHR is responsible for payment – do not have to chase individual
• Additional Sales From AWHR.
   •   New customer leads and service work are allocated on the basis of
       performance meaning those who perform get additional business.
• New Customer Fee.
   •   Earn $350 for selling the rental significantly increasing
       their margin on a water heater installation.
        Utility Value Proposition
• New and incremental revenue stream
• Energy sales to new customers
• Long term retention of existing load
• Essential products to customers affordably
• Access to customers in competitive markets
• Ability to create long term customer loyalty
• Generate additional revenue – Installation,
  Service & long term satisfied customers
• Bring value added services to your customers
• Partner with a long term creditable organization
  in the rental industry

   Marketing The Rental Program
• Service technicians create awareness.
   •   Water heater stickers applied by service tech when in
       customer’s house doing other service work.
   •   Literature regarding the benefits of the rental
       water heater program to leave with customers.

• Direct marketing.
   •   Target developments that are 8 to 10 years old.
   •   Direct mail, door hangers, mail box stuffers.

• Customer mailing insert.
   •   Insert to create awareness and value regarding rental option.

• Yellow page advertising.
   •   Include high quality, energy efficient, rental water heaters now

    Water Heaters:
 Base Load and Off-Peak

Pre-conference Workshop
Connect 2007 Conference

     May 15, 2007 - Miami, FL


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