Opower, Inc. v. Efficiency 2.0, LLC

Filing 5

APPENDIX/EXHIBIT by Opower, Inc.. (Attachments: # 1 Appendix 1, # 2 Appendix 2, # 3 Appendix 3, # 4 Appendix 4, # 5 Appendix 5, # 6 Appendix 6, # 7 Appendix 7, # 8 Appendix 8, # 9 Appendix 9, # 10 Appendix 10, # 11 Appendix 11, # 12 Appendix 12, # 13 Appendix 13, # 14 Appendix 14, # 15 Appendix 15, # 16 Appendix 16, # 17 Appendix 17, # 18 Appendix 18, # 19 Appendix 19, # 20 Appendix 20, # 21 Appendix 21, # 22 Appendix 22)(Karol, Peter)

APPENDIX EXHIBIT 8

Evaluation Report: OPOWER SMUD
Pilot Year2
Presented to
OPOWER , Inc.

February 20, 2011

Presented by:
Kevin Cooney
Navigant Consulting
30 S. Wacker Drive, Suite 3100
Chicago, IL 60606
phone [phone]
fax [phone]
www.navigantconsulting.com

Submitted to:
Ogi Kavazovic
VP, Marketing & Strategy
Tel [phone]
OPOWER • www.opower.com
Submitted by:
Navigant Consulting,
1722 14th Street, Ste. 230
Boulder, CO 80302
720.564.1130
Contact:
Kevin Cooney, Managing Director
312.938.4242
[e-mail]
Prepared by:
Bill Provencher, Associate Director
608.497.2327
[e-mail]

Contents

Executive Summary.................................................................................................................... 2

A.

B.

C.

D.

Does the program continue to generate savings? ......................................................... 3

What is the trend in program savings?........................................................................... 3

Do program savings increase with electricity use?....................................................... 3

Graphical summary ........................................................................................................... 4

I.
  Program Description and Evaluation Objectives............................................................. 6

II. Impact Evaluation Methods ................................................................................................ 8

A.
  Difference-in-Difference (DID) analysis ......................................................................... 8

B.
  Linear Fixed Effects Regression (LFER) model ............................................................. 8

Expanding the basic LFER model to account for degree days................................. 9

Expanding the degree day model to examine savings trends ................................. 9

III.
  Impact Evaluation Results................................................................................................. 12

A.
  Results of DID estimation ............................................................................................... 12

Extension of DID results: Examination of the summer months July-August...... 13

B.
  Results of Linear Fixed Effects Regression (LFER) Analysis ..................................... 20

Long term trend in program savings......................................................................... 21

Temperature-related fluctuations around the long term trend ............................. 22

IV.
 Conclusion ........................................................................................................................... 31

A.
  The program continues to generate savings ................................................................ 31

B.
  The trend for high consumption households .............................................................. 31

C.
  The trend for low consumption households................................................................ 31

D.
  Program savings increase with electricity use............................................................. 31

E.
  Graphical summary ......................................................................................................... 32

Appendix A. Baseline Statistics Used in Analysis .............................................................. 36

Appendix B. LFER Regression Results ................................................................................. 37

Page 1

Executive Summary
Information technologies designed to assist and encourage customers to use less energy are
increasing in the industry. OPOWER, Inc. offers an information program to help residential
customers manage their electricity use by providing regular reports –called Home Electricity
Reports—about the customer’s electricity consumption. Along with other information, these
reports compare a household’s electricity use to that of its neighbors and suggest actions the
household can take to reduce its electricity use. It is hypothesized that presentation of energy
use in this comparative fashion creates a “social nudge” that induces households to reduce their
electricity use.
This hypothesis is being tested in a three-year pilot of the OPOWER program in the Sacramento
Municipal Utility District (SMUD) that began in spring 2008. The program consists of an
experimental design across Census blocks in which blocks were randomly assigned to treatment
and control groups. 35,000 single-family residential customers in the treatment group receive
regular reports on how their energy use compares to their neighbors’ energy use. Treatment
households with high consumption in 2007 receive monthly reports, and households with low
consumption receive quarterly reports. 50,000 single-family customers in the control group did
not receive any reports. Billing data has been assembled for all customers beginning the year
prior to the start of the program.
Several studies have examined the results of the first year of the SMUD OPOWER pilot
program, including an analysis done by Summit Blue Consulting (now part of Navigant
Consulting). All studies concluded that program savings in the first year was about 2.1%. The
robustness of the savings estimates across studies is due largely to the experimental design of
the program. The experimental design makes the identification of program savings robust to
the specification of the econometric model used to estimate savings.
This report presents an evaluation of the first 29 months of the program, with an emphasis on
the second year of the program. The main research questions addressed in the evaluation and
presented in this report are the following:
A. Does the program continue to generate savings?
B. What is the trend in program savings? Is there a ramp-up period to savings? If so, for
how long? Are savings now relatively stable, increasing, or falling?
C. Do program savings increase with usage?

Page 2

A. Does the program continue to generate savings?
The program continues to generate savings:
•
•
•

Average savings in program Year 2 were 2.89% for high consumption (HC) households
receiving monthly reports, and 1.70% for low consumption (LC) households receiving
quarterly reports.
Year 2 average household savings is 381 kWh for HC households and 104 kWh for LC
households.
Average household savings through the first 29 months of the program is 878 kWh for
HC households and 234 kWh for LC households.

B. What is the trend in program savings?
Program savings are characterized by temperature-driven seasonal fluctuations around a
baseline trend. For HC households, the baseline trend ramped up through the first 10-12
months and appears to have remained fairly constant since then:
•
•

•
•

Average percent savings in program Year 2 are higher than in Year 1, 2.89% compared
to 2.37%, which is a 22% increase in savings in the second year. The increase is
statistically significant.
Statistical analysis indicates that the long term trend for savings leveled off at about 1012 months, and has remained fairly constant since then. In other words, after the first
year of the program the fundamental effectiveness of the program does not appear to
have changed substantially.
Statistical analysis supports a long term savings trend of about 380 kWh per year,
approximately 2.9% per year.
Additional analysis after the program has been in place for a full three years, with data
for at least three occurrences of each season, should give a better indication of whether
the long term trend in savings is indeed constant or instead showing signs of rising or
falling.

For LC households, program savings continue to trend upward:
•
•

Average percent savings in program Year 2 are higher than in Year 1, 1.70% compared
to 1.25%, which represents a 36% increase in savings.
Statistical analysis indicates that program savings continue to trend upward through
the first 29 months of the program.

C. Do program savings increase with electricity use?
For both HC and LC households, program savings reveal strong seasonal effects, with savings
highest in the seasons of highest electricity use, summer and winter. For instance, in Year 2
(spring 2009-winter 2010) the average kWh savings for HC households in the seasonal sequence
spring-summer-fall-winter was 80-123-84-97 kWh. The same sequence for LC households was
13-36-20-33 kWh.
Page 3