This article was originally published in the May/June 1999 issue of Home Energy Magazine. Some formatting inconsistencies may be evident in older archive content.


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Home Energy Magazine Online May/June 1999

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Cost-Effective Weatherization in Philadelphia

ECA technician Tom Homer wraps a hot water heater with an insulating blanket.
Table 1. Cost-Effectiveness of Selected ECA Measures
Measure Gas Savings (in ccf) Assumptions Lifetime/per year Degradation  Savings (Present Value) Cost Benefit/Cost Ratio*
Roof insulation 189 15 yr/5% $710 $663 1.07
Thermostat 91 7 yr/10% $193 $55 3.51
Air sealing 70 15 yr/5% $263 $158 1.66
Other 100 10 yr/10% $253 $216 1.17
*A benefit/cost ratio of more than 1.0 indicates that the measure saves more money than it costs to implement, taking into account the time value of money.
Our organization--the Energy Coordinating Agency of Philadelphia (ECA)--has broken new ground in the never-ending effort to increase cost-effectiveness. An evaluation has found that, under our program, the Conservation Works Program (CWP), it is more cost-effective for our client utility to provide free conservation services to its low-income, payment-troubled customers than it would be to continue passing on the uncollectible expense to other ratepayers.

CWP saves gas for less money than Philadelphia Gas Works (PGW) pays in avoided costs--35¢ per hundred cubic feet (ccf) per year. This is an important development in the current era of competition, in which utilities are slashing their demand-side management (DSM) programs and trying to trim costs in every possible way. We are proud that our program allows both customers and the utility to save energy and money.

Big Energy Savings CWP has achieved impressive energy savings for a low-cost program. The evaluator--Mike Blasnik of Blasnik & Associates in Boston, Massachusetts--found that CWP's net gas savings of 187 ccf per year surpasses the overall net savings found for the National Weatherization Assistance Program (NWAP) in 1989. NWAP spent three times more per house, in real terms, than CWP spends. Blasnick compared CWP to similar low-income programs across the nation and found that it provided more first-year savings per dollar spent than any other program he reviewed.

ECA's work is cost-effective when gas savings and payment impacts are estimated using the avoided-cost approach developed in prior evaluations, and assuming fairly conservative measure lives with ongoing degradation of savings. A preliminary analysis of gross savings persistence found no degradation in savings for the second winter after treatment. In fact, savings appear to have increased slightly, meaning that education seems to have motivated customers to reduce usage.

Savings were disaggregated into the major measures of roof insulation, thermostats, air sealing, and other (including savings from education, hot water leak repair, and many low-cost measures). Thermostat savings were particularly impressive, saving 91 ccf per year for an installed cost of only $55 each (see Table 1).

Evaluation Saves Program Our program's future was threatened as PGW struggled with its perennial problem of high uncollectibles combined with lower-than-normal gas sales, based on two warmer-than-average winters in a row. If it hadn't been for this evaluation proving that CWP is now extremely cost-effective, the program might have been cut back severely. However, because of our proven good results, CWP has been continued for 1999 at the same level of funding.
--Liz Robinson
Liz Robinson is executive director of the Energy Coordinating Agency of Philadelphia.


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