Energy Waste Reduction (EWR) Low Income Program Overview

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The Energy Waste Reduction (EWR) Low Income program by DTE Energy aims to reduce energy use for low-income households through various cost-effective measures. The program includes assistance for single-family homes and multifamily buildings, home energy consultations, and behavioral reports. Despite being costly, the program has shown significant growth and impact in saving energy costs for qualifying customers.

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Energy Waste Reduction (EWR) Low Income Jason Kupser Manager Residential / Education Awareness EWR January 24, 2019

Executive Summary EWR Low Income portfolio contains four programs delivering various energy savings measures: Energy Efficiency Assistance high impact savings measures for single family homes Low Income Multifamily simple and high impact savings measures for multifamily buildings and units Low Income Home Energy Consultation simple savings measures for single family homes Low Income Home Energy Reports behavioral treatment via neighbor comparison reports DTE Energy s Energy Waste Reduction (EWR) Low Income program has grown from $12 million per year to $18.7 million in 2018 and $22.4 million in 2019. A portion of the EWR performance incentive mechanism is tied to the spend of EWR Low Income budgets. Some of the budget increase is part of the EWR 2018-19 plan settlement. American Council for an Energy-Efficient Economy (ACEEE) benchmarking placed DTE Energy s EWR Electric Low Income program 9thlargest nationally based on spend. No gas data available. Low Income programs are expensive. For electric, it costs 4 to 5 times more than residential and commercial and industrial (C&I) programs. For gas, it costs 2 to 4 times more than residential and C&I programs. This is because the entire cost of the energy savings measure (often including installation) is funded through the program. 2

Agenda Low Income EWR Portfolio and Benchmarking Low Income Programs Energy Efficiency Assistance Program Low Income Multifamily Program Low Income Home Energy Consultation Program Low Income Home Energy Reports Program 3

EWR Low Income Portfolio The program s objective is to reduce the energy use of Low Income customers through improvements to their existing home at no cost to them. Low Income program qualifications: Customers with a household income at or below 200% of the Federal Poverty Limit, or reside within a HUD census tract, or reside in a section 8 or other subsidized multifamily building Low Income programs are expensive because the entire cost of the energy savings measure (often including installation) is funded through the program. Electric costs 4 to 5 times more than residential and C&I programs. Gas costs 2 to 4 times more than residential and C&I programs. The revenue requirement for EWR Low Income programs is spread across all customers and customer classes. It is a portion of the distribution surcharge. For electric, it is applied volumetrically to residential customers and per meter for secondary and primary customers, and for gas applied volumetrically to all customer classes. Low Income portion of the surcharge is applied regardless of choice or EWR self-direct status. The Energy Efficiency Assistance program is managed by Solutions for Energy Efficient Logistics L.L.C. (SEEL) and the Home Energy Consultation and Multifamily Low Income programs are managed by Walker-Miller Services. 4

Historical and Projected EWR Low Income Spend $25,000 $22.47 $20,000 $18.71 $15,000 $12.59 $12.07 $12.34 $12.23 $12.00 $11.76 $10.43 $10,000 $6.22 $5,000 $3.69 $- 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Electric Gas Data Source: various DTE Energy historical EO and EWR filings, EWR plan filings and settlements (cases U-16289; U-16358; U-16290; U- 16359; U-16737; U-16751; U-17282; U-17288; U-17602; U-17608; U-17832; U-17841; U-18023; U-18024; U-18332; U-18338; U-20029; U- 20035; U-18262; U-18268) 5

Benchmarking - ACEEE Top Utilities by Total Low Income Spending ($1,000s) DTE Energy Electric was ranked 9th nationally and the increased spend moves DTE closer to the 6th position Data Source: 2017 ACEEE Utility Scorecard DTE Energy ranks 12th in total spend on energy efficiency programs and Consumers Energy ranks 15th 6

Energy Savings measures Provided in EWR Low Income Portfolio Energy Efficiency Assistance Low Income Multifamily HVAC tune-ups and replacements Water heater replacement Air sealing and insulation Refrigerator Programable thermostats LED lights Pipe wrap Efficient showerheads Faucet aerators HVAC tune-ups and replacements Water heater replacement Air sealing and Insulation Refrigerator Programable thermostats LED lights Pipe wrap Efficient showerheads Faucet aerators Low Income Home Energy Consultation Low Income Home Energy Reports LED light bulbs LED nightlights Pipe wrap Programable and smart thermostats Efficient showerheads Faucet aerators Paper Home Energy Reports Email Home Energy Reports 7

EWR Electric Residential and Low Income Portfolio 2018 EWR Res/LI Electric Savings (Total 292,615 MWH) 2018 EWR Low Income Electric Savings (Total 23,322 MWH) 10% 29% 8% 24% 92% Energy Efficency Assistance Multi Family Home Energy Consultation Home Energy Reports 37% Residential Low Income 2018 EWR Electric Low Income Electric Spend (Total $12,512,000) 2018 EWR Res/LI Electric Spend (Total $51,433,000) 11% 47% 23% 40% 77% Energy Efficency Assistance Multi Family Home Energy Consultation Home Energy Reports Residential Low Income 2% Data Source: DTE Energy EWR plan filings and settlements, case U-18262 8

EWR Gas Residential and Low Income Portfolio 2018 EWR Low Income Gas Savings (Total 162,454 MCF) 2018 EWR Res/LI Gas Savings (Total 924,230 MCF) 15% 42% 18% 82% 21% Residential Low Income Energy Efficency Assistance Multi Family 22% Home Energy Consultation Home Energy Reports 2018 EWR Res/LI Gas Spend (Total $18,331,000) 2018 EWR Electric Low Income Gas Spend (Total $5,799,000) 9% 32% 68% 67% 23% Energy Efficency Assistance Multi Family Home Energy Consultation Residential Low Income Home Energy Reports 1% Data Source: DTE Energy EWR plan filings and settlements, case U-18268 9

Agenda Low Income EWR Portfolio and Benchmarking Low Income Programs Energy Efficiency Assistance Program Low Income Multifamily Program Low Income Home Energy Consultation Program Low Income Home Energy Reports Program 10

Energy Efficiency Assistance (EEA) Program Energy Efficiency Assistance high impact energy savings measures for single family homes Energy Efficiency Assistance HVAC tune-ups and replacements Water heater replacement Air sealing and insulation Refrigerator Programable thermostats LED lights Pipe wrap Efficient showerheads Faucet aerators EEA program serves 5000 6000 Low Income customers annually As part of the EWR 2018-19 plan filing settlement, the EEA program is expanding its program offerings, resulting in an increase in spending by an additional $5 million over the original plan for the two years. Comprehensive energy efficiency home upgrades are targeted at customers in arrears and high energy use, partnering with THAW and Revenue Management & Protection to fully leverage all available customer assistance. The EEA program is delivered through partnerships with Community Action Agencies and Non-Profit Agencies such as Wayne Metro, OLSA and Habitat For Humanity among many others. 11

Low Income Multifamily Program Low Income Multifamily simple and high impact energy savings measures for multifamily buildings and units Low Income Multifamily HVAC tune-ups and replacements Water heater replacement Air sealing and Insulation Refrigerator Programable thermostats LED lights Pipe wrap Efficient showerheads Faucet aerators Low Income Multifamily serves over 6000 customers As part of the EWR 2018-19 plan filing settlement, the Multifamily program is expanding its program offerings, resulting in an increase in spending by an additional $3.25 million over the original plan for the two years. New program offerings will include: Much more expensive and impactful energy savings measures installed into the units Concierge full service for property owners: Audits and contractor estimates Finding financing Very attractive rebate incentives for energy efficiency upgrades in multifamily common areas 12

Low Income Home Energy Consultation (HEC) Program Low Income Home Energy Consultation simple energy savings measures for single family homes Low Income Home Energy Consultation LED light bulbs LED nightlights Pipe wrap Programable and smart thermostats Efficient showerheads Faucet aerators Low Income HEC serves over 7000 customers HEC program offerings are part of the outreach efforts at all Community Assistance Days (CADs), many foodbanks, community action agencies, multiple faith-based partnerships, community groups and neighborhood organizations. 13

Low Income Home Energy Reports (HERs) Program Low Income Home Energy Reports behavioral treatment via neighbor comparison reports Low Income Home Energy Reports Paper Home Energy Reports Email Home Energy Reports The report provides a neighbor comparison along with energy efficiently behavior change recommendations and EWR program participation recommendations. The HER uses social norming via the neighbor comparison to cause the behavior modification. HER has the most cost-effective energy savings measure in Low Income portfolio Low Income HER serves about 182,000 customers 14