Evaluation of home energy audit and retrofit loan programs in Minnesota: the Northern States Power experience

Abstract

Northern States Power NPS, the largest utility in Minnesota, operates several residential energy conservation programs. A detailed quantitative evaluation of two of these programs is described. The Minnesota Energy Conservation Service (MECS), provides home energy audits and related services to eligible households (who live in structures with four or fewer dwelling units and pay gas or electricity bills to a utility participating in MECS). Loans are available to a portion of NSP's customers for installation of retrofit measures recommended in a MECS audit: low-interest installment loans to City of St. Paul households and deferred payment low-interest loans to a pilot group of St. Paul area households (constituting one of NSP's Public utility Conservation Investment Programs, PUCIP). This evaluation showed that NSP's MECS and PUCIP programs led to statistically significant energy savings. The value of these energy savings was sufficient to make the programs cost-effective to participants; however, the programs are not economically attractive to NSP nonparticipating ratepayers when viewed from the perspective of minimizing natural gas rates. The economics of the MECS program are neutral from the social (i.e., state) perspective. The PUCIP program is not cost-effective to the state.