March 13, 2006

1
The Energy Policy Act of 2005Understanding
Opportunity
Bob Trate - CPMR
March 13, 2006
2
Agenda

• EPAct 2005 Overview
• EPAct 2005 Lighting Provisions
• ASHRAE 90.1-2001 Standard
• Tax Deduction Opportunity
• Lead with Lighting
• Getting Started
• Advance Optanium Electronic Ballasts
• Lighting Controls

3
EPAct 2005 Overview

• Background
• Signed by President George W. Bush August 8, 2005
• Over 3 years of legislative development
• First major overhaul of the National EPAct since
  1992
• Estimated to result in 500M in incremental
  sales of lighting systems
• Covers energy generation, transmission,
  distribution, and energy efficiency

4
EPAct 2005 Overview

• Objectives
• Reduce the nations energy consumption
• Decrease pollutant emissions
• Cut dependence on foreign fuel
• Encourage innovation of products systems
• Improve global competitiveness

5
EPAct 2005 Overview

• Tactics
• Reduce energy consumption at the application
  level
• Set product and system energy efficiency
  requirements
• Strengthens requirement to use the EPAs Energy
  Star rated products/alliances
• Improve interior lighting, HVAC building
  envelope systems
• Reward improvements with one-time tax deduction

6
EPAct 2005 Overview

• Tax deduction provisions are intended to allow
  credit for alternate design methods
• Automatic lighting controls
• Daylighting
• Occupancy sensors
• Dimming systems not included
• Improved fan motor efficiency
• Variable speed controllers
• Fuel cells
• Low loss wire for building power
  distribution

7
EPAct 2005 Overview

• Federal Building Provisions
• Existing federal buildings
• Reduce energy based on gross consumption per sq
  ft in 2003
• Starts 2006, must reduce consumption by 2 per
  year
• Goal in 2015, achieve overall 20 reduction vs.
  2003
• Install sub-metering by 10/1/2012, hourly
  reporting
• New federal buildings
• Exceed ASHRAE/IES 90.1-2001 standards by 30 for
  commercial buildings
• Utilize sustainable design principles for siting,
  design and construction

8
EPAct 2005 Lighting Provisions

• Efficacy Standards for Lighting Products
• Exit signs
• Must meet Energy Star Version 2.0 after January
  1, 2006
• Torchiere
• Must not consume more than 190 watts and not
  capable of operating lamp with more than 190
  watts after January 1, 2006
• Traffic Signals
• Must meet Energy requirements from Traffic Signal
  Version 1.1 after January 1, 2006
• Medium Base Compact Fluorescent Lamps
• Must meet August 9, 2001 Energy Star requirements
  after January 1, 2006

9
EPAct 2005 Lighting Provisions

• Efficacy Standards for Lighting Products
• Ceiling Fan Kits effective January 1, 2007
• Lamps, screw-based or pin-based must be packaged
  with light kit
• Medium screw based socket must use CFL that meets
  Energy Star 3.0 requirement or another light
  source with equal or better lumen per wattage
  efficacy
• Magnetic Fluorescent ballasts
• Energy Savings lamps (F34T12, F96T12) are added
  to the 2000 DoE Ballast Ruling, effective 2009
• Manufactured on or after July 1, 2009, sold after
  October 1, 2009
• Installed in a luminarie by luminarie
  manufacturer after July 1, 2010
• Mercury Vapor ballasts
• Shall not be manufactured or imported after
  January 1, 2008

10
EPAct 2005 Lighting Provisions

• Ballast Regulations

2005 BEF Standards for Full-Wattage T12 Lamps
2009 BEF Standards for Energy-Saving T12 Lamps
Requirement
April 1, 2006
BEF ballast efficacy factor
11
EPAct 2005 Lighting Provisions

• Replacement Ballasts
• Can be manufactured until July 1, 2010
• Must be marked For Replacement Only
• Shorter lead lengths
• Packaging limits, 10 units or less
• Ballast Exemptions
• Dimming ballasts with 50 or lower of max. light
  output
• F96T12HO ballasts for -200F ambient or outdoor
  signs
• Power Factor lt0.9 that are designed and labeled
  for Residential Use Only

12
ASHRAE 90.1-2001

• Lighting Power Density
• ASHRAE 90.1-2001 set max watts per sq ft
  (lighting power density)
• Exterior and interior building have separate
  limits
• Can tradeoff within exterior or interior, but not
  across them
• DOE utilizes as baseline for State energy codes
• Participation varies by state
• Two methods to measure lighting power density
• Building Area
• Space-by-Space (by room type)

13
LPD Calculation Methods

• Building Area Method
• Total wattage vs. established standard for the
  entire building
• Space-by-Space Method
• Standards based on task specific room type
  requirements
• May trade-off between wattage on interior
  applications
• Credits for control are not allowed

14
Lighting Power Densities
15
State Standards

• State Standards for Lighting Power Density

16
States EPAct 2005 Assistance

• Individual State Assistance
• Have conservation plan that targets a 25
  efficiency improvement in energy use by 2012 (vs.
  1990 level)
• Appropriations to states of 100,000,000 for each
  fiscal year 2006 2007, 125,000,000 for 2008
• Residential rebate programs use Energy Star
  Products
• New commercial construction must exceed most
  recent IECC State code by 30
• Renovations of existing buildings must achieve
  30 reduction in energy use versus level prior to
  renovation

17
Tax Deduction Opportunity

• Tax Deduction Provisions
• Efficiency based on ASHRAE 90.1-2001
• Certification of energy and power based upon 2005
  California Nonresidential Alternative Calculation
  Method Approval Manual
• Deduction cannot exceed cost of upgrade,
  including materials, labor design
• Deduction taken in the year placed in service

18
Tax Deduction Opportunity

• Tax Deduction Provisions
• Qualifying property must be put in service from
  January 1, 2006 December 31, 2007
• Up to 1.80/sq. ft. for Energy Efficient
  Property used for new construction or renovation
• 0.60/sq. ft. each for interior lighting system,
  HVAC, and building envelopes

19
Tax Deduction Opportunity

• Two Types of Tax Deductions
• Whole Tax Deduction
• Interior Lighting, HVAC, Building Envelope
• One time deduction up to 1.80 per square foot if
  ASHRAE 90.1-2001 is exceeded by gt50
• Partial Tax Deduction
• Not all systems achieve 50 improvement over
  ASHRAE 90.1-2001
• One time deduction up to .60 per square foot for
  Lighting with gt40 improvement

20
Interim Rules for Lighting Systems

• Tax Deduction Eligibility
• 25 - 40 improvement over 90.1-2001
• 50 improvement required for warehouses to
  achieve 0.60/sq. ft. deduction
• Controls Provisions bi-level switching,
  automatic light shut-off, tandem ballast wiring
• Minimum requirements for light levels per IESNA

21
Tax Deduction Opportunity

• Tax Deduction Recipient
• Tax deduction recipient is dependent upon
  building ownership
• Private Owner or party who paid to have the
  building constructed or renovated
• Federal, State, local/political subdivision
  Party primarily responsible for designing the
  property
• No deduction for low-rise residential buildings

22
EPAct 2005 Lighting

• Why lead with Lighting?
• Lighting consumes up to 40 of total energy
  costs
• 80 of buildings use pre-1986 lighting technology

• Only 20 of buildings built before 1986 have
  since had lighting upgrades
• Lighting is the fastest and easiest way to
  upgrade
• Offers substantial and lasting energy cost
  reduction
• Average 2-3 year payback on lighting upgrade

23
EPAct 2005 Lighting

• Why lead with Lighting?

Example T12 to T8 Lighting Upgrade 3-YR
Potential Energy Savings 96,030
Energy Saved 97 watts per fixture 53.35 annual
savings per fixture 32,010 total annual
savings 96,030 total 3-yr savings

• Current T12 System
• 300 Offices with two 4-lamp fixtures ea.
• 600 4-lamp Fixtures
• 40W T12 Lamps
• Magnetic Ballasts (2 per fixture)
• 172 Total System Watts

New T8 System 300 Offices with two
4-lamp fixtures ea. 600 4-lamp
Fixtures 2400 F32T8 25 watt Lamps 600
LW hi-efficiency electronic ballast 75
Total System Watts
Based on 5500 annual burn hours and electricity
rate of .10 per kWh.
Lighting upgrades yield great returns without
incentives!
24
EPAct 2005 Lighting

• Sample Calculation
• Partial Deduction for 48,000 Sq Ft Lighting
  Upgrade
• 300 Offices _at_ 160 Sq Ft each 48,000 Sq Ft
• Lighting power density improved by 37.5 over
  ASHRAE 90.1-2001
• .54 per Sq Ft tax deduction
• Corporate tax rate of 33
• 48,000 Sq Ft. x .54 x 33 8,554 one-time tax
  savings

Tax Savings are the icing on the upgrade cake!
25
Getting Started

• Lead with Lighting
• Reduce building-wide energy consumption by up to
  20
• Add cash savings annually to bottom line
  profitability
• Earn EPAct 2005 one-time tax deduction to
  accelerate ROI
• Enhance property value and marketability
• Increase tenant safety, satisfaction,
  productivity
• Meet requirements for LEED and sustainability

26
Getting Started

• Talk to the Experts
• Request a SmartCalc audit from Advance
• Contact an energy service company (ESCO)
• Talk to a utility representative
• Consult an accredited lighting designer

27
Getting Started

• Talk to Advance
• Visit the Advance energy bill website
• Know why efficient lighting starts with the
  ballast
• Explore a full range of ballast options
• Keep your future lighting options open

www.energybillinfo.com
28
Getting Started

• Why Advance?
• Ballast technology leadership
• Solutions that support unrestricted lamp, fixture
  and control innovation
• Driving higher efficiency lighting systems
• Brand most specified by electrical contractors
• Industry leading Plus 90 system warranty

29
Introducing Optanium 2.0

• Moving beyond high-efficiency to True Performance
  Technology

30
Electronic Ballast Timeline
2nd generation -Centium RCN-VCN dedicated
voltage, Mark V Mark VII
RCN-VCN Centium slated for discontinuation
Optanium 1.0 introduced
IntelliVolt versions of Centium, Smart-Mate
Mark VII. Also Mark X
1st generation REL-VEL dedicated voltage
Optanium 2.0 and Energy-Saving T-8 Lamps
1980s
1990s
98 04
04 05
2006
T-12 Std T-8 to High-Efficiency Electronic and
Energy-Saving T-8 Retrofits Lighting Controls
standard Systems integration
T-12 to T-8 Retrofits Some or no lighting
controls
31
What is Optanium 2.0?

• Original Optanium (aka Optanium 1.0)
• High Efficiency
• Instant Start Only
• Dedicated voltage
• Lamp auto-restrike

Optanium 2.0 adds features and functionality
32
What is Optanium 2.0?
Optanium 2.0 Not just moving beyond dedicated
voltage Optanium, but eclipsing all competitive
offerings as well..
33
Optanium 2.0
True Performance TechnologySM A Twelve Step
Program for high performance-high efficiency T8
lighting
34
The Optanium 2.0 Advantage

• High Efficiency Ballast
• Ballast consumes approx 3 watts less than
  standard electronic
• IntelliVolt technology

Most high-efficiency ballasts stop here. Sure,
some brands add another feature or two but the
total performance of Optanium 2.0 is unmatched.
True Performance Technology begins where standard
high-efficiency ends
35
The Optanium 2.0 Advantage

• High Efficiency Ballast
• Ballast consumes approx 3 watts less than
  standard electronic
• Intellivolt technology

• Energy Savings Today AND Tomorrow
• Constant current design delivers maximum
  energy-saving performance from standard AND
  energy-saving T8 lamps

• Optimize Lamp Life with Starting Options
• Instant Start meets ANSI lamp ignition
  specifications of lt100 ms
• Programmed Start optimized performance for
  frequent on/off applications

36
The Optanium 2.0 Advantage

• Trouble-Free Installation
• Leads exit ballast on the correct ends
• Reduces installation and maintenance costs
• Significantly lowers risk of pinched leads

• No Interference with Security Systems
• Operating frequency range is 42-52 kHz
• Avoids 30-40 kHz IR range
• Avoids 54-62 kHz anti-theft device range

• Suitable in Temperature-Sensitive Applications
• -20 start temp for 32W T8 lamps on instant start
  models
• Ideal for parking garages, warehouses and cold
  storage areas

37
The Optanium 2.0 Advantage

• Anti-Arc Protection
• UL Type CC rating protects system components in
  event of damaged sockets or poorly seated lamps,
  without compromising other system capabilities

• Lower Maintenance Costs
• Lamp auto-restrike capability allows the ballast
  to ignite replacement lamps without cycling the
  power

• Meet new NEMA/CEE High Performance T8 Lighting
  System Specifications
• Advances broad range of instant and programmed
  start models qualify users for Super T8 rebates

38
The Optanium 2.0 Advantage

• Increased Light Quality
• Anti-striation circuitry eliminates lamp
  striation problems

• Flexible Solutions
• Available in low, normal, and high ballast factor
  configurations to meet a wide range of
  application needs

• Extended System Warranty Protection
• Regardless of lamp manufacturer or wattage,
  Advances PLUS 90 Protection warranties the
  entire system for 90 days beyond the lamp
  manufacturers published warranty

39
Why Choose Advance Optanium 2.0?
40
Unparalleled Features
41
Unparalleled Choice
Comprehensive system warranty puts the lamp
choice back in the end-users hands without
sacrificing warranty protection.
ONLY from Advance where great lighting starts.
42
Ballast Factor In Terms of Control

• Electronic ballasts are offered with different
  ballast factors (refer to Advance catalog)
• Selection and application of ballast factor can
  act as a form of lighting control
• Reducing the ballast factor reduces light output
  and saves energy

43
Ballast Factor Defined

• Measure of light output from lamp operated by
  commercial ballast, as compared to laboratory
  standard referenced ballast specified by ANSI.
• You have 3 ballast factor choices when using
  electronic ballasts
• Normal ballast factor (.88)
• High ballast factor (1.20)
• Low Ballast factor (.75)

44
Ballast Factor Is Important

• You can control the amount light you need by
  selecting the correct ballast factor
• Low ballast factor less light and saves energy
• High ballast factor more light and less energy
  efficient
• Know when and where to use the different ballast
  factors

45
Ballast Factor Light Output
Performance Comparison of 2 F32T8 Lamps
46
Fluorescent Dimming

• An excellent method of control resulting in
  exceptional energy savings
• Varies ballast factor from 1.0 to .05
• Advance offers 2 types
• Mark X Powerline 2-wire
• Mark VII 0-10 Volt D.C. Control
• Multiple control manufacturers including Leviton
  Mfg.

47
Leviton Lighting Controls
48
Lighting Energy Standards, LEED Energy Tax Bill
Energy issues overlap different codes.
Four Code Types to Consider

• Energy Codes
• Safety or Building Codes
• Dark Sky Codes or Ordinances
• Lamp/Ballast Disposal

49
Lighting Energy Standards, LEED Energy Tax Bill
Energy standards are authorized models used to
define design criteria to meet or exceed code
requirements.
National Energy Standards

• ASHRAE/IESNA 90.1 2004
• Advanced Energy Design Guide for Small Office
  Buildings
• IECC 2003 (next release due January 2006)
• USGBC LEED 2.1 (next release 2.2 due First of
  2006)
• Advanced Buildings Benchmark V1.1 (V2 due spring
  of 2006)
• CHPS (schools only, started in California but
  followed in Washington and Massachusetts and work
  has started on a national version)
• CEC Title 24 2005

50
Lighting Energy Standards, LEED Energy Tax Bill
Energy Codes define the maximum usage, not the
optimum design.
Lighting Energy Codes

• Determine a power density rate and lighting
  control requirements for allowable energy
  consumption for whole buildings, spaces, or
  occupancy
• Typically expressed in Watts per Square Foot
  (W/SF) as Lighting Power Density (LPD)
• Can include minimum efficiencies for equipment
  typically expressed in Lumens per Watt
• States adopt standards or criteria and enforce as
  code

51
Lighting Energy Standards, LEED Energy Tax Bill
EPACT requires all states to have an energy code
equal or better than 90.1-1999
Lighting Energy Codes
52
Lighting Energy Standards, LEED Energy Tax Bill
EPACT requires all states to have energy code
equal or better than 90.1-1999
Lighting Energy Codes/Standards
Pending approval September 2005 LEED is a
voluntary program and follows ASHRAE or local
energy codes as a prerequisite.
53
Lighting Energy Standards, LEED Energy Tax Bill
EPACT requires all states to have energy code
equal or better than 90.1-1999
Lighting Energy Codes/Standards
Pending approval September 2005 LEED is a
voluntary program and follows ASHRAE or local
energy codes as a prerequisite.
54
Lighting Energy Standards, LEED Energy Tax Bill
Safety Building Codes

• Determines minimum amount of light and can be
  contradictory to energy codes
• Emergency lighting
• Accessibility codes (ADA and the like)
• May require energy code compliance

55
How Leviton is Ready to Support Energy Programs
Lighting Control Requirements
56
Energy Savings Using Sensors
Occupied Area Typical Energy Savings
Private Office 13 to15
Open-Plan Office 20 to 28
Classroom 40 to 46
Conference Room 22 to 65
Bathrooms 30 to 90
Corridors 30 to 80
Source Leviton Manufacturing
57
Summary

• Identify end users who may benefit from EPAct,
  Advance Optanium, and lighting control
  technology
• Educational
• Healthcare
• Property Management Firms
• Warehousing and distribution centers
• Lighting intensive industrial users

58
Summary - continued

• Understand the application choices
• High-Efficiency electronic ballasts
• Energy-saving T-8 lamps
• Lighting controls
• Ballast factor
• Mercury vapor being discontinued
• Inform end users of D.O.E. legislation affecting
  magnetic ballasts

59
Summary - continued

• Understand the application of ballast factor
• Present the benefits of EPAct
• Adjust your inventories to include IntelliVolt
  designs where appropriate
• Fewer SKUs for both you and your customer
• 2nd generation design
• Lower total harmonic distortion