Custom Utility Rebates and Measurement & Verification

Three ways utilities pay for savings

Utility efficiency programs generally determine savings in one of three ways. Knowing which applies tells you how much paperwork, measurement and lead time a project needs.

In Texas, the statewide Technical Reference Manual (TRM) provides deemed savings for nonresidential measures in Volume 3 and standardized M&V protocols in Volume 4; Version 13.0 applies to program year 2026. Measures that are not in Volume 3 must go through a custom or M&V path if the program offers one. The PUCT's efficiency rule, 16 TAC § 25.181, requires every program to use an industry-accepted evaluation or M&V protocol and bars final payment until verification shows the savings will be achieved.

How a custom application usually runs

1. Eligibility check. Confirm the account, the measure type and the pathway with the program. Ask for the program manual and any custom-calculation template.
2. Pre-approval application. Submit the project scope, an estimate of savings and the proposed M&V approach. Many programs set a minimum project size for custom or M&V paths.
3. Baseline. The program inspects existing conditions, or you collect pre-installation data under the agreed plan. Existing equipment usually must stay in place until this step is approved.
4. Approval and incentive reservation. The program confirms acceptance and, often, reserves an estimated incentive.
5. Installation. Install the measure as described. Changes to scope may require re-approval.
6. Post-installation verification. Collect reporting-period data, submit the savings report, and allow a post-inspection.
7. Payment. The incentive is calculated on verified savings, which may be higher or lower than the estimate.
8. Evaluation. In Texas, the PUCT's evaluation contractor may survey participants or inspect sites after the fact to confirm savings across the program.

What Texas programs say about custom and M&V paths (as of October 2026)

• Oncor. The 2026 Commercial Standard Offer Program manual offers an M&V pathway, at Oncor's discretion, for large commercial projects with a minimum incentive of $10,000. Oncor engineering must review the scope and M&V plan before deciding whether to accept the project, and M&V projects include pre- and post-measurement data reviews. The manual excludes repair, maintenance and behavioral measures, and measures that save energy through maintenance, commissioning, operational changes or controls without an equipment efficiency upgrade.
• TNMP. The 2026 Commercial Market Transformation Program manual says custom projects can qualify at a possibly different incentive value, that all custom measure calculations are reviewed by the statewide evaluator for pre-approval, and that each M&V plan requires specific pre- and post-installation data collection.
• El Paso Electric. The Large Commercial Plus program lists custom M&V projects among eligible project types, and the implementer provides measurement and verification as necessary.
• Austin Energy. The Custom Technologies rebate sets the baseline from Austin Energy's initial inspection and uses field observations and documented operating conditions; Austin Energy states that it will not base rebates on power measurements. Applications must be approved at least 30 days before work begins, and rebates of $50,000 or more need a Texas professional engineer's seal.

Other utilities' 2026 offerings are summarized in Texas utility commercial incentives.

The M&V options, briefly

Most M&V plans follow the International Performance Measurement and Verification Protocol (IPMVP), maintained by the Efficiency Valuation Organization; the current edition is IPMVP Core Concepts 2022. It defines four options:

• Option A, retrofit isolation with key parameter measurement. Measure the parameter that defines the savings (for example, kW/ton or power draw) and estimate the rest. Lower cost; relies on stipulated values.
• Option B, retrofit isolation with all parameter measurement. Measure all the parameters that govern energy use of the affected system, for example continuous power and load metering on a chiller. More rigorous; well suited to a single HVAC system.
• Option C, whole facility. Analyze utility meter data for the whole building. Works when savings are large relative to total use; small single-system savings can be lost in the noise.
• Option D, calibrated simulation. Model the building and calibrate it to measured data. Useful for new construction or when baseline data are missing.

ASHRAE Guideline 14-2023 complements IPMVP with procedures for retrofit-isolation, whole-building and calibrated-simulation approaches, guidance on instrumentation, and an annex on calculating the uncertainty of savings. FEMP's M&V Guidelines Version 5.0, written for federal performance contracts, add ECM-specific guidance. For a plain-language comparison, see IPMVP options explained.

What a good M&V plan contains

1. Measure description and boundary. Which equipment is affected, and where the measurement boundary sits.
2. IPMVP option and the reason it was chosen.
3. Baseline period and conditions. Dates, operating conditions, and the variables that drive energy use (outdoor temperature, load, run hours, production).
4. Reporting period. How long post-installation data will be collected. For cooling equipment, the reporting period should cover the conditions that matter, usually warm-weather operation.
5. Measurement points and instruments. What is metered (kW, kWh, temperatures, flow), sampling interval, accuracy and calibration.
6. Calculation method. The baseline model and how adjustments for weather or load are made.
7. Peak demand method. How peak kW reduction is determined, since Texas programs pay per kW of summer peak reduction.
8. Non-routine adjustments. How changes unrelated to the measure (new loads, occupancy changes, other projects) will be handled.
9. Responsibilities and reporting format. Who collects, analyzes and signs off the data.

Why programs reject or reduce custom claims

• Work started before approval. The most common and least recoverable mistake.
• Baseline equipment removed or changed before inspection. Without a verified baseline there is nothing to compare against.
• Measure classified as maintenance or operational. Some programs exclude these by rule.
• Weak baseline data. Too short a period, or data collected under conditions unlike the reporting period.
• Uncontrolled changes. A setpoint change or a second project in the same period muddies the result.
• Savings that would have happened anyway. Program evaluators estimate free-ridership, the share of savings that would have occurred without the incentive, as part of verifying program results.

Practical metering for HVAC projects

For a single chiller, rooftop unit or refrigeration system, the measurement kit is usually modest. A true-power meter or logger on the equipment's electrical feed records kW and kWh. Temperature sensors on the relevant streams (chilled-water supply and return, supply and return air, or refrigerant line temperatures) plus outdoor air temperature capture the conditions that drive load. Where water flow can be measured, cooling output in tons can be calculated directly, which turns the result into kW/ton. Log at short intervals so that peak behavior is visible, check sensors against each other at the start and end of each period, and keep notes of anything that changed on site. Where a building automation system already trends some of these points, confirm its sensors are calibrated before relying on them.

M&V is worth doing even without an incentive

Many efficiency decisions are made without a utility incentive. M&V still matters, because it turns a vendor's claim or a calculator estimate into a savings figure for your equipment that finance teams, auditors and sustainability reporting can rely on. For a single system, an isolated approach under Option A or B is usually affordable: a few weeks of power and temperature logging before and after the change, analyzed with a weather or load adjustment. See how to read an M&V report for what the finished product should look like.

Where CryogenX4 fits

CryogenX4 describes its product as a one-time treatment injected into existing systems while they run, intended to remove insulating oil film from heat-exchanger surfaces and improve lubricity. If that works on a given unit, the effect shows up as lower kW per ton of cooling delivered, which is measurable with retrofit-isolation M&V. The company reports energy savings of up to 30% and notes that results vary by equipment condition. Whether a utility program treats a refrigerant-system treatment as an eligible measure, or as maintenance, must be confirmed with the program before the project. Either way, a measured pilot on representative units produces the before-and-after data a custom application or an internal business case needs. See what a CryogenX4 pilot measures.

Next step

Before you approach a program, write a one-page project summary: equipment list with capacities, estimated annual kWh and peak kW savings, proposed IPMVP option, baseline and reporting periods, and metering points. Send it to the program contact with a request for written confirmation of eligibility and pathway.