EERS Committee Meeting August 3, 2020
Potential Study Draft Results Expectations: - Understanding Baseline Efficiencies - What EE Potential is Achievable and at what Cost? - What Needs more Research Draft Results: 7/31/2020 Presentation to EM&V WG: 8/5/2020 Final Draft: 8/14/2020 Final Report: 9/14/2020 Incorporation into Planning: On-Going 2
Potential Study Draft Results Understanding Baseline Efficiencies 3
Potential Study Draft Results Understanding Baseline Efficiencies - Residential 4
Potential Study Draft Results Understanding Baseline Efficiencies - Residential 5
Potential Study Draft Results Understanding Baseline Efficiencies - Residential 6
Potential Study Draft Results Understanding Baseline Efficiencies - Residential 7
Potential Study Draft Results Understanding Baseline Efficiencies – Commercial / Industrial 8
Potential Study Draft Results What EE Potential is Achievable and at what Cost? Electric Plan v Potential Study Natural Gas Plan v Potential Study $1,200 9.00% $250 6.50% 8.00% 5.50% $1,000 $200 7.00% 4.50% $800 6.00% $150 3.50% Millions 5.00% Millions $600 4.00% 2.50% $100 $400 3.00% 1.50% 2.00% $50 $200 0.50% 1.00% $- 0.00% $- -0.50% 2018-2020 2021-2023 Low Mid Max 2018-2020 2021-2023 Low Mid Max Plan Plan Plan Plan Electric Budget % of 2019 kWh sales Gas Budget % of 2019 MMBtu sales 9
Potential Study Draft Results What EE Potential is Achievable and at what Cost? Electric Plan v Potential Study Natural Gas Plan v Potential Study $600 7.00% 5.50% $120 6.00% $500 4.50% $100 5.00% $400 3.50% $80 Millions 4.00% Millions $300 2.50% $60 3.00% $200 1.50% $40 2.00% $100 0.50% $20 1.00% $- 0.00% $- -0.50% 2018-2020 Plan 2021-2023 Plan Low Mid 2018-2020 Plan 2021-2023 Plan Low Mid Electric Budget % of 2019 kWh sales Gas Budget % of 2019 MMBtu sales Potential Study looks only at the cost of kWh savings for electric programs and does not account for fuel neutral costs &savings, notably does not account for 20% of budget going to income-eligible. 10
Potential Study Draft Results Covid-19 Presents Potentially Devastating Barriers 11
Potential Study Draft Results What are the Top 10 Measures for Residential Electric? Lighting still plays an outsized role, which EM&V WG is working with Dunsky to try to refine given high saturation and LED market share of new sales. Refrigeration and electric hot water also show promise. 12
Potential Study Draft Results What are the Top 10 Measures for C&I Electric? Lighting still plays an outsized role, which EM&V WG is working with Dunsky to try to refine given high saturation and LED market share of new sales. HVAC, VFDs, Controls, Hot Water Heating also show promise. 13
Potential Study Draft Results What are the Top 10 Measures for Resi Natural Gas? Behavior Savings, Furnaces and Domestic Hot Water 14
Potential Study Draft Results What are the Top 10 Measures for C&I Natural Gas? Steam Traps, Boilers and Controls, Heat Recovery all present opportunities. 15
Potential Study Draft Results What Next? - Review with Dunsky, refine findings, including ADR - Consider Doing More C&I Market Characterization (i.e., how efficient are we already?) - Impact of Covid on Barriers to Participation - New Construction Baselines 16
Break 17
July 1 Draft - 2021-2023 Electric Plan 3-Year 2021-23 budget • 95% increase over combined 2018-2020 actual and planned budget • 3-Year annual kWh savings at 4.2% of 2019 sales Lifetime kWh savings • 29% increase over last term • Lifetime MMBtu savings 31% increase over last term 18
July 1 Draft - 2021-2023 Gas Plan 3-Year 2021-23 budget • 43% increase over combined 2018-2020 actual and planned budget • 3-Year annual MMBtu savings at 2.8% of 2019 sales Lifetime MMBtu • savings 12% increase over last term 19
Stakeholder Comment Response Savings Targets • Strong push from majority of commenters to increase savings • NH Utilities are working to increase savings for September filing • Reviewing measures and approaches suggested in comments • Reviewing other areas for increases Budgets • Increased savings targets likely to have a budget impact of $60 - $80M for Electric, $4 - $8M for Natural Gas • 7/1 CTA is reasonable and in-line with other states, especially given significant ramp-up needed • More volume beyond 7/1 Draft requires going after customers/projects that are harder to reach 20
Marketplace Risks Uncertainty in Marketplace creates significant risk for additional savings • 2020 experience showing uptake for residential, with high incentive levels • 2020 experience for small business mixed • 2020 experience showing much more caution on capital projects for large business • Longer planning process for large projects means current caution impacts 2021 as well • Economic trend and potential additional impacts of COVID-19 going into 2021 are difficult to predict 21
Customer Research – Luth Research, Covid-19 Impact Study 79% of C&I customers (56% for residential) indicate some to a very significant • impact on their finances due to COVID-19. 22
Customer Research • 56% of C&I customers (40% for residential) have concerns about paying their bills in general due to COVID-19; 49% of C&I customers (36% for residential) have concerns about paying their utility bills. 23
Customer Research • Concern is more pronounced within certain C&I segments, such as within Food Service/Restaurants, Healthcare, Retail/Lodging and Manufacturing. 24
Customer Research • The COVID-19 outbreak has made 1 in 3 residential customers and 15% of C&I customers less likely to install EE upgrades or participate in an energy evaluation/audit. 25
Customer Research • 21% of all residential and 10% of all C&I customers say they will still have concerns with participating in EE regardless of special safety precautions and protocols implemented. 26
Stakeholder Comment Response To Facilitate a Plan that includes increased savings of 33%(gas) - 46% (electric) over the current term, and 7% - 20% over July 1 Draft, during a pandemic, NH Utilities need Stakeholder Support for: True 3-year planning period • Mid-Term Modification triggers • • Lowering of PI threshold for savings and benefits to the previous level of 65% • Significant Marketing through Proven Approaches (per July 1 Plan) • Predictable phase out of lighting (per July 1 Plan) • Higher SBC and LDAC rates than the July 1 draft 27
Stakeholder Comment Response Suggested areas for additional savings • Electric Heat to Heat Pump conversions • Adding. Determining savings, incentive level and potential quantities • Additional Heat Pumps • Significant increases already built in, but looking at more opportunity • HP water Heaters • Expanding point of sale/instant rebate for customers to spur increased uptake • Behavior Program • Unitil and Liberty – reviewing measure life approach • Eversource - Customer Energy Insights marketing approach leads to additional savings from other measures 28
Stakeholder Comment Response Suggested areas for additional savings • Retail Products Platform • Determining whether RPP may lead to more savings • More non-lighting measures for Small Business • Possibly more food service and HVAC • Large Business - already do significant volume of snow-guns • Codes and Standards • Adding a codes and standards effort to Plan • Included within E* Homes program and Large & Small Business New Construction programs • Developing a framework to achieve savings from Code Compliance by Year 3 • Additional increases beyond these specific items, mostly in C&I, needed to get to higher targets 29
Stakeholder Comment Response Do not plan to amortize costs • Pancaking effect increases customer cost over time Would create a long-term financing need, not short-term debt • • Potential for increases to other costs due to detrimental impacts on utility credit metrics Do not plan to shift to MMBTu Based Goals • Interested in the approach, see suggestion in Utility Presentation from December 9, 2019 EERS Committee Meeting • EERS Committee discussed and did not go in this direction • NHPUC Order 26,322: PUC would consider a pilot and/or study of EO if proposed to test/verify whether to embrace EO at program level. Not planning 25% for Income Eligible • Significant investment already included Additional shifts would require a re-thinking of the broader goals that NH • has for energy efficiency and SBC funds 30
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