ORIENTATION FOR COUNCILORS Energy Efficiency Advisory Council EEAC Consultant Team February 3, 2015
INTRODUCTION ► Many topics and issues could have been on the agenda for the orientation – we selected a subset to summarize and present ► Focus on planning, planning issues, and planning schedule, as background for the process for developing and reviewing the 2016-2018 Plan ► Available to follow up on these issues or other issues ► Will NOT be covering program issues or strategies (topics at workshops) NOR evaluation (EM&V) ► Thanks to DOER, PAs, ISO-NE, and others for slides and graphics, which I have borrowed with my thanks www.ma-eeac.org | 2
MA: NUMBER 1 RANKING | 3
EE IS A SIGNIFICANT ENERGY RESOURCE WITH MANY BENEFITS MA Annual Energy: RSP14 Forecast (GWh) 71,000 69,000 67,000 65,000 GWh 63,000 61,000 59,000 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 RSP14 RSP14-FCM-EEF RSP14-FCM 4
GREEN COMMUNITIES ACT (GCA) ► “…electric and natural gas resource needs shall first be met through all available energy efficiency and demand reduction resources that are cost effective or less expensive than supply.” Section 21(a) ► “Each plan shall provide for the acquisition of all available energy efficiency and demand reduction resources that are cost effective or less expensive than supply and shall be prepared in coordination with the energy efficiency advisory council…” Section 21(b)(1) ► “The council shall, as part of the approval process by the department, seek to maximize net economic benefits through energy efficiency and load management resources and to achieve energy, capacity, climate and environmental goals through a sustained and integrated statewide energy efficiency effort.” Section 22(b) www.ma-eeac.org | 5
PLANNING SCHEDULE PER THE DATES IN GCA STATUTE PAs jointly prepare the draft plan April 30 in coordination with the EEAC EEAC submits its approval or comments July 30 to the PAs PAs submit the plan together with EEAC October 31 approval or comments to the DPU DPU issues a decision on the plan January 31 www.ma-eeac.org | 6
CONTEXT: WHERE DO THE SAVINGS AND BENEFITS COME FROM? 7
ELECTRIC SAVINGS AND BUDGET BY SECTOR, 2013-2015 Electric Lifetime Savings, MWh Electric Budget Electric Lifetime Savings: 40 M MWh Electric Budget: $1.5 Billion 5,830,295 779,384 $487,957,884 $843,044,008 33,669,371 $165,973,663 Electric savings equivalent to building Commercial & Industrial Low Income Residential Commercial & Industrial Low Income Residential ~ 100 MW power plant each year www.ma-eeac.org Presentation Master Title Can Be Added in Master Layout | 8 Savings breakouts by program and initiative are in tables and workshop materials
GAS SAVINGS AND BUDGET BY SECTOR, 2013-2015 Gas Lifetime Savings, Therms Gas Budget Gas Budget: $523,270,039 Gas Lifetime Savings: 937,202,887therms $154,628,516 351,323,511 $260,460,224 500,681,853 $108,181,299 85,197,522 Commercial & Industrial Low Income Residential www.ma-eeac.org Presentation Master Title Can Be Added in Master Layout | 9
ELECTRIC AND GAS BENEFITS BY SECTOR, 2013-2015 Electric Benefits $7 billion Gas Benefits $1.4 billion $2,048,122,010 $561,015,888 $677,221,310 $4,618,244,348 $ 174,988,643 $351,629,628 Commercial & Industrial Low Income Residential www.ma-eeac.org Presentation Master Title Can Be Added in Master Layout | 10
ELECTRIC BENEFITS - COMPONENTS Electric Benefits, 2015 $2.4 Billion $433,784,976 $428,303,982 Note: $226M in $122,327,159 oil benefits, but offset by higher gas use (e.g., $359,399,059 CHP) and $1,033,325,631 associated gas DRIPE Capacity Energy Price Effects (DRIPE) Other Resource Benefits Non Resource Benefits www.ma-eeac.org | 11
GAS BENEFITS - COMPONENTS Gas Benefits, 2015 $480 Million $131,219,440 $249,550,634 $11,819,182 $62,491,983 $24,605,137 Gas Electric Gas Price Effects (DRIPE) Non Gas Non ‐ Electric Benefits Non Resource Benefits www.ma-eeac.org | 12
NON-RESOURCE BENEFITS AND NON-ENERGY IMPACTS ► Non-Resource Benefits (NRBs): term used in DPU orders and in Plan and Report data tables ► Non-Energy Impacts (NEIs): term used in planning and analysis, and in evaluation studies − One difference is that water is a non-energy impact but it is also a resource benefit (therefore water is not in NRBs) ► Examples of Non-Energy Impacts − O&M/maintenance savings − Heating system retrofit, increased safety − Reduced arrearages ► DPU disallowed three NEIs − National security, economic development, and refrigerator/ freezer turn in (e.g., reduced landfill) www.ma-eeac.org | 13
KEY STEPS EARLY IN THE PLANNING PROCESS ► Assessment of potential ► Goals framework and levels of goals ► Budgets and funding ► Cost to achieve savings (cost drivers) ► Cost effectiveness ► Performance incentives for the PAs ► Above “key terms” lead to the Term Sheets ► Priorities for 2016-2018 Plan ► Program strategies and enhancements − Including the program workshops www.ma-eeac.org | 14
ASSESSMENT OF POTENTIAL Recent Studies Relevant to MA Evaluation Penetration/ (EM&V) Potential Results and Analyses Data Assessment of Potential Forecasts of Recent Actual Market Results Changes Program Revisions and Enhancements www.ma-eeac.org | 15
(FROM MARCH 2012): SAVINGS GOALS FOR 2013-2015, INITIAL THOUGHTS Annual Savings Assessment of Potential (% of Retail Sales) (% of Retail Sales) 2013: 2.5% Electric 2014: 2.6% TBD 2015: 2.7% 2013: 1.3% Gas 2014: 1.5% TBD 2015: 1.7% As noted below, it is important to focus on benefits and net benefits goals as well (early in the process, and not just as an output of the cost-effectiveness model at the very end). www.ma-eeac.org 16
LOOKING AHEAD: EE IN THE CLEAN ENERGY AND CLIMATE PLAN Clean Energy Climate Plan Forecast for Energy Efficiency 3.5 3.0 Percentage of Retail Sales 2.5 2.0 1.5 1.0 0.5 0.0 2012 2013 2014 2015 2016 2017 2018 2019 2020 electric gas * Amount determined to meet greenhouse gas reduction targets 17
WHAT GOALS ARE REALLY USED? AND HOW? ► Initially, goals are developed and negotiated using % savings – i.e., annual energy savings as a % of retail sales (in order to put all PAs on a level basis) ► BUT, in the Three-Year Plans and Annual Reports, the % savings goals used for goal development and negotiation are translated into the real goals: − Annual savings (physical units of kWh and therms, not %) − Lifetime savings (savings over the measure lives) − Benefits ($, economic value of the savings, from all fuels) − Net benefits ($, benefits minus costs) ► AND the performance incentives are based mainly on: − “Savings” component – incents achievement of benefits ($) − “Value” component – incents achievement of net benefits www.ma-eeac.org 18
ELECTRIC TERM SHEETS, 2013-2015 | 19
GAS TERM SHEETS, 2013-2015 | 20
COST EFFECTIVENESS, TRC TEST Cost effectiveness is determined using the Total 1. Resource Cost (TRC) Test Benefit cost ratio (BCR) = ratio of total lifetime 2. benefits divided by total costs Benefits = economic value of the savings due to 3. the programs Costs = costs to the PA and the participant that are 4. associated with the program and measure For more detail, see: http://ma-eeac.org/wordpress/wp- content/uploads/TRCMassSave051011frev.pdf www.ma-eeac.org | 21
HOW DOES THE TRC TEST DETERMINE COST-EFFECTIVENESS? TRC test is applied by dividing the total lifetime benefits of a program by the total costs of the program, to create a Benefit Cost Ratio (BCR): Total benefits ($) BCR = Total costs ($) If the BCR is it is considered because benefits exceed ≥ 1.0 cost-effective costs costs exceed < 1.0 not cost-effective benefits 22
COST-EFFECTIVENESS ANALYSIS: TRC TEST RESULTS Total Resource Cost Test, 2015 (In 2013 $) Customer Sector B/C Ratio Net Benefits Benefits Costs Residential (total) 3.25 $491,451,016 $709,881,986 $218,430,970 1. Residential Whole House 3.69 $387,009,318 $530,975,100 $143,965,782 2. Residential Products 3.02 $119,673,067 $178,906,886 $59,233,819 3. Residential Hard-to-Measure - -$15,231,369 $0 $15,231,369 Low-Income (total) 2.08 $61,591,012 $118,357,335 $56,766,322 4. Low-Income Whole House 2.15 $63,234,704 $118,357,335 $55,122,631 5. Low-Income Hard-to-Measure - -$1,643,691 $0 $1,643,691 Commercial & Industrial (total) 3.60 $1,118,367,485 $1,548,901,486 $430,534,001 6. C&I New Construction 4.73 $270,291,168 $342,767,691 $72,476,523 7. C&I Retrofit 3.41 $852,053,097 $1,206,133,794 $354,080,698 8. C&I Hard-to-Measure - -$3,976,780 $0 $3,976,780 GRAND TOTAL 3.37 $1,671,409,513 $2,377,140,806 $705,731,293 | 23
REGIONAL AVOIDED COST STUDY ► Six New England States (ISO-NE area) ► Conducted every three years ► Provides consistent values for avoided costs throughout all New England states – FOR ALL MA PROGRAMS ► Used for Energy Efficiency programs only ► To be completed by March 31, 2015 ► Will be used in next Three-Year Plans (2016-2018) www.ma-eeac.org 24
Recommend
More recommend
