cooper understanding utilities

8/3/2019 Cooper Understanding Utilities

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Building Code Assistance ProjectEnergy Codes Stakeholder Meeting

Adam Cooper

Washington, DCDecember 7th, 2011


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Agenda

Energy efficiency in the U.S.

Expenditures, budgets, impacts

Energy efficiency resource standards

Understanding the utility-regulatory bodyrelationship within the context of energyefficiency programs, codes, and standards

IEE potential study on building energycodes

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Electric efficiency budgets andLBNL forecast

3

2.73.2

4.4

5.4

6.8

7.5*

12.4**

0

2

4

6

8

10

12

14

2007 2008 2009 2010 2011 2020

Rate-PayerFundingforEE

($Billion,

nominal)

*LBNL MED Forecast

**LBNL HIGH Forecas

Electric Efficiency Budgets (2007-2011 and

2020 LBNL Forecast)


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Savings from DSM programs(2007-2010 & 2011 forecast)

4

69.2

85.392.6

112.5

125+*

0

20

40

60

80

100

120

140

2007 2008 2009 2010 2011

TWh

U.S. Electric Efficiency Impacts

(2007-2010 & 2011 Forecast)

* IEE Projection


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Energy efficiency resourcestandards (EERS)

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State savingstargets areincreasingannually

How will utilityenergy efficiencyprogramadministratorsmeet future year

targets?

Source: ACEEE


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Utility-Regulator interests

Prudent use of ratepayer funds

Cost recovery (program, fixed)

Earnings potential (supply, demand) Factors considered when evaluating

energy efficiency program options Cost-effective

Scalable

Measurable

Energy savings

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Energy efficiency portfolios musttransition to new programs

Two clear factors that will change the wayutility program administrators manage theirenergy efficiency portfolios

Energy savings targets increasing in EERSstates

Impact of federal lighting standards (EISA)

Incremental watts savings from current lighting programs Cost-effectiveness of advanced lighting portfolio approach

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Example: Watts saved by various replacementtechnologies before and after EISA

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Source: Ecos, Presentation to IEE Management Committee, June 2011

2014 2013 2012


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2011 Research Efforts

IEE developed two reports dealing with buildingenergy codes and appliance efficiency standards.

The first report projected potential energy savings if

national codes and standards follow a moderate oran aggressive pathway relative to AEO 2011.

The second report identified potential engagementopportunities for utilities to secure energy savings

through a codes and standards program.

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Impact of codes and standards ontotal U.S. electricity consumption

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4,089

3,738

3,533

2,500

2,700

2,900

3,100

3,300

3,500

3,700

3,900

4,100

4,300

2008 2010 2012 2014 2016 2018 2020 2022 2024

TWh

Baseline Forecast

Moderate Scenario

Aggressive Scenario

Moderate:351 TWH

Aggressive:556 TWH

Source: Assessment of Electricity Savings in the U.S. Achievable through NewAppliance/Equipment Efficiency Standards and Building Efficiency Codes (2010-2025)

AEO 2011forecasts electricityconsumption toincrease by 364

TWh (2008-2025);approximately 10%growth in loaddemand


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Summary of Codes and StandardsImpact in 2025

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Building codes savings account for 3% reduction in forecastedbaseline usage

Load demand forecasted to increase by 10%, so potentialsavings from codes relative to estimated growth in load demandis 30%

Baseline

Forecast (TWh)

Moderate

Scenario (TWh)

Aggressive

Scenario (TWh)

Electricity Use 4,089 3,738 3,533

Savings from Building Codes 123 129

Savings from Equipment Standards 228 427

Total Savings 351 556

Savings (% of Baseline) 8.6% 13.6%



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Why is this important?

Our results show savings from moderate changes tocodes and standards could offset/dampenanticipated growth in electricity demand by 2025.

Changes in codes and standards make itincreasingly challenging to achieve energy savingsthrough traditional EE programs

In some states, utilities incorporate codes and

standards into their traditional energy efficiencyprogram portfolios.

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Source: Integrating Codes and Standards Into Electric Utility Energy Efficiency Portfolios


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States/regions with (or considering)

utility supported codes and standards

CaliforniaC&S program accounted for approximately 10% of 2006-2009 program cycle goals.

Massachusetts1/2 of population reside in municipality with stretchcode.

MinnesotaNext Generation Energy Act allows for energy savingsfrom building codes to count towards EERS goals.

Arizona1/3 of energy savings from building energy codes cancount towards Electric Energy Efficiency Standard.

Pacific NorthwestWashington and Oregon have recorded 90%

compliance.

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Source: Integrating Codes and Standards Into Electric Utility Energy Efficiency Portfolios


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Evaluated Savings from Codes and StandardsPrograms, California IOUs (2006-2009)

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Source: CPUC-ED, Energy Efficiency Evaluation Report for the 2009 Bridge FundingPeriod, January 2011.

Note: 2010-2012program cyclesavings estimate is837 GWh


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Tucson Electric Power-- Building Code

Support Pilot Program (2011-2012)

Better prepare code officials and building professionals to adhere toexisting standards;

Provide data and market insight to document the specific localbenefits of code enforcement, and recommend energy codechanges over time;

Ensure utility incentive programs align well with local energy codes;

Collaborate with relevant stakeholders to help build a more robustcommunity working to advance strong and effective building energycodes across the local jurisdictions within TEP; and

Advocate for energy code updates over time

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Salt River Project

SRP not under Arizona CorporationCommission regulatory purview

Board of directors set goal of 20% retailsales in 2020 to be from sustainableresources, codes and standards included.

By 2016, codes related energy savingsforecasted to reach 80,000 MWh per year,equivalent to1-2% of goal.

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What is SRP doing to supportcodes? Work with municipal jurisdictions to help accelerate the

implementation of more robust building energy codes for newconstruction and major remodels. SRP will count no more than 50 percent of the energy savings resulting from the

adoption of more efficient model energy codes beyond current code levels and

credit savings towards its sustainable portfolio.

SRPs efforts include providing resources for jurisdictions to purchase energy code books and manuals

providing funds to support energy code trainers

providing technical support to make energy code trainings available by producingDVDs

providing physical space for energy code trainings

supporting adoption of the 2009 and 2012 IECC by the 19 local jurisdictions intheir service territory

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Pacific Northwest, cumulativeenergy savings (1978-2009)

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Source: Northwest Power and Conservation Council

18%


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Building energy codes and utilities

Utilities can play an integral role in thedevelopment of energy efficient buildingsat a federal, state, and local level by

supporting/providing:Code development

Incentives for high efficiency building products

TrainingCompliance enhancement infrastructure

Awareness

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Code development and education

A utility can help design code language so that itis simplified, leading to better compliance rates.

Conventionally speaking, a simple code is easier to

enforce than a code that is hard to understand. Providing training opportunities and materials to

building professionals and code officials helpstransform the market.

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Compliance enhancement

Compliance enhancement via direct utilityinvolvement is a sticky wicket.

Rebating third-party inspectors and plan

reviewers seems to be the right step. But claiming the incremental savings could be

challenged by some parties/be a difficultconversation with regulators as the code is thelaw. Moreover, accepted EM&V standards are needed.

HERS can help with the measurement issue

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California Evaluation Model(a prove then claim approach)

Potential Savings Analysis: A per unit energy savings is calculated for theincremental benefit of adopting a new or more stringent code or standard atthe statewide level.

Compliance: Realized energy savings are estimated by discounting thepotential energy savings estimates for each measure by the compliance

level associated with each measure. Utilities can play a role in improvingcode compliance rates by sponsoring workshops and training programs.

Normally Occurring Market Adoption (NOMAD): Energy savings areadjusted for the naturally occurring adoption of more energy efficientappliances, equipment, and building techniques in the marketplace.

Attribution: Final statewide energy savings are estimated by discounting forhow much the utilities efforts contribute to codes and standards adoption.,

Allocation: Final statewide energy savings are assigned to each utility basedon the IOUs percentage of statewide electricity sales.

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Attribution

The attribution step in the California methodology assesses utilitycontributions based on five factors: 1) Importance of the energy efficient product in the market;

2) Effort needed for test methods and research;

3) Innovation of the new standard;

4) CASE study preparation;

5) Work with stakeholders in the public process.

A Delphi Panel assigns a value for each category based on importance and a contributionvalue for the utility by category. These values are multiplied to produce an attribution scorefrom 0 to 1.

California utilities are pursuing the opportunity to earn proportionate energysavings credit for their successful engagement in federal energy efficiency

standards to the extent that such standards save energy in their serviceterritories. This attribution approach could open up participation to manyutilities whose states do not, themselves, adopt energy efficiencyrequirements for appliances and buildings.

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Beyond code efforts

Optional stretch codes are clearly above andbeyond what the law prescribes. Attribution for community adoption of stretch code is being worked out in MA. CA

has a zero net energy policy goal.

Stretch codes can also inform future base code efforts.

Local ordinances offer another avenue forsavings from buildings via retrofit ordinance Especially in communities with majority renter populations and older walk-up

apartments, there is both large efficiency potential and often political will. A utility-

provided package of financial and technical support to the community, incentivesto landlords, and tenant-focused benchmarking may become the basis for aneffective approach to this hard-to-reach but large and politically importantefficiency market.

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Source: MIT-EESP, Community Engagement: A Potential Transformative Path to GreaterEnergy Efficiency (August 2011)

C id i f d d


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Consideration for code advocatesas they approach utilities

Get familiar with the energy efficiencyplanning cycle of your local utility and theutility-regulatory process

Understand that the regulatory treatmentof energy efficiency programs and theirimpact on the financial interests of the

utility differ from state to state

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R l f k


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Regulatory frameworks supportenergy efficiency programs

Of the top 20 states in terms of EE budgets, 17 have aregulatory framework in place that supports EE

Summary of revenue recovery and incentives:

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Source: IEE Brief. State electric efficiency regulatory frameworks. June 2011.Summary of ratepayer-funded electric efficiency impacts, expenditures, and budgets.January 2011

Number of

statesPending

Lost revenue

recovery9 2

Revenue

decoupling13 9

21 6

3 1

State Regulatory Frameworks: June 2011

Energy Efficiency Incentive

Mechanism

Fixed-cost

recovery

mechanisms

Performance incentives

Virtual power plant


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Appendix

S i b d d i


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Savings by end use and scenarioin 2025

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- 20 40 60 80 100 120 140TWh

Aggressive Scenario

Moderate Scenario

Commercial

Residential

Indu

strial

In the commercial sector, lightingdominates savings potential.

In the residential sector, electronicsshow the largest potential for energy

savings followed by lighting.

In the industrial sector, machinedrives comprise most of the energysavings potential.

Slightly more than half of totalsavings fall into these 4 categories.


E l f ti


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Example of assumptionsBuilding Codes

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For instance, in 2018 ourmoderate scenario assumesprevailing building energycodes will be 25% moreefficient than IECC 2006 and

will have a net efficiencyeffect of 10% more than thebase case code in 2018.

Our modeling captures the10% difference.

We assume full adoptionand compliance with code.



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For more information, contact:

Adam Cooper

Manager

Institute for Electric EfficiencyThe Edison Foundation701 Pennsylvania Ave., N.W.Washington, D.C. 20004-2696

202.508.5550

[email protected]

www.edisonfoundation.net/IEE
mailto:[email protected]://www.edisonfoundatin.net/IEEhttp://www.edisonfoundatin.net/IEEhttp://www.edisonfoundatin.net/IEEmailto:[email protected]

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