MEEA Policy Webinar: The Growth of Utility Energy Efficiency Programs in the Midwest over the Last Ten Years

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The MEEA Policy Webinar took a regional look at the rapid growth of utility energy efficiency programs over the last decade. Dan York, from ACEEE, presented on the newly released ACEEE report Three Decades and Counting: A Historical Review and Current Assessment of Electric Utility Energy Efficiency Activity in the States . Dan focused on the Midwest region and the growth of utility energy efficiency programs. Diane Munns, from MidAmerican Energy Company, spoke on the utility’s program approach, lessons learned, and achievements from the company’s energy efficiency programs. Karen Rhodes, from Xcel Energy, discussed the utility's program growth, lessons learned, and the benefits of the utility's long term commitment to energy efficiency. The webinar concluded with attendees joining the discussion with the presenters, and asking several questions. For additional information, or if you have any questions, please contact Jessica Collingsworth at jcollingsworth@mwalliance.org or at (312)784-7247.

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MEEA Policy Webinar: The Growth of Utility Energy Efficiency Programs in the Midwest over the Last Ten Years

  1. 1. MEEA Policy Webinar The Growth of Utility Energy Efficiency Programs in theMidwest over the Last Ten Years September 6, 2012
  2. 2. MEEA’s Role in the Midwest• Nonprofit serving 13 Midwest states• 10+ years serving states, energy offices, utilities and communities• Staff of 25 in Chicago• Actions – Designing & Administering Energy Efficiency Programs – Evaluating & Promoting Emerging Technologies – Regional Voice for DOE/EPA & ENERGY STAR – Coordinating Utility Program Efforts – Delivering Training & Workshops – Advancing Energy Efficiency Policy – Promoting Best Practices
  3. 3. The EE Story (Current)• Now: Low hanging fruit still around – ‘Traditional’ suite of incentive programs • Lighting, refrigerators, C&I – CFLs, lighting are 70%+ electric savings – HVAC/water heaters most of gas savings • Challenging for gas utilities to meet goals – Some exploration of behavior change – Some piloting of new areas – Challenge of updated building codes and increasing appliance standards
  4. 4. MEEA’s Program HistoryCurrent Programs:• Refrigerator Recycling (2002 – present)• Building Operator Certification (2003 – present)• Lights for Learning (2004 – present)• HVAC Training and Retail Incentives (2008 – present)• Home Performance with ENERGY STAR (2009-present)• BPI and Building Science Training (2010-present)Early Programs:• Change A Light (2001 – 2008)• Midwest Building Solutions (2005 – 2006)• Room AC Recycling (2005 - 2006)• LIHEAP CFL Program (2006 - 2007)
  5. 5. The EE Story (Future)• Future: Finding a new portfolio – Lighting savings going down – Some program saturation – Need ‘new’ programs • Whole home (HPwES, air sealing, etc) • Systems work (HVAC systems, smart homes, etc) • Behavior programs (changing the customer habit) • Education • Building Energy Codes (adoption, training and compliance_ – Challenges • Cost effectiveness (non-energy benefits not counted) • More complex (contractors, systems, etc)
  6. 6. Future Midwest Efficiency Targets and Funding 2010 $1.06 billion 2015 $1.58 billion Minnesota Wisconsin 1.5% elec current 0.63% elec currently 1.5% gas current 0.48% gas currently Michigan 1% elec by 2012 0.75% gas by 2012 Iowa Ohio 1.4% elec currently 2% elec by 2019 1% gas currently gas in discussion Illinois Indiana 2% elec by 2015 2% elec by 2019 1.5% gas by 2017 gas none yet Kentucky 2010 EE funding Voluntary elec and gas 2015 EE funding Missouri (projected) IRP processSept 2011
  7. 7. Estimated Annual Investment in Energy Efficiency in the Midwest $1.800 EERS Legislative Legislation Committee • IL Gas • WI EERS $1.600 Admin Order overturned • IN Electric Earlier Statewide EE $1.581 $1.400 • MN Admin Order EERS Legislation • WI Electric, 1983 – Pilot legislation Gas • MI Electric, 1991 – CIP requirement $1.200 adopted Gas • OH Electric Exec Order Earlier Statewide EE • IA Gas, $1.191 $1.000 Billions • IA Electric 1990 – Initial legislation 1996 – Legislation $0.800 updated EERS Legislation • IL Electric Earlier Statewide EE • MN Electric, $0.600 • WI Gas 1999 - Public Benefit Fund Adopted $0.400 $0.390 $0.200 $0.000 2002 2013 2000 2001 2003 2004 2005 2006 2007 2008 2009 2010 2012 2014 2015 2011January 2011
  8. 8. Growth of MEEA Staff3025 25 2420 1815 15 1210 10 10 10 7 8 Total MEEA Staff5 5.50 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12
  9. 9. Growth of MEEA Membership160 147140 134120 119100 10180 7460 56 40 40 43 4640 Total 26 Membership20 0 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12
  10. 10. Growth of MES Conference Attendance600500 483 408400 375 301300 274200 199 Total MES Conference 174 148 Attendance100 0 0 0 0 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12
  11. 11. Growth of MEEA Programs14 1312 1110 98 86 6 6 5 5 5 54 3 Total Number of Programs20 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12
  12. 12. Growth of MEEA Policy14 Initiatives 12 1212108 6 66 5 54 4 3 Policy Initiatives20 0 0 0 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12
  13. 13. Our Presenters• Dan York, ACEEE – Report , “Three Decades and Counting” – What has happened in the Midwest• Diane Munns, MidAmerican Energy – Overview of Utility’s Program Approach – Lessons Learned from 10 years of EE programs• Karen Rhodes – Overview of Utility’s Program Growth – Lessons Learned – Benefits of Utility’s Long-term Commitment to EE
  14. 14. Three Decades and Counting: Midwestern Foundations of Customer Energy Efficiency Programs Dan York, Ph.D., Utilities Program DirectorAmerican Council for an Energy-Efficient Economy dwyork@aceee.org 608-243-1123 http://aceee.org
  15. 15. American Council for an Energy-Efficient Economy (ACEEE)The American Council for an Energy-Efficient Economy is a nonprofit, 501(c)(3) organization that acts as a catalyst to advance energy efficiency policies, programs, technologies, investments, and behaviorsACEEE was founded in 1980 by leading researchers in the energy field. Since then we have grown to a staff of more than 50. Projects are carried out by ACEEE staff and collaborators from government, the private sector, research institutions, and other nonprofit organizations. 15
  16. 16. Roots of today’s customer energy efficiencyprograms go back 30+ years• Programs arose in the 1970s as responses to energy “crises” and environmental concerns.• Next phase was utility “demand-side management,” (DSM) which grew rapidly in 1980s; practice became fairly widespread.• By 1990s DSM and “integrated resource planning” (IRP) were well established. 16
  17. 17. Rise of DSM and IRPDSM and IRP marked fundamental shifts in utility planning and operation; two key new paradigms: (1) Customer demand could be affected by actions and initiatives taken by utilities working with customers; and (2) Energy efficiency is an energy resource capable of substituting for energy supply resources in order to meet customer energy needs. 17
  18. 18. Midwestern Pioneers of Customer Energy Efficiency ProgramsDSM and IRP was not just a “coastal” idea (California, the Pacific Northwest and the Northeast).Three Midwestern states were among the pioneering states to enact DSM and IRP in 1980s (with some program roots in the 1970s): • Iowa • Minnesota • Wisconsin 18
  19. 19. ACEEE began tracking and comparing state utility energy efficiency programs in 2000• ACEEE’s 1st Utility Scorecard published in 2000 based on 1993 and 1998 data; results? • MN #5 • IA #7 • WI #8• ACEEE’s Utility Scorecard Update published in 2002. No total composite scoring, but MN, IA and WI remained among leaders.• Same story for ACEEE’s 3rd National Scorecard on Utility EE programs: IA, MN and WI in top 15 on different metrics (spending and savings). 19
  20. 20. “Surprise” Twist in the Story of IRP and DSM: “Deregulation” and “Restructuring”State efforts to deregulate electricity markets led to a 50% decline in DSM spending as such programs didn’t seem to fit the new utility business model.Efforts to preserve customer energy efficiency programs led to new funding mechanisms (“public benefits charges”) and new administrative structures, in some cases non-utility administration of programs. 20
  21. 21. Utility Customer Energy Efficiency ProgramSpending 1993-2010 NOTE: Natural gas EE programs existed before 2006; ACEEE began tracking natural gas programs in 2006 as data first became available for this type of national tracking .
  22. 22. 2000s: Customer EE programs rebound andaccelerate to reach new heights• In 2006 ACEEE published its first State Scorecard, which included metrics for a variety of state level policies and programs; utility programs largest single share of score.• Scoring for utility and public benefits energy efficiency programs includes policies supporting such programs, such as EERS, decoupling or lost revenue adjustment, and shareholder incentives for successful customer EE programs.
  23. 23. The Midwest’s Early Pioneering States:IA, MN and WI, have continued to be leaders forUtility and Public Benefits Policies• 2008 State Scorecard for just Utility and Public Benefits Policies: • Minnesota: ranked 4th • Iowa: 9th • Wisconsin: 10th• 2009 State Scorecard • Minnesota: 5th • Iowa: 9th• 2010 State Scorecard • Minnesota: 5th • Wisconsin: 7th • Iowa: 9th
  24. 24. Biggest News Story of 2000s: “Rapid StartStates” burst onto the Midwestern EE Scene• Policies were enacted in Ohio, Michigan and Illinois that rapidly increased the funding and commitment to customer energy efficiency programs. Prior to these policies, there had been little funding for such programs in these states.• ACEEE research has shown that these states (and most others with EERS) are largely meeting savings targets. They have quickly ramped up programs.• And promising recent development: Missouri is on the way with new policies and regulatory decisions to support a greatly expanded portfolio of customer programs and utility investment in customer energy efficiency.
  25. 25. The 2011 Scorecard Rankings: All EE Policies (not just utility and public benefits policies)
  26. 26. Most Improved States (2011)
  27. 27. Electricity DSM Budgets 2009 vs. 2010 4.50% 4.00% 3.50% 2010 Budgets as % of Revenues 3.00%Budgets as % of Revenues 2009 Budgets as % of Revenues 2.50% 2.00% 1.50% 1.00% 0.50% 0.00%
  28. 28. Electricity Savings 2008 vs. 2009 2.50% 2.00%Savings as % of Retail Sales 2009 Savings as % of Retail Sales 2008 Savings as % of Retail Sales 1.50% 1.00% 0.50% 0.00%
  29. 29. Why do it? Top reason: cheapest resource availableThe cost of saving energy vs. generating it from new sources. 12 Levelized cost of electricity (cents/kWh) (2007$) 10 8 6 4 2 0 Energy Efficiency Wind Natural Gas Coal Nuclear (a) Friedrich et al. 2009 (b) Generation costs from Annual Energy Outlook 2009 29
  30. 30. What’s Ahead? Changes and Challenges• Programs are stretching to meet and sustain high savings.• Continuing economic slow-down dampens program activity and impacts.• Codes and standards are moving baseline levels of energy efficiency upward.• New technologies and program approaches are emerging to capture additional savings. 30
  31. 31. More Changes and Challenges• “Smart grid” anyone? Much hype on benefits, including energy efficiency…experience to date limited, much to learn.• As we seek high savings from programs, importance of creating a new business model for utilities and energy efficiency becomes more critical (effectively addressing utility financial interests)• And what about new environmental objectives, especially the possibility for renewed and expanded efforts to reduce GHG?• Oh, and then there’s turmoil and changed outlooks for natural gas markets. 31
  32. 32. ReferencesThree Decades and Counting: A Historical Review and Current Assessment of Electric Utility Energy Efficiency in the States. D. York, P. Witte, S. Nowak and M. Kushler. June 2012. ACEEE Report Number U123A National Review of Natural Gas Energy Efficiency Programs. D. York, P. Witte, K. Friedrich and M. Kushler. January 2012. ACEEE Report Number U121The 2011 State Energy Efficiency Scorecard. M. Sciortino, M. Neubauer, S. Vaidyanathan, A. Chittum, S. Hayes, S. Nowak and M. Molina. October 2011. ACEEE Research Report Number E115 32
  33. 33. Energy Efficiency Programs atMidAmerican Energy Company Diane MunnsVice President, Regulatory Relations & Energy Efficiency September 6, 2012
  34. 34. Topics to be Covered• Company overview• Energy efficiency programs• Efficiency achievements• Benefits of long-term commitment to energy efficiency 34
  35. 35. Company Overview • Headquartered in Des Moines, Iowa MINNESOTA • 3,500 employees WISCONSINSOUTH DAKOTA • 1.4 million electric and natural gas customers in four IOWA Midwestern states NEBRASKA ILLINOIS • 7,432 net MW generation capacity(1) KANSAS MISSOURI • Generating capacity by fuel type(1) – Coal 45% – MW owned gas Net Natural in operation and under construction as of Dec. 31, 2011 (1) 17% – Wind 31% – Nuclear and other 7% 35
  36. 36. Programs• Iowa, Illinois, South Dakota and Nebraska• Gas and electric programs• For every customer class, low income• Audits, education and training• Incentives (prescriptive, custom and dealer)• Pilots 36
  37. 37. AchievementsSince 1990, MidAmerican Energy’s Iowa energy efficiencyprograms have:• Saved approximately 10.5 million MWh and approximately 500 million therms• Been utilized approximately 395,000 times by electric customers and 315,000 times by gas customers• Installed or rebated approximately 2.5 million compact fluorescent bulbs• Audited approximately 125,000 existing homes• Certified approximately 30,000 energy-efficient new homes• Planted more than 520,000 trees through community and residential tree-planting programs 37
  38. 38. Long-Term Benefits• Regulatory confidence and support• Customer awareness• Company culture change• Trade ally, contractor, architect, builder awareness• Customer satisfaction• Economic development• Market transformation 38
  39. 39. Energy Efficiency Portfolio Growth at Xcel Energy Karen Rhodes Manager, Energy Efficiency Marketing September 6, 2012
  40. 40. Xcel Energy Combination electricity and natural gas energy company  3.4 million electricity customers  1.9 million natural gas customers  Serve 8 states: CO, MI, MN, NM, ND, SD, TX, WI Energy efficiency outreach  Both fuels as applicable  Longest running portfolio in MN 40
  41. 41. Next Generation Energy Act of 2007 Provides goals for energy efficiency programs in Minnesota Sets minimum energy savings goal of 1.0% of retail energy sales Establishes target energy savings goal of 1.5% Applies to both electricity and natural gas 41
  42. 42. MN Electric Portfolio Achievements 500 $90 450 $80 •Since 2000,Energy & Demand Savings 400 $70 energy savings 350 have increased $60 $ (Millions) 300 90% $50 250 $40 200 •Cost per kWh $30 150 has only 100 $20 increased 24% 50 $10 0 $0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 MW GWh Expenditures 42
  43. 43. MN Gas Portfolio Achievements 1,400,000 $14 1,200,000 $12 •Since 2000, 1,000,000 $10 gas savingsDth Savings $ (Millions) 800,000 $8 have increased 150% 600,000 $6 400,000 $4 •Cost per Dth has increased 200,000 $2 160% 0 $0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Dth Expenditures 43
  44. 44. Key Success Factors Regulatory compact Administrative oversight of programs Continuity in the market  Builds awareness of energy efficiency programs  Increases customer willingness to make financial investment Trade partner engagement Innovative and evolving offerings 44
  45. 45. 45
  46. 46. Questions & Discussion• Please type your question into the question box.• This Webinar is being recorded, and the slides will be posted to the MEEA website early next week.
  47. 47. Upcoming MEEA Policy Webinars• Thursday, October 11 at 1pm CDT – A Midwest Look at the Better Buildings Challenge• Thursday, November 29 at 1pm CDT – The New Political Landscape for Energy Efficiency
  48. 48. Join the MEEA Policy Committee Open to all MEEA Members• Current Committee Chair – Diane Munns• Next Call Scheduled for Monday, September 17 at 10 am CDT.• If you would like to participate, please contact Jessica Collingsworth at jcollingsworth@mwalliance.org or (312)784-7247
  49. 49. The EE Story (Future)• Future: Finding a new portfolio – Lighting savings going down – Some program saturation – Need ‘new’ programs • Whole home (HPwES, air sealing, etc) • Systems work (HVAC systems, smart homes, etc) • Behavior programs (changing the customer habit) • Education • Building Energy Codes (adoption, training and compliance) – Challenges • Cost effectiveness (non-energy benefits not counted) • More complex (contractors, systems, etc)
  50. 50. Contact Info Stacey Paradis Deputy DirectorMidwest Energy Efficiency Alliance 312-784-7267 sparadis@mwalliance.org www.mwalliance.org

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