The Case for Consistently Treating and Incorporating Energy Efficiency into the Regional Planning Process

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This presentation, entitled "The Case for Consistently Treating and Incorporating Energy Efficiency into the Regional Planning Process" was presented by Senior Policy Manager Kevin Cullather at the Mid-Atlantic Regulatory Conference (MARC) in Rapid City, South Dakota on June 6, 2011.

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The Case for Consistently Treating and Incorporating Energy Efficiency into the Regional Planning Process

  1. 1. Electric Breakout: Cant We All Just Get Along? The Case for Consistently Treatingand Incorporating Energy Efficiencyinto the Regional Planning Process Mid-Atlantic Regulatory Conference Rapid City, South Dakota June 6, 2011
  2. 2. MEEA’s Role in the Midwest• Nonprofit serving 13 Midwest states• 10 years serving utilities, states and communities• Staff of 23 in Chicago• Actions – Advancing Energy Efficiency Policy – Designing & Administering EE Programs – Delivering Training & Workshops – Coordinating Utility Program Efforts – Regional Voice for DOE/EPA & ENERGY STAR – Evaluating & Promoting Emerging Technologies
  3. 3. Transmission• More than 160,000 miles of high voltage transmission lines in the U.S.• The system can be strained for a variety of reasons, including – High growing population centers – Renewable resources not near existing lines – The need to incorporate intermittent power sources – Serving functions for which it may not have been designed to serve• Grid is designed to take supply but how can Energy Efficiency be treated as a dispatched energy supply?
  4. 4. Role of Efficiency and the Grid• EE Can Help Relieve the Grid Strain – Moderates growing energy demand – Reduce peak energy demand – Savings can be quantified and forecasted• EE can help reduce the future demand and the need to build new power plants and transmission lines• Make utilities whole for losing energy sales – Slowed demand defers generation and T&D investments – Allow for lost revenue recovery – Reward utilities for exceeding EE goals
  5. 5. Why EE vs. Just New Transmission?• Cheaper than renewables or supply side options – < 3¢/kWh• Create local jobs and keeps money in local economy – Clean-energy investments create 16.7 jobs for every $1 million in spending. Spending on fossil fuels, by contrast, generates 5.3 jobs per $1 million in spending• No NIMBY or BANANA issues (often opposite effect)• Great PR/Customer satisfaction with EE and utilities• Potential for integration of EE into RPS or Clean Energy Portfolio Standards
  6. 6. Efficiency Combats Dollar Drain• Midwest region - $40 billion per year leaves the economy to pay for imported fossil fuels• Savings potential comes from a combination of EE programs: – Natural gas EE – Electricity EE – Price drop through demand reduction – Reduction of amount and cost of NG used in electric generation• Potential Annual Savings for MW Region – 2010: $4.4 billion – 2015: $7.9 billion – 2020: $10.4 billion
  7. 7. Estimated Annual Investment in Energy Efficiency in the Midwest EERS Legislative Legislation $1.800 • IL Gas Committee • WI EERS Admin Order overturned • IN Electric $1.600 Earlier Statewide EE Admin Order • MN EERS • WI Electric, 1983 – Pilot legislation Legislation $1.581 $1.400 1991 – CIP • MI Electric, Gas requirement adopted Gas • OH Electric $1.200 Earlier Statewide EE Exec Order • IA Gas, • IA Electric 1990 – Initial legislation $1.191 $1.000Billions 1996 – Legislation updated EERS Legislation • IL Electric $0.800 Earlier Statewide EE • MN Electric, • WI Gas 1999 - Public Benefit $0.600 Fund Adopted $0.400 $0.390 $0.200 $0.000 2000 2011 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2012 2013 2014 2015
  8. 8. Future Midwest Efficiency Targets and Funding 2010 $1.06 billion 2015 $1.58 billion Minnesota Wisconsin 1.5% elec current 0.7% elec currently 1.5% gas current 0.4% gas currently Michigan 1% elec by 2012 0.75% gas by 2012 Iowa Ohio 1.4% elec currently 2% elec by 2015 1% gas currently gas in discussion Illinois Indiana 2% elec by 2015 2% elec by 2019 1.5% gas by 2017 gas none yet 2010 EE funding Kentucky Voluntary elec and gas 2015 EE funding Missouri (projected) IRP processMay 2011
  9. 9. What’s Keeping EE from Being Treated as Generation?• No pure measuring of kWh/therm generation and so need way to count energy NOT used!• Need consistent valuing of EE across state/utility boundaries – A way to determine kWh savings from a CFL should be the same no matter the state (even if kWh savings are different)! – EM&V results in the region (and nation) are divergent, even on the same EE program implemented by the same company• A kWh/therm of EE needs to become commoditized in case of tradable Clean Energy Port Stds or sale to the Grid.
  10. 10. Solution: Midwest EM&V Forum• Create a Forum for utilities and regulators to discuss and agree upon the valuation and evaluation of EE• Current Regional Issues Around Evaluation – Different definitions of savings and reporting periods make comparisons across programs or states difficult – Different methods to measure savings making it difficult to address program attribution, define metrics for policy objectives, assess broader market impacts – Different levels of Commission review leads to a large range of uncertainty and lack of confidence in claimed energy savings and use of deemed savings – Aggregation of program savings into load forecasting frameworks is limited by the uncertainty – Efficiency and demand savings cannot be utilized in regional markets without some consistency in approach• Evaluation, Measurement and Verification is already a part of all regulated EE programs, so bring together and streamline
  11. 11. Why Midwest EM&V Forum?• Reason for a Midwest EM&V Forum at this time – Efficiency programs, spending and savings goals have been growing significantly in the region – Credibility of savings estimates can be enhanced if there is some agreement on a regional evaluation, monitoring and verification model – Needed for instituting a forward capacity market – Efficiency savings and demand response in regional markets can be monetized if there is standardization and consistency – Mass market research for program development and incremental costs can be leveraged with regional information – Money can be saved on estimating savings, and developing load shape studies – EE program designs across the region can be improved – Leverage knowledge and lessons of regulators and staff across the region
  12. 12. Next Steps for Midwest EM&V Forum• Needed Actions for advancing the Forum – Secure support for the concept – Some future commitment of staff time to participate – Prepare Midwest as roll out area for U.S. DOE EM&V actions – Utilize some EM&V funding for regional support• MEEA is coordinating with US DOE and regional stakeholders – MEEA has the regional footprint, credibility and staff resources to implement this project – Bring US DOE messaging and goals to be consistent with Midwest activities
  13. 13. Why Advance the Forum Now?• Impact of November 2010 Elections – Need to Educate on EE – What is EE & What are the current statutes and regulations • 9 new Governors (8 Republican/1 Democrat) • State Senates (11 Republican Majorities) • State Houses (10 Republican Majorities) • 519 New Legislators out of 1595 – New PSC Chairs and change to Commissioners and staff • Delays with program review and approval • Need to educate on value of energy efficiency • Need consistency of EM&V• EEPS requirements continue to increase• Difficult Economic Climate – state budgets tight
  14. 14. Energy Efficiency is a Bipartisan Issue State House/Senate and Governor party affiliation at the time of the first enactment of statewide energy efficiency policy VT: D D MA: D D D R D RI: R D CT: R R D R DE: D D D R D R D MD: D State Legislature D H/S: Republican R D D H/S: Democrat H/S: Split R EERS Pending D/R Governor’s Party R HI: RJanuary 2011
  15. 15. Contact Info Kevin CullatherSenior Policy Manager Midwest Energy Efficiency Alliance 20 North Wacker Drive, Suite 1301 Chicago, IL 60606 312-784-7265 kcullather@mwalliance.org www.mwalliance.org

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