Energy Efficiency

1
Energy Efficiency

• Successes, Opportunities and Challenges

Marsha Smith Commissioner, Idaho Public Utilities
Commission President, National Association
Regulatory Utility Commissioners EPRI Summer
Seminar August 4, 2008
2
Successes

• Near Universal Utility Acceptance As A Resource
• Many Successful Program Models
• Spanning all customer segments
• Utility operated and non-utility programs
• Improved Building Codes Appliance Standards
• i.e. 2007 Energy Act phase out of incandescent
  bulbs
• Move towards Smart Grids

3
Successes

• Idaho Governor, Public Utilities Commission,
  Energy Division and Department of Environmental
  Quality Fixed-cost adjustment mechanism pilot,
  expanding by 6 times money available for
  low-income weatherization, 2007 Idaho Energy Plan
  requires cost-effective conservation, EE and
  demand response as priority resources in IRP
  filings.
• California MOU (also captures Governor,
  Utilities, State Government) EE
  institutionalized as first priority resource for
  IOUs and POUs CPUC adopted new performance-base
  EE risk/reward mechanism new Big Bold EE
  Strategies extends goals through 2020 continued
  support for best practices database
• NJ Board of Public Utilities With other state
  agencies, set goal to reduce projected energy use
  by 20 by 2020
• NY PSC Energy Efficiency Portfolio Standard
  (EPS) for a 15 reduction in electricity usage
  below the 2015 forecasted level to establish
  goal for gas
• Hawaii PUC EE Order determined cost recovery and
  incentives mechanisms
• Vermont Public Service Board 2008 budget is 76
  higher than previous EE statutory cap EE and DSM
  receiving capacity payments in ISO-NE

4
Successes

• BPA on track to achieve its higher 260 aMW
  5-year target savings
• Duke Energy hosted Energy Efficiency Summits and
  stakeholder collaboratives in its five states
  increased efficiency program offerings
• Entergy new programs in Arkansas co-funding New
  Orleans collaborative
• Exelon expanded program offerings across sectors
• Great River Energy savings goal of 1.5 of
  annual energy sales
• MidAmerican Energy Company 2006 program savings
  of 36 MW and 160,000 MWh of electricity, and
  457,000 Mcf of gas
• PNM Resources EE and DR evaluated and modeled
  consistent and comparable to supply-side
  resources in IRP joined with 7 other utilities
  under Clinton Global Initiative to focus on EE as
  strategy to reduce GHG emissions.
• Seattle City Light Efficiency is "Resource of
  First Choice" in IRP140 average MW of cost
  effective EE over the next 20 years
• Southern Company Recent IPR process resulted in
  6 new Georgia Power efficiency initiatives,
  increasing annual spending by 9.4 million

5
Successes - Idaho

• Idaho Power Irrigation Peak Rewards Program
• Voluntary, 75 horsepower or larger
• Weekdays, 4-8 p.m.
• Incentives
• 4.36 per kW demand for 3 days/week
• 3.36 per kW for 2 days per week
• 2.01 per kW for 1 day/week
• Nearly 20 of qualifying irrigators participate
• Average peak reduction of 28.9 MW
• Maximum peak reduction of 37.4 MW
• Avista Third-Party Contracting
• Avista seeks out third-party contractors to
  augment its programs when specific measures or
  market segments can benefit from their
  specialized expertise.
• HVAC efficiency program,
• commercial refrigeration,
• government buildings and
• multifamily residential customers. 
• This represents approximately 20,000 MWh (10) of
  Avista's annual DSM savings.

6
Opportunities

• Address Capacity as well as Energy
• Demand response efforts
• AC cycling - Idaho Powers Cool Credits Program
• Building Codes and Appliance Standards - continue
  upgrading
• Market Transformation
• Compact Fluorescent Bulbs In PNW
• Pricing Options
• AMI enhances multiple options
• Automation Of End Use Controls
• Occupancy sensors, set back thermostats,
• Smart Homes - Stagger timing of high demand
  applications
• delay water heating if household demand is
  already high
• Federal, State, Municipal and Utility Buildings
  As Demonstrations
• Overall Green movement
• Conservation is boring Green is trendy.

7
Challenges

• Market Transformation
• Make EE standard consumer practice
• Cities with most major buildings lit all night
  long.
• Look at buildings you visit are they using EE??
• Lack of Management Commitment/Priority
• Misperception that energy efficiency is not a
  guaranteed, reliable cost effective resource
• Actions not equal to words - Funding allocations
  may not reflect claimed priorities
• Possible Solutions
• Fixed Cost Recovery
• Third party implementers Energy Trust of Oregon,
  Wisconsin Energy Conservation Corporation
• New Regulatory Approaches???

8
Challenges, continued

• Uncertainty - What is the marginal cost?
• Is nuclear acceptable, financeable, reliable,
  economical?
• Will carbon capture be an option? When?
• Volatility of natural gas prices.
• Conflicting Studies/Reports
• McKinsey Study - How Much At What Cost
  Supports More EE
• CERA Study The Cost of Energy Efficiency
  Investments Questions low EE cost claims
• Improve evaluation/analysis tools
• How much EE really is available at any specific
  price?
• Setting Appropriate Incentive Levels
• Most DSM currently acquired at a utility cost
  that is well below marginal cost. Are higher
  incentives prudent? Are we cream skimming?
• Constrained Delivery Resources
• Staff needs growing while experienced staff is
  retiring