401- valuing energy efficiency and demand response … · 401- valuing energy efficiency and demand...

401- Valuing Energy Efficiencyand Demand Response Programs

Kenneth Skinner, PhD

Utility Workshops

Utility Workshops

101 - Fundamentals of Energy Statistical Analysis 2

What Is Demand-Side Management?

DSM encompasses a variety of utilityactivities designed to change the level ortiming of customers’ electricity demand

U.S. utility DSM programs can be dividedinto seven categories. The first five typesof programs are intended to promoteenergy efficiency

The last two types are intended topromote specific load-shape objectives,such as peak-load reduction, load shifting,or off-peak load building. These arereferred to as demand response

401 – Valuing Energy Efficiency and Demand Response Programs

Utility Workshops


What Is Demand-Side Management?


Utility Workshops


DSM Program Categories

(1) General information to increasecustomer awareness of energy useand of opportunities to save energy

•Almost all utilities provide generalenergy conservation and DSM programinformation to customers

•Direct and indirect distributionchannels.


Utility Workshops



(2) Technical information, includingenergy audits, which identifyspecific recommendations forimprovements in energy use

•Site-specific information

•Have typically been provided free ofcharge in response to customerrequests


Utility Workshops



(3) Financial assistance in the formof loans or direct payments tolower the first cost of energy-efficient technologies

•Cash payments or rebates

•Fixed payments per unit installed

•Can be designed to lower the initialcost of a technology


Utility Workshops



(4) Direct or free installation ofenergy-efficient technologies

•Utility staff or contractors to providefree audit, purchase, and installationof energy-efficiency technologies at acustomer’s premises


Utility Workshops



(5) Performance contracting, inwhich a third party contracts withboth the utility and a customerand guarantees energyperformance

•Guaranteed level of energy savingsto a utility for an agreed price

•Competitive solicitation (demandbidding) or standard offer

•Requires performance verification


Utility Workshops



(6) Load control and load shifting

•Utility offers financial payments orbill reductions to participants

•Utility controls a customer’s use ofcertain energy-using devices (suchas electric water heaters and airconditioners)

•Adoption of technologies that alterthe timing of demands on the electricsystem (such as thermal storage)


Utility Workshops



(7) Innovative tariffs, such as time-of-day and real-time prices, pricesignals that can enhance theeffectiveness of other DSMprograms

•In return for a lower rate, customersagree to curtail loads when requestedby the utility

•The customer rather than the utilitydetermines which loads to shed


Utility Workshops


The History of DSM

State regulatory policy is an integralpart of the history of DSM

State public utility commissions (PUC’s)grant utilities monopoly rights in returnfor assuming the obligation to serve allcustomers

Rates are regulated

Rates established in an open forum calla Rate Case

In the early years “rate of returnregulation” helped utilities securecapital to build out the system


Utility Workshops


The History of DSM

By the mid 1970”s a dramatic rise inworld oil prices resulted in priceincreases by utilities that relied on oiland gas

Federal government regulation limitingair emissions from electricitygeneration increased the cost of newpower plants

The Three Mile Island accident led tohigher construction costs


Utility Workshops


The History of DSM

Regulatory rate pressure lead manyutilities in the 1070’s and 1980’s toexperiment with DSM programs toreduce operating and costs

High interest rates created capitalconstraints for utilities trying to financeinvestments in new power plants

In response, utilities initiated a varietyof load-control programs to saveenergy during times of peak energydemand


Utility Workshops


The History of DSM

In the late 1970’s and early 1980’sregulatory commissions begin semi-public planning processes for newpower plants

These early planning activities arerecognized as the first efforts at least-cost utility planning

The term least-cost planning describesthe idea that alternatives to new powerplant construction could meetcustomers’ energy service needs atlower cost


Utility Workshops


The History of DSM

In the traditional process, a utilityplanned for and acquired new resourceswithout involvement of regulators andjustified its projects after they werebuilt

The traditional process was based onthe assumption that economies of scalein generation technology wouldcontinue to increase


Utility Workshops


The History of DSM

Underlying the basic conceptual shifttoward least-cost planning was growingevidence that low cost of demand-sidetechnologies could save substantialamounts of energy, for much less thanthe cost of building new plants plannedby utilities

Least-cost planning advocates arguedthat utilities should pursue demand-side options whenever these optionswere less expensive than supply-sidealternatives


Utility Workshops


The History of DSM

As the funding increased, it becameapparent that DSM programs needed tobe incorporated into the rate-settingprocess

Utilities have an incentive to sell moreelectricity and a disincentive to sell lesswhenever the marginal revenue from asale exceeds the marginal cost ofproduction

Incentive to sell more electricity than theamount assumed in the rate-settingprocess


Utility Workshops


The History of DSM

Two regulatory strategies weredeveloped to overcome this incentive tosell electricity between rate cases.

The first compensates utilities for themargin foregone from sales “lost” as aresult of cost-effective DSM programs

The second “decouples” revenue fromsales by establishing a revenue targetthat is independent of sales andcreating a balancing account for thedifference between revenues actuallycollected and the revenue target


Utility Workshops


The History of DSM

As utility spending on DSM increased inthe early 1990s, critics began toexpress their concerns that DSMprograms were not cost effective

Tools were developed to measure “costeffectiveness

Cost effectiveness tests assure thebenefits of DSM programs exceed thecost of the programs

The Standard Practice Manual Testsmeasured cost effectiveness from theperspective of different parties


Utility Workshops


The History of DSM

During the period of deregulation andretail competition in the late 1990’s andearly 2000 the industry focused ofcutting costs wherever possiblebecause the profitability of theirproduct was determined by marketconditions rather than embedded costs

As a result many utilities struggled todefine a business case for DSM


Utility Workshops


The History of DSM

Today, DSM programs have evolved intwo directions

In the first, DSM is pursued as aderegulated business strategy byenergy service companies

In the second, DSM continues as anactivity pursued in the broad publicinterest mandated by regulation


Utility Workshops


Conservation


Utility Workshops


What is Conservation?

Energy conservation is the practiceof decreasing the quantity ofenergy used.

It may be achieved throughefficient energy use, in which caseenergy use is decreased whileachieving a similar outcome, or byreduced consumption of energyservices.


Utility Workshops


The Benefits of Conservation

Energy conservation is an importantelement of energy policy. Energyconservation reduces the energyconsumption and energy demandper capita, and thus offsets thegrowth in energy supply needed tokeep up with population growth.

By reducing emissions, energyconservation is an important part oflessening climate change.


Utility Workshops


How Conservation is Valued

The value of conservation is typicallycalculated as the net of the benefits lessthe costs.

Although there remains a debatenationally as to what benefits to include,there are certain categories that aregenerally included in all models.

The financial benefits are called AvoidedCost.

Other may include environmentalbenefits. These are referred to associetal benefits.


Utility Workshops



Program benefits (Avoided Costs) can referto avoided energy production or avoidedinvestment in energy infrastructureincluding generators, transmissionsystems, or distribution capacity.

The program costs will include all of thedirect implementation expenses. Thesemay vary depending on who's perspectiveis being considered.

We examine the Standard Practice ManualTests in detail later in the course.


Utility Workshops



The value of the program depends furtheron the reliability of the technology and thebehavior of the energy consumer.

Typically, program planners will need toestimate how many participants wouldhave installed the conservation technologyeven without the involvement of the utility.

These are referred to as free-riders andshould be netted out of the benefits.

Some argue that there may be additionalconservation as a result of the program.These are referred to as free-drivers.


Utility Workshops


Distribution of Energy Consumption

Distribution ofenergyconsumption inthe UnitedStates, 2004.Data wascompiled for allfuel sources,converted toBTU's, andassigned to 1 of4 sectors.


Utility Workshops


Energy Conservation - Residential

The residential sector refers to allprivate residences, including single-family homes, apartments,manufactured homes and dormitories.

Energy use in this sector variessignificantly across the country, due toregional climate differences anddifferent regulation. On average, abouthalf of the energy used in U.S. homesis expended on space conditioning (i.e.heating and cooling).


Utility Workshops



Home energy consumption averages:

Space conditioning, 44%

Water heating, 13%

Lighting, 12%

Refrigeration, 8%

Home electronics, 6%

Laundry appliances, 5%

Kitchen appliances, 4%

Other uses, 8%


Utility Workshops



Despite technological improvements,many American lifestyle changes haveput higher demands on heating andcooling resources.

The average size of homes built in theUnited States has increased significantly,from 1,500 sq ft (140 m²) in 1970 to2,300 sq ft (210 m²) in 2005.

The single-person household has becomemore common, as has central airconditioning: 23% of households hadcentral air conditioning in 1978, thatfigure rose to 55% by 2001.


Utility Workshops



As furnace efficiency gets higher, there islimited room for improvement--efficiencies above 85% are now common.

However, improving the buildingenvelope through better or moreinsulation, advanced windows, etc., canallow larger improvements.

The passive house approach producessuperinsulated buildings that approachzero net energy consumption. Improvingthe building envelope can also becheaper than replacing a furnace or airconditioner.


Utility Workshops



Even lower cost improvements includeweatherization, which is frequentlysubsidized by utilities or state/federaltax credits, as are programmablethermostats.

Consumers have also been urged toadopt a wider indoor temperaturerange (e.g. 65 °F (18 °C) in the winter,80 °F (27 °C) in the summer).


Utility Workshops



One underutilized, but potentially verypowerful means to reduce householdenergy consumption is to provide real-time feedback to homeowners so theycan effectively alter their energy usingbehavior.

Recently, low cost energy feedbackdisplays have become available. Astudies have shown that these displaysresult in an average 6.5% drop in totalelectricity use.


Utility Workshops



In most residences no single appliancedominates, and any conservationefforts must be directed to numerousareas in order to achieve substantialenergy savings.

However, Ground and Water SourceHeat Pump systems are the moreenergy efficient, environmentally clean,and cost-effective space conditioningsystems available and can achievereductions in energy consumptions ofup to 69%.


Utility Workshops


Energy Conservation - Commercial

The commercial sector consists of retailstores, offices (business andgovernment), restaurants, schools andother workplaces.

Energy in this sector has the samebasic end uses as the residential sector,in slightly different proportions.


Utility Workshops



Space conditioning is again the singlebiggest consumption area, but itrepresents only about 30% of the energyuse of commercial buildings.

Lighting, at 25%, plays a much largerrole than it does in the residential sector.

Lighting is also generally the mostwasteful component of commercial use.

A number of case studies indicate thatmore efficient lighting can reducelighting energy by almost fifty percent.


Utility Workshops



Commercial buildings can greatlyincrease energy efficiency by thoughtfulsystematic (not expensive) energyefficient design.

Commercial buildings often haveprofessional management, allowingcentralized control and coordination ofenergy conservation efforts.

As a result, fluorescent lighting (aboutfour times as efficient as incandescent)is the standard for most commercialspace.


Utility Workshops



As most buildings have consistent hoursof operation, programmed thermostatsand lighting controls are common.

However, merely having a computercontrolled building automation systemdoes not guarantees energy efficiency.The systems have to operate correctly torealize the gains.

Many corporations and governments alsorequire the Energy Star rating for anynew equipment purchased for theirbuildings.


Utility Workshops



Controllers that automatically vary thespeeds of fans, pumps, andcompressors have radically improvedpart-load performance of those devices.

For space or water heating, electricheat pumps consume roughly half theenergy required by electric resistanceheaters.


Utility Workshops



Natural gas heating efficiencies haveimproved through use of condensingfurnaces and boilers, in which the watervapor in the flue gas is cooled to liquidform before it is discharged, allowingthe heat of condensation to be used.

In buildings where high levels ofoutside air are required, heatexchangers can capture heat from theexhaust air to preheat incoming supplyair.


Utility Workshops


Energy Conservation - Industrial

The industrial sector represents allproduction and processing of goods,including manufacturing, construction,farming, water management andmining.

Increasing costs have forced energy-intensive industries to make substantialefficiency improvements in the past 30years.


Utility Workshops



For example, the energy used toproduce steel and paper products hasbeen cut 40% in that time frame, whilepetroleum/aluminum refining andcement production have reduced theirusage by about 25%.

These reductions are largely the resultof recycling waste material and the useof cogeneration equipment forelectricity and heating.


Utility Workshops



The energy required for delivery andtreatment of fresh water oftenconstitutes a significant percentage of aregion's electricity and natural gasusage (an estimated 20% ofCalifornia's total energy use is water-related)

In light of this, some local governmentshave worked toward a more integratedapproach to energy and waterconservation efforts.


Utility Workshops



Unlike the other sectors, total energyuse in the industrial sector has declinedin the last decade.

While this is partly due to conservationefforts, it's also a reflection of thegrowing trend for U.S. companies tomove manufacturing operationsoffshore.


Utility Workshops


Demand Response


Utility Workshops


What is Demand Response (DR)?

Demand response can be defined as:

Reductions in electric usage by end-use customers from their normalconsumption patterns at times of highwholesale market prices or whensystem reliability is jeopardized inresponse to changes in the price paidfor electricity or to incentives designedspecifically to induce the reduction.


Utility Workshops


What is Demand Response?

There are two components to thisdefinition. The first half of the definitiondescribes the function of DR from theperspective of the electric system. Theemphasis is on reductions in usage atcritical times.

Critical times are typically only a fewhours per year, when wholesale electricitymarket prices are at their highest orwhen reserve margins are low due tounforeseen contingencies such asgenerator outages, downed transmissionlines, or very severe weather conditions.


Utility Workshops


What is Demand Response?

The second half of the definitiondescribes the incentive given to thecustomers: either through a retailelectricity rate that reflects the time-varying nature of electricity costs, or aprogram that provides payment toreduce load at critical times.

The incentive is unrelated to the normalprice paid for electricity and may involvepayments for load reductions, penaltiesfor not reducing load, or both.


Utility Workshops


Seven Purposes of DR

There are at least seven basic purposesof DR:

1. The most basic is to reduce electricdemand

2. Some DR resources can be used asoperating reserves (similar to spinningand non-spinning reserves)

3. DR can be used to defer investment ingeneration, transmission anddistribution systems


Utility Workshops


Seven Purposes of DR

4. DR is used to mitigate transmissioncongestion and provide distributionload management

5. DR is used in emergency situations orsystem reliability when reserves dropbelow safe levels

6. DR reduces energy prices andmitigates market power

7. DR can be used to reduce harmfulemissions benefiting the environment


Utility Workshops


Why is DR Important?

In recent years, there has been growingconsensus among federal and statepolicymakers that insufficient levels ofdemand response exist in the U.S.electric power system.

Demand response provides short-termreliability benefits as it provides anefficient way to provide load relief toresolve system and/or local capacityconstraints.


Utility Workshops



During a system emergency it may benecessary for a utility to curtail enduser loads.

Selectively curtailing service tocustomers who voluntarily elect toparticipate in an emergency DRprogram is cheaper and more efficientthan random curtailing loads viarotating outages.

It is also possible that time-varyingrates (e.g., RTP, CCP) can provide loadrelief that can help resolve systemcapacity constraints as customersrespond to high on-peak prices.


Utility Workshops



The value and effectiveness of DRresources largely depends on thepurpose to which it is applied whichmay include:

The needs of the electrical system The willingness of the customer to

participate The communications and equipment

used to achieve the reductions


Utility Workshops


Three Important Attributes of DR

The purpose of DR suggest that thereare at least three importantattributes. These are:

1. The duration of the resource2. The certainty of response3. The speed of response


Utility Workshops


Value Continuum of DR

DR Programs can be viewed asfalling along a continuum of value:

Scheduled or Bid-based

Price Responsive

Voluntary or Emergency Only

Least Valuable

Most Valuable


Utility Workshops


Categories of DR Program Options

There are two basic categories ofdemand response options: RetailPricing Tariffs and DemandResponse Programs.

The specific program options fordemand response are defined anddescribed below.


Utility Workshops


DR Retail Pricing Tariffs

Time-varying retail tariffs include time-of-use (TOU) pricing, real-time pricing(RTP) and critical-peak pricing (CPP).

Time-of-use (TOU): a rate with differentper-unit prices for usage during differentblocks of time that reflect the averagecost of generating and delivering powerduring those time periods.

TOU rates sometimes vary only by timeof day (e.g., peak vs. off-peak period),and by season and are typically pre-determined for a period of severalmonths or years.


Utility Workshops



Time-of-use rates are in widespread usefor large commercial and industrial (C/I)customers in the U.S. and requiremeters that register usage during thedifferent time blocks.

Real-time pricing (RTP): a rate in whichthe price for electricity typicallyfluctuates hourly reflecting underlyingchanges in the wholesale price ofelectricity. RTP prices may be known tocustomers on a day-ahead or hour-ahead basis, or may not be known untilafter the fact.


Utility Workshops



Critical Peak Pricing (CPP): CPP ratesinclude a pre-specified high per-unit ratefor usage during a critical peak period.

CPP events may be triggered by systemcontingencies or high prices faced by theutility.

CPP rates can be super-imposed oneither a TOU or time-invariant rate andare called on relatively short notice for alimited number of days per year.

CPP rates are less common and havebeen tested in pilots for large and smallcustomers in Florida, California, andNorth and South Carolina.


Utility Workshops


Demand Response Programs

Demand response programs areattempts by policymakers, gridoperators, load-serving entities(utilities and retail electricitysuppliers) to elicit demand reductionsfrom customers at critical times calledprogram “events”.

Events may be in response to highwholesale electricity market prices orcontingencies that threaten electricsystem reliability.

The types of programs offered includethe following.


Utility Workshops



Direct load control: a program in whichthe utility or system operator remotelyshuts down or cycles a customer’selectrical equipment (e.g. air conditioner,water heater) on short notice to addresssystem or local reliability contingencies.

Participating customers typically receivean upfront payment, usually in the formof an electricity bill credit and typicallyhave the option to override theshutdown, but may be penalized fordoing so.

Primarily offered to residential or smallcommercial customers.


Utility Workshops



Interruptible/curtailable (I/C) service:programs in which customers receive anupfront bill credit (or rate discount) foragreeing to reduce load, typically to apre-specified firm service level (FSL),during system contingencies.

Customers that do not reduce loadtypically pay penalties in the form ofvery high electricity prices that comeinto effect during events or may beremoved from the program.

Interruptible programs have traditionallybeen offered to large customers.


Utility Workshops



Demand Bidding/Buyback Programs:programs in which large customers offerload reductions and prices at which theyare willing to be curtailed into day-aheadenergy markets or, in verticallyintegrated markets, in which the utilityposts the price it is willing to pay andcustomers submit the amount ofcurtailable load.

Customers whose bids are acceptedmust then either reduce load ascontracted or pay a penalty (e.g.,shortfall in curtailed load priced at real-time market prices).


Utility Workshops



Emergency DR Programs: programsthat provide incentive payments tocustomers for measured load reductionsduring reliability-triggered events.

Many emergency DR programs do notlevy penalties if enrolled customers donot respond.


Utility Workshops



Capacity Market Programs: theseprograms are typically offered tocustomers that can commit to providingpre-specified load reductions when systemcontingencies arise. Customers typicallyreceive day-of notice of events.

The incentives consist of up-frontreservation payments, usually determinedby capacity market prices, and additionalenergy payments for reductions duringevents (in some programs).

Capacity programs typically includesignificant penalties for customers that donot respond when called.


Utility Workshops


Customer Response to DR

Customers participating in demandresponse options may respond to highprices or program events in threepossible ways:

Foregoing: involves reducing usage attimes of high prices or demand responseprogram events without making it uplater. For example, a residentialcustomer might turn off lights or turn upthe thermostat on an air conditionerduring an event, or a commercial facilitymight turn off office equipment. In bothcases, a temporary loss of amenity orcomfort results.


Utility Workshops



Shifting: involves rescheduling usageaway from times of high prices ordemand response program events toother times.

For example, a residential customermight put off running a dishwasher untillater in the day, or an industrial facilitymight reschedule a batch productionprocess to the evening hours or the nextday.

In either case, the lost amenity orservice is made up at a subsequent time.


Utility Workshops



Onsite generation: some customers mayrespond by turning on an onsite or back-up, emergency generator to supply someor all of their electricity needs.

Although the customer may have little orno interruption to their electrical usage,their net load and requirements on thepower system is reduced.


Utility Workshops



Load response strategies may beenhanced with technologies andtechniques that allow for fully-automated demand response.

Pilot projects have demonstrated thispotential (Piette et al. 2005), althoughfew customers have yet adopted fully-automated demand response.


Utility Workshops


Benefits of Demand Response

EPACT (2005) requires DOE to identifythe benefits of DR. DOE identified thefollowing points as importantconsiderations guiding the discussion ofDR benefits:

Customers adjust their electricity usagefrom typical levels in expectation ofrealizing benefits, which must be tangibleand compensatory.

Customers and/or programadministrators incur costs in achievingDR. Thus, any discussion of benefits mustalso define and recognize costs, andquantitative assessments should identifynet benefits.


Utility Workshops



Policymakers should consider thedistributional impacts – who bears thecosts and who receives the benefits – indesigning and evaluating DR strategies.

The durability of benefits must be takeninto account; short-term impacts shouldbe distinguished from long-term impactsthat provide benefits over a multi-yearperiod.

There are important differences in thetiming and distribution of benefits invertically integrated and restructuredelectricity markets.


Utility Workshops




Utility Workshops


Cost of Demand Response


Utility Workshops


Advanced Energy Infrastructure


Utility Workshops


Advanced Meter Definitions

Standard Meter - An electromechanical or solid state meterthat cumulatively measures, records and stores aggregatedkWh that is periodically retrieved for use in customer billing.

AMR - Automatic Meter Reading - system where aggregatedkWh usage, and in some cases demand, is retrieved viaautomated means such as a drive-by vehicle, or walk-by hand-held system. .

Interval Meter - A meter that measures and records kWhusage on either predetermined or remotely configurable timeintervals, where the intervals are in increments such as minutesor hours.

Advanced Meter - An electric meter, new or appropriatelyretrofitted, which is 1) capable of measuring and recordingusage data in time differentiated registers, including hourly orsuch interval as is specified by regulatory authorities, 2) allowselectric consumers, suppliers and service providers toparticipate in all types of price-based demand responseprograms, and 3) which provides other data and functionalitythat address power quality and other electricity service issues.

Source: Demand Response and Advanced Metering Coalition (DRAM)


Utility Workshops


Advanced Meter Definitions

Smart Meter - A different term used to refer to an advancedmeter.

Advanced Metering Device - A separate electronic devicecoupled to a standard meter that enables it to function as andmeet the definition of an advanced meter.

Advanced Metering or Advanced Metering System - Asystem that collects time-differentiated energy usage fromadvanced meters via a fixed network system, preferably two-way, on either an on-request or defined schedule basis. Thesystem is capable of providing usage information to electricitycustomers, utilities and other parties on at least a daily basisand enables them to participate in and/or provide demandresponse products, services and programs. The system alsosupports additional features and functionality related to systemoperation and customer service, e.g. outage management,connect/disconnect, etc.

Advanced Metering Infrastructure - The communicationshardware and software and associated system and datamanagement software that creates a network betweenadvanced meters and utility business systems which allowscollection and distribution of information to customers and otherparties such as competitive retail suppliers, in addition to theutility itself.


Utility Workshops


The Smart Grid

Rapid advances in communications andinformation technology now provideelectric utilities with opportunities toinvest in critical grid infrastructure.

The Smart Grid is the application ofcommunications and InformationTechnology to the electric powertransmission and distribution networksthemselves.

Utility Workshops


The Smart Grid

Smart grid is more than smart meters,which entails replacing analogmechanical meters with digital meters.

Smart meters are transformed whenconnected to a real-time, broadbandand Internet-enabled Smart Grid thatextends from the generation plants toeach electrical outlet (smart sockets) ordevice attached to the grid.


Utility Workshops


Advanced Meter Market Adoption


Utility Workshops


Advanced Meter Market Adoption

EnablesEnergySmartCustomers

ManageDistributedResources

OperationalEfficiency


Utility Workshops


ISO’s and DSM


Utility Workshops


Existing RTOs and ISOs


Utility Workshops


ISO and RTO Responsibilities

The reliability responsibilities of ISO are tomaintain system frequency and voltage.Doing so has two main components:

1) Regulating Reserves - Instantaneous balancing of loadand supply minute by minute

2) Contingency Reserves - Identification of dispatchablereserves that will allow quick rebalancing of thesystem in the event of generation or transmissionoutages

Normal operation of the control area is typicallyhandled by deploying regulating reserves. Systemrestoration responsibilities are typically handled bythree contingency-reserve services (spinning,supplemental and replacement reserves).


Utility Workshops


ISO and RTO Responsibilities


Utility Workshops


ISO’s and DR – California

California ISO Market Redesign (MRTU) The California Market Redesign and Technology

Upgrade (MRTU) initiative has established a clearmandate for the California ISO and providedopportunities for DR involvement from an economicand reliability perspective.

With the development of an effective Day Ahead, HourAhead and Real Time market price, the ISO expectsthe prices to encourage the development of privatesector economic DR.

The new market redesign will encourage bothEconomic Dispatch of DR through the Non-SpinningReserve Ancillary markets and Emergency Reductionthrough the Voluntary Curtailment program.


Utility Workshops



Economic Dispatch Participating loads under MRTU are treated as non-

spinning ancillary services. DR receive a capacitypayment and an energy payment when dispatched. Ifa Participating Load is scheduled, its energyconsumption will be charged the Day-Ahead locationalmarginal price and will earn the Real-Time nodal pricefor that portion of load reduction that is dispatched inReal-Time.

Participating Loads will have relaxed telemetryrequirements for Non-Spinning Reserve (one-minuteupdates from the Participating Load to the SchedulingCoordinator’s server as opposed to four-secondupdates from generators).

Only interval metering and ability to receive and followdispatch instructions are necessary to supplysupplemental energy.


Utility Workshops



Emergency Reduction Although system reliability is a core responsibility of

an ISO, currently the CAISO is not contemplating anemergency reduction or curtailment DRR programs soas to not interfere with IOU and CPUC led reliabilityprograms.

However the ISO is offering a voluntary notificationprogram – the Voluntary Load Curtailment Program.The CAISO Voluntary Load Curtailment Programprovides notification in critical conditions.

There are no monetary incentives. The participantsreceive recognition of participation.


Utility Workshops


ISO Control Standards - WECC

The WECC Minimum Operating ReliabilityCriteria (MORC) - sets forth the governingpolicies required of the Control Area Operatorin assuring reliable system operation. Thepolicies address normal system operation andcontingency reserves.

Section 1.A addresses operating reservesincluding the use of load as in interruptibleresource. However, the standard is written toimplicitly favor generation resources.


Utility Workshops



In describing operating reserves the criteriadistinguishes between regulating andcontingency reserve. Regulating reserve isdefined as automatic generation control (AGC)spinning resources able to meet the NERCControl Performance Criteria.

Contingency reserves are described as spinningand non-spinning resources able to meet theNERC Disturbance Control Standard.


Utility Workshops



WECC MORC section A.2 defines non-spinningreserve. It is within this section that loadresources are explicitly referenced as acceptablefor meeting the NERC Disturbance ControlStandard as Contingency Reserves.

Specifically the standard describes a loadresource as that “which can be interruptedwithin 10 minutes of notification”.

By explicitly identifying load resources as non-spinning reserve in reference to contingencyreserves, WECC MORC precludes the use of DRin the normal minute by minute balancing ofload and supply.


Utility Workshops


ISO Control Standards - NERC

NERC Policy The North American Electric Reliability

Council’s Policy 1 on “Generation Controland Performance” specifies two standardsthat control areas must meet to maintainreliability in real time.

The Control Performance Standard (CPS)covers normal operations and theDisturbance Control Standard (DCS) dealswith recovery from major generator ortransmission outages.

As with the WECC MORC standard, theNERC policy is written to specifically addressthe role of generation resources in supplyingreliability service.


Utility Workshops



Although NERC has proposed changing thedefinitions to include the use of loadresources in supply higher level ancillaryservices, the NERC Operating Manual stilldefines spinning reserve as “unloadedgeneration that is synchronized and ready toserve additional demand.”

Non-spinning reserves are defined as1) That generation reserve not connected to the

system but capable of serving demand within aspecified time, or

2) Interruptible load that can be removed from thesystem within a specified time.


Utility Workshops



So at this time it appears that NERC favorsclassifying DR as non-spinning reserve.

NERC is currently evaluating the influenceof DR and EE on reliability.

Recently completed study to classifyprograms according to their impact onreliability and measure trends in programimplementation.


Utility Workshops


NERC DSM Task Force


Utility Workshops


ISO Control Standards

By relegating demand resources to non-spinning reserve, the standard fails torecognize the unique characterizes of variousDR load classes. While some load resourcesmay be best suited for non-spinning reservemarkets, other load resources are bettersuited to more instantaneous response.

Second, the non-spinning reserve marketprices are typically less than those of spinningor regulation market prices. By relegating loadresources to non-spinning markets, resourcesthat are able to supply more valuable ancillaryservices are not properly compensated.


Utility Workshops


Cost-Effectiveness

Quantifying the benefits and costsof conservation and demandresponse programs


Utility Workshops


Cost-Effectiveness

The Standard Practice Manual Tests

CALIFORNIA STANDARD PRACTICEMANUAL: ECONOMIC ANALYSIS OFDEMAND-SIDE PROGRAMS ANDPROJECTS, July 2002.


Utility Workshops


Cost Benefit Tests

Utility TRC RIM Societal ParticipantAvoided Costs of Capacity,Energy, Gas, T&D, Ancillary Yes Yes Yes Yes No

Utility Direct Costs Yes Yes Yes Yes NoRebates, Incentives Yes No Yes No YesIncremental Customer Costs No Yes No Yes YesBill Savings, Lost Revenue No No Yes No Yes

Extra Environmental Costs No No No Yes No


Utility Workshops


Cost Benefit Tests

Participant RIM Utility TRC/Societal

Incentives

Avoided Cost

Lost Revenue

(Clean Environment)

Reduced Energy Bill

Utility CostsParticipant Cost

Avoided Cost

Incentives

Utility Costs

Participant Cost

Avoided Cost

Utility Costs

Incentives


Utility Workshops


Cost Benefit Tests – Utility Test

The Utility Test (or Program Administrator Test)measures the net costs of a demand-sidemanagement program as a resource optionbased on the costs incurred by the programadministrator (including incentive costs) andexcluding any net costs incurred by theparticipant.


Utility Workshops



The benefits for the Utility Test are the avoidedsupply costs of energy and demand, thereduction in transmission, distribution,generation, ancillary services and capacityvalued at marginal costs for the periods whenthere is a load reduction.

The avoided supply costs should be calculatedusing net program savings, savings net ofchanges in energy use that would havehappened in the absence of the program, orfree ridership.


Utility Workshops



The costs for the Utility Test are the programcosts incurred by the administrator, theincentives paid to the customers, and theincreased supply costs for the periods inwhich load is increased.

Administrator program costs include initialand annual costs, such as the cost of utilityequipment, operation and maintenance,installation, program administration, andcustomer dropout and removal of equipment(less salvage value).


Utility Workshops



In this test, revenue changes are not relevant.Though a shift in revenue affects rates, a testresult above 1.0 informs us that the DSMprogram will yield long run rates that will notrise as quickly as if we had opted for thesupply side alternative.

Where supply is low, or demand is risingquickly, and supply is required, rates are likelyto rise. The Utility Test results in a measureof which option, DSM or supply, is likely to bethe least cost option.


Utility Workshops


Cost Benefit Tests – TRC Test

The Total Resource Cost Test measures the netcosts of a DSM program from the combinedpoint of view of both the participants' and thenon-participants’.

In a sense, it is the summation of the benefitand cost results from the Participant and theRIM Tests, where the rebates or incentives tothe participants conceptually cancel each otherout, and bill savings and lost revenue cancelout.


Utility Workshops



The costs in this test are the program costs paidby both the utility and the participants. Thisincludes incremental customer costs to pay forhaving more efficient appliances or equipment.

Another way to conceptually think about the TRCtest is as follows. With the Utility Test, any cashflows in or out of the utility building matter.With the TRC test, cash flows going in or out ofthe service territory matter.


Utility Workshops



Rebates stay within the service territory and arenot counted.

Similarly, payments to local equipment installersare not counted if the benefit stays in the localeconomy.


Utility Workshops


Cost Benefit Tests - RIM Test

The Ratepayer Impact Measure (RIM) testmeasures what happens to customer bills orrates due to changes in utility revenues andoperating costs caused by the program.

Where the RIM test result is below 1, ratesare expected to rise over the long run.

Where the RIM result is more than 1, ratesare expected to go down over time. This isthe only test result that assesses impacts onnon-participants.


Utility Workshops



There are several ways to define a RIM test.Traditionally, all lost revenues have beenincluded in a RIM score, for the life of themeasure. However, intervening rate cases willadjust rates to recoup future lost revenue, andas such, there is no lost revenue to the utilityafter such a rate case occurs.

Rates still rise, and non-participants arepotentially harmed, but the utility is madewhole once rates are re-set.


Utility Workshops



Only those years leading up to a rate caseshould be used as costs against the program.

The RIM test can be alternatively calculated netof fuel versus based on the full tariff amounts.

Here, the argument is that coal or otherinventoried fuels are not really lost under DSMconservation measures.

The coal is still there, and can be used to meetload, and so should be netted out of lostrevenues for RIM tests.


Utility Workshops


Cost Benefit Tests – Societal Test

A variant on the TRC test is the SocietalTest.

The Societal Test differs from the TRC test inthat it includes the effects of externalities(e.g.,, environmental, national security).

In taking a larger societal perspective, theSocietal Test utilizes essentially the sameinput variables as the TRC Test, but they aredefined with a broader societal point of view,and several additions are possible.


Utility Workshops


Cost Benefit Tests – Societal Test

Some examples include the following. The benefit of avoided environmental damage

The benefit of increased system reliability

Non-energy benefits might include saved waterin energy-efficient washing machines or selfgeneration units, reduced waste streams froman energy-efficient industrial process, etc.

Non-energy benefits for low income programsmay include avoided arrearages, or participantstandard of living benefits.

Benefits of fuel diversity include considerationsof the risks of supply disruption, the effects ofprice volatility, and the avoided costs of riskexposure and risk management.


Utility Workshops


Cost Benefit Tests -Participant Test

The Participant Test is the measure of thequantifiable benefits and costs to the customerdue to participation in a program.

The benefits of participation in a demand-sideprogram include the reduction in the customer'sutility bill(s), any incentive paid by the utility orother third parties, and any federal, state, orlocal tax credit received.


Utility Workshops



Savings estimates should be based on grosssavings, as opposed to net energy savings.

Gross energy savings are considered to bethe savings in energy and demand seen bythe participant at the meter.


Utility Workshops



The costs to a customer of programparticipation are all out-of-pocket expensesincurred as a result of participating in aprogram, plus any increases in the customer'sutility bill(s).

The out-of-pocket expenses include the cost ofany equipment or materials purchased,including sales tax and installation; anyongoing operation and maintenance costs; anyremoval costs (less salvage value); and thevalue of the customer's time in arranging forthe installation of the measure, if significant.


Utility Workshops


How are Savings Determined?

Cost-effectiveness calculations requireestimates of program savings.

These are typically provided though engineeringstudies, direct metering, simulation, impactevaluations or measures libraries like theCalifornia DEER database or the NYSERDAdeemed savings database.


Utility Workshops


California DEER Database

The Database for Energy EfficientResources (DEER) is a California EnergyCommission and California Public UtilitiesCommission (CPUC) sponsored databasedesigned to provide well-documented estimatesof energy and peak demand savings values,measure costs, and effective useful life (EUL)all with one data source.

The users of the data are intended to beprogram planners, regulatory reviewers andplanners, utility and regulatory forecasters, andconsultants supporting utility and regulatoryresearch and evaluation efforts. DEER has beenhas been designated by the CPUC as its sourcefor deemed and impact costs for programplanning.


Utility Workshops


Deemed Savings Database

The New York State Energy ResearchDevelopment Authority (NYSERDA) asdeveloped a deemed savings database withstipulated savings for evaluation purposes.


Utility Workshops


How are Avoided Costs Measured?

Traditional methods for calculating avoidedcost are derived from integrated resourceplanning models.

Production cost models are used to forecastfuture energy prices and capital costs to meetreliability requirements.

More recently market based methods havebeen suggested.


Utility Workshops


How are Avoided Costs Measured?

The avoided cost benefits of DR programs can besegmented into three categories – the cost-basedvalue of a CT, deployment flexibility benefit, and theinsurance value. The sum of these three benefitsequals the total unconstrained value of a DR program.However, programs are designed to allow the customerto choose when and how the program may be called.These program options improve participation by givingcustomers the flexibility to minimize productivedisruptions caused by curtailed energy.

However, from the perspective of program value,customer options effectively constrain the total benefitpossible to the utility. Total program value, then isreduced as customers choose program optionsreducing the economic offer possible to the customer.


Utility Workshops


Example Program Design –Commercial A/C

Example Program Design –Commercial A/C

This program is promoting high efficiencyrooftop air conditioning for commercialcustomers. The program has the followingcriteria:

Customer Class: Rooftop A/C commercial (newconstruction or retrofit)

Technology: High efficiency 16 ton A/C – EER 10.8 Targeted savings: 4500 kWh/yr annual

consumption and 1.1 kW peak demand savings perparticipant based on engineering estimates orevaluations.

Program duration: The program will be run for 5years, technology life is 15 years

Program variables: level of incentive payments Test result objective: Utility test and TRC test

greater than 1


Utility Workshops


Example Program Design –Lighting

Example Program Design –Lighting

This program is a non-weather sensitive interiorlighting measure – 320W Pulse Start Metal Halidereplacing a 400W HID. The expected savings will varyaround facility occupancy patterns. Weather volatilitymust be removed from the DSMore run. The programwill have the following criteria:

Customer Class: Commercial office building Technology: 320 W Pulse Start Metal Halide replacing

400 W HID

Targeted savings: 470 kWh/yr and 0.113 kW peakdemand savings per participant

Program duration: The program will be run for 4 years.The technology has a 6 year useful life.

Program variables: level of incentive payments

Test result objective: Utility test and TRC test greaterthan


Utility Workshops


Example Program Design – PeakClipping – Demand Response

Example Program Design – PeakClipping – Demand Response

In this program, we are targeting summer peakhour reductions with the following criteria:

Customer Class: Central AC residential Technology: Load control CAC Targeted coincident savings: 1.5 kW per participant,

5,000 participants yr one Program duration: The program will be run for 10 years Program variables: level of incentive payments Test result objective: Utility test and TRC test greater

than 1


Utility Workshops


Integrated Resource Planning

Integrating conservation anddemand response into the long-term resource plan


Utility Workshops


What are the issues?

How are utilities responding to the need to betterintegrate DSM programs into long-term resourceplans?

How do utilities measure the $/kW capacity and$/kWh energy benefits of their DSM resources?

How do utilities determine optimal amounts ofDSM?

Can DSM be as reliable as traditional supply-sideresources? How are utilities quantifying the“forced outage” equivalents for DSM ?


Utility Workshops


Initially, theIntegratedResourcePlannersincluded place-holderresources inthe long-rangeplan

How do utilities integrate DSMinto IRP’s?


Utility Workshops



Typically, cost-benefit tools (like DSMore) areused to screen DSM programs and all thedetails (costs, technology, savings, etc) beforesending to the resource plan, as a bundledportfolio, for final resolution and assessment.

Often the avoided cost is specified by the IRPbefore the program is actually designed, toinitiate the screening process, but regionalmarket prices can also be used to start theprocess, or both can be done.


Utility Workshops



The program planner is then constrained to notspend more than the “static” avoided costs, asthey establish program designs to bescreened.

Often the IRP planners tell DSM planners whichtypes of programs, generally, would help. Allpeakers, all base load, 80/20 mix. Thenprogram planners focus on screening thosetypes with associated hours available.


Utility Workshops



Once all programs are screened, the costeffective ones are all bundled together to runthrough IRP. If your screening tool isaccurate, your bundle will be accepted by theIRP.

Sometimes, they are split apart into 3 bundlesof, say, 100 hours available, 101 to 1500hours available and 1501+ to mimic moreclosely plant types.


Utility Workshops


How do utilities integrateDSM into IRP’s?

From our experience IRP folks never wantmore than 3 bundles. The IRP cannot solvewith too many resource options in the run,hence the need for screening.

We are beginning to see some changes tothis traditional process, where some DSMplanners are using more dynamicallydetermined avoided costs, and paying moreattention to how changing forward marketsand weather create a need for less “static”methods of planning and valuation.


Utility Workshops


Hybrid and Plug-in Vehicles

Quantifying the benefits and risk ofplug-in vehicles (PHEV)


Utility Workshops


PHEV System Loading

Risk analysis measures the 95% downside possibility from PHEV loadinguncertainty.

As load control technology is deployed,favorable outcomes are locked-in andoverall risk is reduced.

VaR VaR

With hybrid load controlthe expected valueincreases and uncertaintydecreases.

With LoadControl

WithoutLoadControl

Net Cost Net System Benefit Net Cost Net Benefit


Utility Workshops


Greenhouse Gas(GHG) Reductions

Quantifying the benefits ofgreenhouse gas emissions


Utility Workshops


Greenhouse Gas (GHG) ReductionsGreenhouse Gas (GHG) Reductions

In response to concerns about global warmingand the environment federal, state and localgovernments have enacted carbon emissionreduction targets and pollution standards.

As governments work to meet these emissionstandards, the need to accurately measure theavoided emission benefits of demand sidemanagement (DSM) programs becomesincreasingly important.


Utility Workshops



California has led the nation in setting GHGtargets. The 2050 Target set by Executive OrderS-3-05 requires a statewide GHG reduction 80%below 1990 levels.


Utility Workshops



There are four methods identified by the WorldResources Institute (WRI) fall 2007 report“Guidelines for quantifying GHG Reductions fromGrid-Connected Electricity Projects.” Theguidelines identify four levels of rigor forcalculating avoided GHG benefits (Guidelinessection 10.4). Method 1 -- Averaging annual emissions for load following

plants

Method 2 -- Weighted average by resource type on the marginat specific time periods

Method 3 -- Historical data to calculate marginal emission ratesby hour

Method 4 -- Dispatch modeling to calculate marginal emissionrates by hour


Utility Workshops



All methods Combine recognized GHG emissiondata with plant specific performance informationto generate avoided CO2 estimates

Estimates of CO2 Emissions from Generation Technologies

Type of Unit Tons CO2/MWh LBS CO2/kWh

(New Units)* (New Units)*

Pulverized Coal 0.92 2.02768

Pulverized Coal w/ Carbon Capture 0.092 0.202768

IGCC 0.81 1.78524

IGCC w/Carbon Capture 0.081 0.178524

Supercritcal Pulverized Coal 0.86 1.89544

Supercritical Pulverized Coal w/Carbon Capture 0.086 0.189544

Supercritical Pulverized Coal w/ Oxyfuel 0.086 0.189544

Natural Gas Combined Cycle 0.34 0.74936

NGCC w/Carbon Capture 0.034 0.074936

Nuclear/Hydro/Non-Fossil 0 0

Unit Fuel LBS CO2/kWh $/Ton CO2 $/MWh CO2Dan-River-CT NG 1.115 24.00$ 12.14$Riverbend-CT NG 1.115 24.00$ 12.14$

BuzRst-GE-CT NG 1.115 24.00$ 12.14$

Custerd-CT-Fut NG 0.74936 24.00$ 8.16$

Buckside-3 COAL 2.02768 24.00$ 22.08$

Buckside-4 COAL 2.02768 24.00$ 22.08$

Cliffs-2 COAL 2.02768 24.00$ 22.08$

Cliffs-3 COAL 2.02768 24.00$ 22.08$Cliffs-4 COAL 2.02768 24.00$ 22.08$


Utility Workshops



Align utility-specific supply-stack with hourly systemdemand profiles to accurately forecast plants on themargin, on which to measure avoided CO2 emissions

Year Month Unit

Monthly

GenerationMWHr

Ave Var

Cost$/MWHr Fuel

LBS

CO2/kWh

$/MWh

CO22007 Sep Morro-1 19405 93 NG 0.82 12.04$2007 Sep Morro-2 25452 85 NG 0.91 12.27$2007 Sep Fort Drum 51068 43 NG 1.96 22.50$2007 Sep Madison-3 52312 43 COAL 2.09 22.34$2007 Sep Madison-4 54275 42 COAL 2.12 22.54$2007 Sep Tiverton-2 66026 42 COAL 2.00 21.58$2007 Sep Riverbend-6 49977 39 COAL 2.23 21.59$2007 Sep Riverbend-7 64695 39 COAL 2.15 21.88$2007 Sep Dan-River-3 63948 39 COAL 1.85 22.54$2007 Sep Buck-5 48871 38 COAL 2.11 21.85$2007 Sep Nuclear-1 218043 0 NON 02007 Sep Hydro-Lake Cty 98017 0 NON 02007 Sep Geysers-Sonoma 121491 0 NON 0

The intersection of monthlycapacity factor and fractionalhourly demand determinesmarginal avoided value


Utility Workshops


Example Programs


Utility Workshops


Example Programs – SDG&E

The California Energy Commission set forthspecific goals and guidelines in the CaliforniaEnergy Efficiency Strategic Plan.

Using the strategic plan as a reference, we canlook at how one utility, SDG&E, plans toimplement these goals in its choice ofprograms for 2009-2011.


Utility Workshops



SDG&E has proposed programs for CoreCustomers, Partnerships, Third Parties, andprograms that support the California StrategicPlan.

Core Customers: Residential Education and Information

Residential Energy Efficiency Program (REEP)

Multifamily Rebate

Residential Upstream Lighting

Nonresidential Standard Energy Efficiency (NRSEE)

Nonresidential Custom Energy Efficiency (NRCEE)

Commercial New Construction

Statewide Education and Training


Utility Workshops



Partnerships: Statewide Partnerships

San Diego County Water Authority Partnership

University of San Diego Partnership

Third Parties SDG&E Third Party Programs

Long Term Support of Strategic Plan Strategic Development and Integration

Codes and Standards

Emerging Technology

Marketing and Education

Government Partnerships

Community Case Studies


Utility Workshops



Residential Strategy 1: Deliver zero netenergy to new homes by 2020 Super CFL Standards – encourage emerging

technology by extending current marketstandards.

Legislation – Call for the reduction of indoorlighting energy use by at least 50% by2018.

Residential Strategy 2: Transform homeimprovement markets to apply whole-house solutions to existing homes Residential Upstream Lighting Program –

Incentives for “Whole House” dimmable CFLand LED lighting.


Utility Workshops



Multifamily Rebate – Participating propertyowners will be required to install acomprehensive set of EE measures (gas andelectricity).

Residential EE Program (REEP)– WholeHouse energy performance including airsealing, insulation and ventilation. Trainingon how to assess home energy use anddesign custom plans that include thefollowing. Financial incentives will beprovided directly to customers based onbundled efficiency packages.


Utility Workshops



• Attic Insulation,

• Central Furnace,

• Dishwasher,

• Shower Start Device,

• Variable Speed PoolPump and Motor,

• Wall Insulation,

• Duct Seal & Test,

• ES Plug Load PowerStrip,

• Faucet Aerators,

• High EfficiencyLighting,

• Low Flow ShowerHeads,

• Room AC/Central Air,

• Hot Water Heater,

• Whole House Fan,

• Appliance Upgrades,

• Solar Improvements.


Utility Workshops



The installation of “Smart Meters” and theability to monitor the whole house will createopportunities to combine measures anddevelop new technologies.

Access to hourly data will help support long-term behavioral changes.

Smart meters combined with passive oractive automated enabling technology willprovide customers with energy managementcapability.

Enabling technology may include:• In-Home Displays

• Programmable Controllable Thermostats

• Load Control Devices

• Etc401 – Valuing Energy Efficiency and Demand Response Programs

Utility Workshops



Implementation of the Residential EnergyEfficiency Program (REEP) includes activitiesto solicit, train, and assist residential repairand remodel contractors to do whole housediagnostics of energy-related deficiencies andpropose repair packages, and complete theimprovements.

New Residential Construction – Holisticapproach to sustainability of the communityas well as specific projects.

The Advanced Home program will offer aperformance-based program through theCalifornia New Home for building that exceedthe 2008 standards by 10% or greater.Incentives will be based on a scale from 10%to 35% reduction in energy usage.


Utility Workshops



Additional incentives are available thoughtthe Advanced Home program beyond kWh,kW and therm reductions that achieve greenbuilding certification, perform buildingcommissioning, and follow measurement andverification after occupancy.

USGBC LEED program, Build it Green’sGreenPoint Rating program, and CaliforniaGreen Builder are a few of the rating systemsconsidered for the incentive.


Utility Workshops



Residential Strategy 3: Revolutionize theenergy efficiency and management byconsumers of “Plug Load” devises SDG&E intends to participate in a statewide

effort targeting retailers to promote plug inload products that use less energy. Theprogram will also educate consumers.

Residential Strategy 4: Mobilize stateand local building officials to achieve andmaintain ultra-high Support “green” or sustainability standards in

energy codes and enforcement through localordnances.


Utility Workshops



Low Income Residential Sector

Commercial Sector

Industrial Sector

Agricultural Sector

Heating Veneration and Air Conditioning

Codes and Standards

Workforce Education and Training

Marketing Education and Outreach

Research and Technology

Local Governments


Utility Workshops



Standard Performance Contracting incentives are paid based on the quantity of

kWh or therms saved resulting in theinstallation new equipment or systems. Mayrequire measured savings, SPC estimationsoftware, or engineering calculations tovalidate savings.

The “Bid Sponsor” option allows the sponsorto submit unique and innovativenonresidential projects.

Recognition program provides non-monetaryrecognition awards

Green Energy Systems Pilot providesfinancing alternatives including zero interestunsecured loans


Utility Workshops



Bid Proposal Option open to all nonresidietial customers and

project sponsors. Customers proposes theincentive. Utility will perform the M&V at nocost, or the project sponsor can perform theM&V themselves.

The incentive options have seen highcustomer participation due to SDG&E’sflexibility in customizing appropriate energyefficiency solutions for the variousparticipants.

Incentives can be in the form of rebates orfinancing options.


401- valuing energy efficiency and demand response … · 401- valuing energy efficiency and demand...

Documents