Page 81 - North American Clean Energy January February 2018 Issue

said “the state’s highest priority is energy e ciency. To promote a clean energy economy, we must make it easier for markets to function and for people to make choices that achieve energy savings and drive consumer demand for energy services. In order to get scale, we have to utilize markets well and create the conditions within which they function properly.” Commissioner McAllister also noted that, “the savings go well beyond our state, because of California’s sheer size, we can move markets.”6
California has had the bene t of
learning from some hard-earned, real-
world experience. at’s especially true in measuring e ciency savings via customer data. California has spent billions of dollars on smart meters that are widely considered
to have provided less value than anticipated. In 2015, California lawmakers directed the utilities to begin measuring energy e ciency savings using the vast, detailed data generated by the smart meter technology.
is approach to measuring energy
savings is called “normalized metered energy consumption” (NMEC). It is designed to determine the impact, and therefore value,
of e ciency programs by using data from
the customer’s meter, instead of traditional engineering calculations. At the highest
level, NMEC attempts to quantify how much electricity a customer used before e ciency measures were installed, as compared to how much after (adjusted, or “normalized,” for weather extremes and other anomalous events that may drive big swings in energy use).
NMEC appears straightforward, but its implementation is fraught with questions
and concerns. What is the right process for normalization? What happens when the e ciency savings are lost in the noise of
the customer’s typical energy consumption patterns? Who has access to, and who is responsible for, the security of a customer’s energy use data? State regulators, utilities, and the e ciency industry are still working
to develop the rules for using NMEC to calculate energy savings from California’s next generation of programs.
California’s investor-owned utilities are
also making changes in how they procure e ciency. Earlier in 2017, they submitted ve- year business plans detailing the strategy they will pursue for procuring energy e ciency, and increasing the portion of their e ciency that is outsourced from 20 percent to 60 percent, over the next three years.
As more delivery of e ciency resources gets outsourced, and NMEC is increasingly applied to measure savings in new programs, e ciency programs may begin to resemble wholesale resource purchases, like solar PPAs. Measuring savings at the meter, and relying on the market for delivery of this resource, will ultimately support broader opportunities for utilities to purchase e ciency in the future from third-party vendors.
Looking to our energy future
California and New York are still working out how to improve energy e ciency. Other states will bene t from customizing a California or New York model to their local energy situation and policy preferences. ere are already important lessons to be learned from New York and California; questions for utility managers and other stakeholders to consider, as they seek to make their own business model transitions a success, and protect their reasonable interests. Utilities, technology vendors, service providers, and their nancial investors all face both threats and opportunities.
“You have to make sure the utilities don’t lose money by supporting energy e ciency,’’ said Energy Law and Economics’ Isser. “Make sure they don’t have to wait years for a next rate case to recover their investment. A utility should
be rewarded for performance somewhat like a private sector market rewards a business. If they do a better job, they are rewarded and if they do a worse job, they lose money.”7
is will be an ongoing revolution for the utility business model across all 50 states. What California and New York are proving is that when it comes to a clean energy future, and promoting the cleanest energy of all – e ciency - they are leading the way with bold policies, and the regulations, strategies, and funding to make them come to life.
Carmen Henrikson is TRC Associate Vice President of Energy Services. She has has more than 17 years of experience in the advancement of clean and distributed energy resources with a focus on delivery and integration of energy e ciency, demand response and renewable technologies. At TRC, she provides strategic and policy direction for the design and management of utility-scale energy e ciency incentive programs. Ms. Henrikson serves as an Executive Committee member and Treasurer on the California Energy E ciency Industry Council’s Board of Directors. Ms. Henrikson holds an M.B.A. from the University of Michigan’s Erb Institute of Global Sustainable Enterprise.
Bob Callender is a Vice President at TRC. Nationally recognized as a progressive leader in energy, Bob has over 20 years of experience as an innovator in energy policy and its implementation in the market. Prior to joining TRC, he was the Vice President of Programs for the New York State Energy Research and Development Authority (NYSERDA), where he oversaw NYSERDA’s suite of energy e ciency programs. He was instrumental in introducing the whole building approach to New York’s e ciency programs as well as developing innovative program nancing mechanisms. Bob held several positions during his 24 year career at NYSERDA, including acting president and CEO. Mr. Callender is also a participating member of the New York REV Clean Energy Working groups and
is a participating member of the NYS Public Service Commission’s Clean Energy Advisory Council’s Energy E ciency Procurement and Markets Working Group. He has a bachelor’s degree in government and management from American University in Washington, D.C., and a master’s degree in public administration from the State University of New York at Albany.
|TRC | www.trcsolutions.com
1 http://www.utilitydive.com/news/how-rate-reform-can-help- turn-energy-e ciency-into-a-pro t-center-for/417549/
2 https://www.nyserda.ny.gov/About/Newsroom/2016- Announcements/2016-01-21-Governor-Cumo-Luanches-5Billion- Clean-Energy-Fund
3 http://www.utilitydive.com/news/pushed-by-rev-coned-tests-new- utility-business-models-in-new-york/435489/
4 http://www.latimes.com/politics/la-pol-sac-jerry-brown-climate- change-renewable-energy-20151007-story.html
5 http://www.buildings.com/news/industry-news/articleid/19432/ title/california-law-to-double-the-e ciency-of-existing-buildings
6 http://www.utilitydive.com/news/building-codes-utility- mandates-propel-california-massachusetts-to-top-ef/428051/
7 http://www.utilitydive.com/news/how-rate-reform-can-help-
turn-energy-e ciency-into-a-pro t-center-for/417549/
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