2012 NC Energy Efficiency Summit Presented by James McLawhorn, - - PowerPoint PPT Presentation

2012 NC Energy Efficiency Summit

Presented by

James McLawhorn, Director – Electric Division Jack Floyd, Engineer – Electric Division Public Staff – N.C. Utilities Commission February 22, 2012

DISCLAIMER

• The views and comments are ours alone

and do not represent, nor are they to be interpreted to represent, the views comments, positions, or policies of the North Carolina Utilities Commission or the Public Staff.

History of North Carolina Utilities Commission (NCUC)

• 1891: Founded as Railway Commission
• 1899: Railway Commission became North

Carolina Corporation Commission

• 1913: Electricity, Light, Power, Water, and

Gas became regulated

• 1933: Corporation Commission abolished

and North Carolina Utilities Commission established with three members

• Current Composition of Commission: seven

commissioners; commission staff: chief counsel and legal staff, fiscal management section, accounting staff, support personnel

• Role: hears cases and rulemakings, makes

policy, serves as decision maker

Regulatory Roles of NCUC

• Purpose: protect interests of the public by

ensuring adequate service at reasonable rates.

• “Regulatory Compact”: utilities exchange benefit
• f monopoly franchised service territory for
• bligation to provide adequate service at

reasonable rates.

• Commission’s regulatory obligation: to be fair and

reasonable to public utilities and their customers.

• Commission’s regulatory tools:

– certification of new facilities – rate establishment or review – service quality oversight

History of Public Staff - NCUC

• Came into existence July 1, 1977 – G.S. 62-15

– Independent Agency

• Headed by Executive Director – appointed by

the Governor – six year term

• Statutory duty to represent the using and

consuming public in rate applications, investigations, complaints, certificate applications, transfers, mergers, and review of affiliate contracts

• Divisions: Legal, Electric, Communications,

Natural Gas, Water and Sewer, Transportation, Accounting, Economic Research, and Consumer Services

• Role: serves as consumer advocate in all

Commission proceedings affecting rates or services

Session Law 2007-397

aka “Senate Bill 3”

• Requires utilities to meet a portion of energy

needs through renewables and energy efficiency

• Requires DSM/EE programs to be cost effective
• Provides for the recovery of DSM/EE program

costs, net lost revenues, and an incentive to encourage development of DSM/EE programs

What does cost effective mean?

• DSM/EE programs sponsored by utilities are

cost effective when program costs are less than the costs the utility would otherwise incur to meet demand and energy requirements with conventional generation resources

• No cost recovery unless DSM/EE programs are

shown to be cost effective

• Program options must exceed building code or
• ther minimum efficiency requirements

Cost Effectiveness is Calculated Using Four Standard Tests

Test Key Question Answered Summary Approach Participant Cost Will the participants benefit

• ver the measure life?

Comparison

• f

costs and benefits to customer

• f

installing the measure. Program Administrator

• r Utility Cost

Will utility bills increase? Comparison

• f

costs to program administrator with costs

• f

supply-side generation options Ratepayer Impact Measure Will utility rates increase? Comparison of administrator costs and utility bill reductions to supply-side resource costs Total Resource Cost Will the total costs of energy in the utility service territory decrease? Comparison

• f

program administrator and customer costs to utility resource savings

Source: Table 2-2, NAPEE - Understanding Cost-Effectiveness of Energy Efficiency Programs

Test Benefits Costs Participant Cost

• Incentive Payments
• Bill Savings
• Tax Credits
• Incremental

equipment costs

• Incremental

installation costs Program Administrator • Energy related costs avoided by utility

• Capacity

related costs avoided by utility

• Program overhead costs
• Participant incentive costs
• Program installation costs

Ratepayer Impact Measure

• Energy

related costs avoided by utility

• Capacity

related costs avoided by utility

• Program overhead costs
• Participant incentive costs
• Program installation costs
• Lost

revenue due to reduced energy sales Total Resource Cost

• Energy

related costs avoided by utility

• Capacity

related costs avoided by utility

• Tax credits
• Program overhead costs
• Program installation costs
• Incremental measure costs

(whether paid by utility or customer)

Source: Table 3-1, NAPEE - Understanding Cost-Effectiveness of Energy Efficiency Programs

Why is cost-effectiveness important?

• Ratepayers are only asked to pay for DSM/EE

that produces net benefits to the utility system

• Customer incentives should not be needed to do

what is already required

• DSM/EE should assist in otherwise delaying or
• ffsetting the need for future supply-side

generation resources

PEC – Home Energy Improvement Program

• Monetary Incentives for:

– 50% of cost up to $190 for air duct repairs – 37.5 ¢/ft2 up to $500 for attic insulation (R30 or >) and sealing – $300 per unit for high efficiency central AC, heat pumps, (Min. SEER of 15) and geothermal heat pumps (Min. EER of 19)

PEC – Home Energy Improvement Program

• Monetary Incentives for:

– $100 for HVAC audit (coil cleaning, refrigerant charge, and air flow adjustment) – $350 for heat pump water heaters (Min EE factor of 2.0) – $25 per unit for a high efficiency room air conditioners (Energy Star)

PEC – Home Advantage Program

(for building permits issued prior to March 1, 2012)

• Monetary Incentives for:

– Building Construction (E-Star certified; AC or HP Min SEER of 14) – Heat Pump upgrade (Min SEER of 15) – Central AC upgrade (Min SEER of 15) – Geothermal Heat Pump (Min EER of 17) – Cooperative Advertising (promote E-Star construction)

PEC – Neighborhood Energy Saver Program (low income)

• Company-selected vendor provides:

– One-on-one energy education – On-site energy assessment – Installation of comprehensive package of energy conservation measures (no cost to customer)

• CFLs; water heater wrap and pipe insulation, temp.

check and adjustment; low-flow faucet aerators and showerheads; refrigerator coil brush; HVAC winterization kit; HVAC filters; air sealing materials; etc.

Duke Energy Residential Incentive Programs

• Smart Saver Program for AC

– Incentive payments for central AC or electric HP in new or existing residences (Min. SEER

• f 14); geothermal HP (Min. EER of 11.5) -

$300 per unit for new homes. Incentive is split between customer and HVAC dealer for existing homes.

• Smart Saver Program for EE Products

– Distribution of Free CFLs – Future incentives may include other household Energy Star appliances

Duke Energy Residential Incentive Programs

• Residential Retrofit Pilot Program

– Incentives for up to 300 customers to test delivery

• ptions (Consultant option recommends improvements, with

someone else installing. Contractor option recommends and installs improvements.)

– Energy assessments of existing homes concentrating

• n building envelope improvements to reduce

energy losses. – Incentive payments based on percentage of costs of recommended improvements, up to $800.

How can industry professionals engage the process and become involved with utility sponsored EE programs?

• Participate in cooperative marketing strategies with

utilities, including understanding of rates and tariffs.

• Participate in vendor selection process.
• Invite utilities to participate / sponsor activities

designed to promote energy efficiency.

• Participate in NCUC proceedings by offering

comments and/or expert testimony

Questions?

james.mclawhorn@psncuc.nc.gov (919) 733-1519 jack.floyd@psncuc.nc.gov (919) 715-9018