GRANTED ? Nora A. Naughton Presented before the Indiana and - PowerPoint PPT Presentation

1 E NERGY E FFICIENCY : THE LEAST COST ENERGY RESOURCE MOST LIKELY TO BE TAKEN FOR GRANTED ? Nora A. Naughton Presented before the Indiana and Illinois local chapters of AEE- February 17, 2016

Midwest Energy Efficiency Alliance (MEEA)  MEEA is a nonprofit membership organization with 150+ members, including: • Electric and Gas Utilities • State and local governments • Manufacturers and retailers • Academic and research institutions • Energy service companies and contractors  Since 2000, MEEA has been the leading source for raising awareness and advancing sound energy efficiency policies and programs in the Midwest  MEEA balances the diverse interests of its members and network across the public and private sectors, creating a common ground to affect positive change for energy efficiency in the Midwest. 2

MEEA’s Role in the Midwest • Nonprofit serving 13 Midwest states: IL, IN, IA, KS, KY, MI, MN, MO, NE, ND, OH, SD, WI • Actions: – Advancing energy efficiency policy – Facilitating energy efficiency programs – Coordinating utility program efforts – Delivering training & workshops – Evaluating & promoting emerging technologies – Promoting best practices 3

Energy Efficiency Resource Standard (EERS) Source: American Council for an Energy Efficiency Economy (ACEEE) 4

Energy Efficiency Policies & Investment in the Midwest Timeline of Midwest EE Policies 1983 MN Pilot legislation $ Billion 1990 IA Initial legislation $2.0 1991 MN CIP requirement adopted $1.78 1996 IA Legislation updated $1.8 1999 WI Public Benefit Fund adopted (electric & gas) $1.6 2007 IL EERS legislation adopted (electric) $1.4 2007 MN EERS legislation adopted (electric & gas) $1.2 2008 MI EERS legislation adopted (electric & gas) $1.40 2008 OH EERS legislation adopted (electric) $1.0 2008 IA EE mandated by Executive Order (electric & gas) $0.8 2009 IL EERS legislation adopted (gas) $0.6 2009 IN EERS implemented by regulatory order $0.4 2009 MO Voluntary EE standard legislation adopted (electric) $0.38 $0.2 2010 WI EERS implemented by regulatory order $0.0 2011 WI EERS adjusted by legislation 2000 2002 2004 2006 2008 2010 2012 2014 2014 IN EERS overturned by legislation 2014 OH EERS ‘paused’ by legislation August 2015

Energy Savings for States with an EERS vs. those Without Source: ACEEE 6

Midwest Efficiency Savings - Electric Wisconsin 5.4 million MWh 2010 No specific targets 7.3 million MWh 2016 2016 0.6% elec current est. North Dakota South Dakota Nebraska Michigan ND Kansas 1% elec by 2012 Voluntary electric efficiency only MN SD Indiana WI Overturned 2014. MI Minnesota Future legislation & funding uncertain 1.5% elec by 2010 IA NE Ohio OH Two- year “freeze” after IN IL 2014. Iowa KS Future legislation & KY MO Set on a utility basis funding uncertain 1.2% elec current plans Kentucky Missouri Illinois Voluntary electric IRP process; 2% elec by 2015 efficiency only Voluntary electric January 2016

Midwest Efficiency Savings – Natural Gas Wisconsin 87 million therms 2010 No specific targets 159 million therms 2016 2016 0.5% gas current est. North Dakota * South Dakota Nebraska Michigan ND Kansas 0.75% gas by 2012 Voluntary gas efficiency only MN SD Indiana WI Voluntary Natural Gas MI Minnesota efficiency only * 1.0% gas by 2010 * IA (gas goal reduced by NE commission) Ohio OH IN Voluntary gas efficiency * IL only Iowa KS KY Set on a utility basis MO 0.85% gas current plans Kentucky Missouri Illinois Voluntary gas efficiency Voluntary gas 1.5% gas by 2017 Gas savings data not available * only efficiency only January 2016

Midwest Efficiency Targets and Investment – Electric & Gas Wisconsin 2010 $1.03 billion No specific targets 0.6% elec current est. 2015 $1.81 billion 0.5% gas current est. North Dakota South Dakota Nebraska ND Michigan Kansas 1% elec by 2012 Voluntary energy efficiency 0.75% gas by 2012 only MN SD Indiana WI Overturned 2014 MI Minnesota Future legislation & funding unclear 1.5% elec by 2010 IA 1.0% gas by 2010 NE (gas goal reduced by Ohio OH commission) Two- year “freeze” after IN 2014. IL Iowa Future legislation & KS KY Set on a utility basis funding unclear. MO 1.2% elec current plans 0.85% gas current plans Kentucky Missouri Illinois Voluntary electric IRP process; 2% elec by 2015 and gas Voluntary electric 1.5% gas by 2017

Illinois 2011: ICC reports to Legislature 2015-16: 2012: that rate Budget 2009: impact Natural stalemate Electricity Gas ramp caps will creates EE ramp up up limit EE uncertain under 8-103 pursuant savings in funding of of PUA to 8-104 of future EE PUA years but programs do not “unduly constrain.” 10

Energy Efficiency Resource Standard (EERS) Electricity Natural Gas 220 ILCS 5/8-103 220 ILCS 5/8-104 • Ramp up from • Ramp up from 2009-2015 2012-2019 • Target of 2.0% of retail • Target of 1.5% of retail sales in 2015 and sales in 2019 and thereafter thereafter • Limited by rate impact • Limited by rate impact cap of 2.015% cap of 2.0% 11

Existing Policy Framework – Rate Cap Energy efficiency in Illinois is Example of How Rate Caps Limit EE limited by a rate cap. The utilities are not allowed to spend in excess of the amount which would cause rates to rise above the capped percent, even if this means that they cannot reach their mandated efficiency targets. Currently, this limits Illinois utilities to about 1.0% annual savings. 12

Proposed Legislation 13

Clean Jobs Bill HB 2607/ SB 1485 • Cumulative and increased energy efficiency standard – Expanded benefits of EE recognized in cost-benefit test • Removal of rate impact cap • Increase in low-income funding • Expanded on-bill financing • Direction to ILEPA to develop clean power plan market-based compliance strategies 14

ComEd Bill HB 3328/ SB 1879 • No increase in the energy efficiency standard • Expands energy efficiency programs • Construction of microgrids ($300 million) • Encourages community solar projects • Demand charges (based on highest usage) • Allows electric utilities to claim gas savings • Utilities take over responsibility of delivery public facility and low-income programs in 2018 15

Exelon Bill HB 3293/ SB 1585 • Creates a state Low Carbon Portfolio Standard that would include nuclear power • Would require utilities to purchase low-carbon energy credits equivalent to 70% of the utility's annual retail sales • Implements a consumer price cap to a 2.015 percent annual increase compared to 2009 rates, or about $2/month for the average residential electricity customer 16

Status of DCEO Budget 17

Key Issues and Developments: Illinois • Executive – A final FY16 budget has not been adopted and is not likely to be agreed upon, rather, DCEO and all other state agencies have been directed to develop FY17 budgets.  By executive order issued on Feb.3, 2016, Governor Rauner directed DCEO to collaborate with economic development corporations, including the Illinois Business and Economic Development Corp., to promote job creation – For the full text of EO 2016-02, see: https://www.illinois.gov/Government/ExecOrders/Documents/2016/ExecutiveOrder201 6-02.pdf • Legislative – HB 4320 (Harris) bill makes appropriations for FY 2016 from non general revenue funds )- Final action deadline extended to April 28, 2016; HB 5970(Evans) bill introduced Feb. 11 and referred to rules committee, funds DCEO  Stakeholders are continuing to meet on a compromise energy bill to incorporate concepts from HB 2607/ SB 1485 (Clean Jobs Bill); HB 3293/ SB 1585 (Exelon Bill) and HB 3328/ SB 1879 (ComEd Bill); On 2/11, HB6247 and HB6248 introduced, both referred to Rules Committee. 18

Indiana 2014: Legislature 2015: 2012: repeals EERS. 2009: DSM plan and Energizing All investor IRP rule Administrative Indiana owned utilities order creates making Program file DSM plans Energizing Indiana process Implemented with IN Utility begins Regulatory Commission 19

Energy Savings Reduced in Indiana after the Repeal of their Energy Efficiency Resource Standard *Indiana & Michigan Power has not yet filed a plan for 2016 20

Indiana Electric Efficiency Spending and Savings by Customer Class $Million 150 100 50 0 2010 2011 2012 2013 2014 2015 1200 GWh 1000 800 600 400 200 0 2010 2011 2012 2013 2014 2015 C&I Residential Low Income T&D Indirect Costs Source: Utility Filings in IURC Causes 42693-S1, 43955-DSM 02, 44486, 44495, 44497, and 44501. 21

A Strong Return on Investment • Letter to Governor Pence (March 2014) – 11 companies with an in-state presence – Representing more than 10,000 manufacturing and efficiency jobs in state – Expressed opposition to SB 340 • Energizing Indiana Year 3 Report – 18,679 jobs resulted from the implementation of the 3-year program cycle – Plus 438 direct hired by the program administrator (GoodCents) – More data: https://myweb.in.gov/IURC/eds/Modules/Ecms/Cases/Doc keted_Cases/ViewDocument.aspx?DocID=0900b631801c 7d3d 22