ENERGY EFFICIENCY: 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
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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
ENERGY EFFICIENCY: 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
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MEEA is a nonprofit membership
including:
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.
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KY, MI, MN, MO, NE, ND, OH, SD, WI
– Advancing energy efficiency policy – Facilitating energy efficiency programs – Coordinating utility program efforts – Delivering training & workshops – Evaluating & promoting emerging technologies – Promoting best practices
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Source: American Council for an Energy Efficiency Economy (ACEEE)
Timeline of Midwest EE Policies
1983 MN Pilot legislation 1990 IA Initial legislation 1991 MN CIP requirement adopted 1996 IA Legislation updated 1999 WI Public Benefit Fund adopted (electric & gas) 2007 IL EERS legislation adopted (electric) 2007 MN EERS legislation adopted (electric & gas) 2008 MI EERS legislation adopted (electric & gas) 2008 OH EERS legislation adopted (electric) 2008 IA EE mandated by Executive Order (electric & gas) 2009 IL EERS legislation adopted (gas) 2009 IN EERS implemented by regulatory order 2009 MO Voluntary EE standard legislation adopted (electric) 2010 WI EERS implemented by regulatory order 2011 WI EERS adjusted by legislation 2014 IN EERS overturned by legislation 2014 OH EERS ‘paused’ by legislation
$ Billion
Energy Efficiency Policies & Investment in the Midwest
August 2015
$1.40 $0.38 $1.78 $0.0 $0.2 $0.4 $0.6 $0.8 $1.0 $1.2 $1.4 $1.6 $1.8 $2.0 2000 2002 2004 2006 2008 2010 2012 2014
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Midwest Efficiency Savings - Electric
2010 5.4 million MWh 2016 2016 7.3 million MWh
Illinois
2% elec by 2015
Iowa
Set on a utility basis 1.2% elec current plans
Wisconsin
No specific targets 0.6% elec current est.
Michigan
1% elec by 2012
Ohio
Two-year “freeze” after 2014. Future legislation & funding uncertain
Indiana
Overturned 2014. Future legislation & funding uncertain
Minnesota
1.5% elec by 2010
Missouri
IRP process; Voluntary electric
Kentucky
Voluntary electric efficiency only
North Dakota South Dakota Nebraska Kansas
Voluntary electric efficiency
IA IL IN KS KY MI MN MO ND NE OH SD WI
January 2016
Midwest Efficiency Savings – Natural Gas
2010 87 million therms 2016 2016 159 million therms
Illinois
1.5% gas by 2017
Iowa
Set on a utility basis 0.85% gas current plans
Wisconsin
No specific targets 0.5% gas current est.
Michigan
0.75% gas by 2012
Ohio
Voluntary gas efficiency
Indiana
Voluntary Natural Gas efficiency only
Minnesota
1.0% gas by 2010 (gas goal reduced by commission)
Missouri
Voluntary gas efficiency only
Kentucky
Voluntary gas efficiency
North Dakota South Dakota Nebraska Kansas
Voluntary gas efficiency only
IA IL IN KY MI MN MO ND NE OH SD WI KS
*
*
Gas savings data not available
* * *
January 2016
Midwest Efficiency Targets and Investment – Electric & Gas 2010 $1.03 billion 2015 $1.81 billion
Illinois
2% elec by 2015 1.5% gas by 2017
Iowa
Set on a utility basis 1.2% elec current plans 0.85% gas current plans
Wisconsin
No specific targets 0.6% elec current est. 0.5% gas current est.
Michigan
1% elec by 2012 0.75% gas by 2012
Ohio
Two-year “freeze” after 2014. Future legislation & funding unclear.
Indiana
Overturned 2014 Future legislation & funding unclear
Minnesota
1.5% elec by 2010 1.0% gas by 2010 (gas goal reduced by commission)
Missouri
IRP process; Voluntary electric
Kentucky
Voluntary electric and gas
North Dakota South Dakota Nebraska Kansas
Voluntary energy efficiency
IA IL IN KS KY MI MN MO ND NE OH SD WI
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2009: Electricity EE ramp up under 8-103
2012: Natural Gas ramp up pursuant to 8-104 of PUA 2015-16: Budget stalemate creates uncertain funding of EE programs 2011: ICC reports to Legislature that rate impact caps will limit EE savings in future years but do not “unduly constrain.”
Electricity 220 ILCS 5/8-103
2009-2015
sales in 2015 and thereafter
cap of 2.015%
Natural Gas 220 ILCS 5/8-104
2012-2019
sales in 2019 and thereafter
cap of 2.0%
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Energy efficiency in Illinois is 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.
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Example of How Rate Caps Limit EE
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HB 2607/ SB 1485
– Expanded benefits of EE recognized in cost-benefit test
compliance strategies
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HB 3328/ SB 1879
low-income programs in 2018
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HB 3293/ SB 1585
include nuclear power
equivalent to 70% of the utility's annual retail sales
increase compared to 2009 rates, or about $2/month for the average residential electricity customer
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– A final FY16 budget has not been adopted and is not likely to be agreed upon, rather, DCEO and all other state agencies have been directed to develop FY17 budgets.
collaborate with economic development corporations, including the Illinois Business and Economic Development Corp., to promote job creation – For the full text of EO 2016-02, see: https://www.illinois.gov/Government/ExecOrders/Documents/2016/ExecutiveOrder201 6-02.pdf
– HB 4320 (Harris) bill makes appropriations for FY 2016 from non general revenue funds )- Final action deadline extended to April 28, 2016; HB 5970(Evans) bill introduced Feb. 11 and referred to rules committee, funds DCEO
concepts from HB 2607/ SB 1485 (Clean Jobs Bill); HB 3293/ SB 1585 (Exelon Bill) and HB 3328/ SB 1879 (ComEd Bill); On 2/11, HB6247 and HB6248 introduced, both referred to Rules Committee.
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2009: Administrative
Energizing Indiana 2012: Energizing Indiana Program Implemented 2015: DSM plan and IRP rule making process begins 2014: Legislature repeals EERS. All investor
file DSM plans with IN Utility Regulatory Commission
Energy Savings Reduced in Indiana after the Repeal of their Energy Efficiency Resource Standard
*Indiana & Michigan Power has not yet filed a plan for 2016 20
Indiana Electric Efficiency Spending and Savings by Customer Class
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$Million GWh
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.
50 100 150 2010 2011 2012 2013 2014 2015 200 400 600 800 1000 1200 2010 2011 2012 2013 2014 2015
– 11 companies with an in-state presence – Representing more than 10,000 manufacturing and efficiency jobs in state – Expressed opposition to SB 340
– 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
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– No new EE legislative activity since SB 412 became law on 5/6/15.
meeting 2/3/16
quarter.
required by 2017. Programs authorized through 2018 or until new plan approved.
further Order.
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Use of an Integrated Resource Plan (IRP) as a Tool To Identify Options
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Source: Bruce Biewald and Rachel Wilson, Regulatory Assistance Project (RAP), 2013.
Load forecast Reserves and reliability Demand side management Supply options Fuel prices Environmental costs and constraints Plan for Uncertainty Existing Resources Valuing and selecting plans Action plan Documentation Time frame
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Maximization of Energy Efficiency Savings
than 3.5 times as much program spending (2.63% vs. 0.76%) and savings (1.11% vs. 0.30%) as the 24 states without an EERS policy, regardless of whether the state had an IRP policy.
also had an EERS spent and saved over 3 times as much as states that had an IRP requirement but no EERS requirement (2.66% of revenues vs. 0.76%; and 1.16% of sales vs. 0.35%).
as much and saved nearly five times as much (0.90% vs. 0.19%) as states with no IRP/planning requirement and no EERS.
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0.02% 0.06% 0.09% 0.24% 0.30% 0.40% 0.59% 0.90% 1.00% 1.05% 1.10% 1.28% 1.31%
0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40%
KS ND SD KY NE MO IN WI IL IA OH MI MN
Energy Efficiency in Midwest States
Saved electricity as percent of total retail electricity sales, 2014
Sources: MEEA, 2015; EIA, 2015
EERS Neither IRP nor EERS IRP Only
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model as well as a Conservation Improvement Plan standard plus
energy efficiency standard goal as an input within each utility’s IRP
between 2007 and 2012
as a technical reference manual, utilities should use values reflected in the technical reference manual in their IRP inputs.
should have the authority to approve, reject, request more information, and modify utilities’ IRPs.
future energy efficiency resource standards as a load reduction input to IRP modeling. Make EE the a priority resource over generation.
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electric and gas utility by IUB and updated every five years after an assessment of energy usage and potential savings.
efficiency programs in Iowa, residents and businesses reaped $1.56-$3.49 in benefits.
$1.03-$2.26 in benefits were achieved.
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demand-side resources
incorporates
a load reduction measure so the plan includes targets
significant savings in a cost-effective, thoughtful way.
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consumed by the Industrial sector (EIA 2014)
(McKinsey 2009)
Midwest states are in Top 10 consumers of total energy in the industrial sector, and 4 more are in the Top 25 (EIA 2014)
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20 40 60 80 100 120 140 160 180 200
Industrial Energy Efficiency Savings [GWh] Portion of EE Savings by Customer Class
Size proportional to Total EE Savings in 2012
Focus on Energy Wisconsin First Energy Ohio Xcel Energy Minnesota Interstate Power & Light Iowa AEP Ohio Consumers Energy Michigan Duke Energy Indiana Duke Energy Ohio MidAmerican Energy Iowa NIPSCO Indiana
Top Industrial EE Program Administrators in the Midwest
42% 43% 34%
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*out of 79 Midwestern program administrators that reported non-zero Industrial Incremental EE savings on 2012 EIA-861 **out of 192 Midwestern program administrators that reported non-zero Total Incremental EE savings on 2012 EIA-861
Reduces overall amount of energy saved Loss of knowledge and data – utilities report EE spend & savings;
Portfolio costs all borne by residential & small business customers Reduces potential of efficiency as a path for Clean Power Plan compliance Less cost-effective programs are a higher percent of overall portfolio Reduced cost-effectiveness of portfolio
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Michigan
electric and natural gas. In fact both had zero participants.
2014)
Minnesota
public policy… All utility customers, even those who do not directly participate …benefit from the avoided cost savings that are the primary goal of energy efficiency programs… Iowa has a strong public policy of supporting and developing energy efficiency and the Board will not undermine Iowa’s policy by allowing certain customers to opt-out of the energy efficiency paradigm” (IUB 2013)
Iowa
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promotes the greatest savings from energy efficiency; provides focus and establishes EE as a priority
for each utility and can enhance the benefits of an EERS
the plan includes prioritizing EE as the first step to addressing load issues over constructing generation and/or transmission, it can provide focus
programs, even if self-directed, provides greater savings. Reporting requirements provide data and accountability.
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Residential Building Energy Code Adoption in the Midwest
No Mandatory Statewide Code
Code Level / Equivalence
2009 IECC 2012 IECC 2015 IECC
State Adoption Municipal Adoption
2009 IECC Adopted by Major Municipality 2012 IECC Adopted by Major Municipality In Process to 2015 IECC for Major Municipality Enhanced 2009 IECC Adopted by Major Municipality
As of January 2016
2004 2005 2006 2007 2008 2009 2010 2011 2012 2014 2013 2015
Code Level / Equivalence
No Mandatory Statewide Code Pre-2000 Code 2000 IECC 2003 IECC 2006 IECC 2009 IECC 2012 IECC 2015 IECC
Code upgrade in process
As of August 2015
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Commercial Building Energy Code Adoption in the Midwest
No Mandatory Statewide Code
Code Level / Equivalence
2009 IECC/90.1-2007 2012 IECC/90.1-2010
State Adoption Municipal Adoption
2009 IECC Adopted by Major Municipality 2012 IECC Adopted by Major Municipality In Process to 2015 IECC for Major Municipality Enhanced 2009 IECC Adopted by Major Municipality
As of January 2016
In Process to 2015 IECC/90.1-2013 2015 IECC/90.1-2013
2004 2005 2006 2007 2008 2009 2010 2011 2012 2014 2013 2015
Code Level / Equivalence
No Mandatory Statewide Code Pre-2000 Code 2000 IECC 90.1-1999 2003 IECC 90.1-2001 2006 IECC 90.1-2004 2009 IECC 90.1-2007 2012 IECC 90.1-2010 2015 IECC 90.1-2013
Code upgrade in process
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Building Energy Benchmarking General Definition:
standard.
Benchmarking provides benefits to:
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State Pilot Underway
State Owned/Operated Building Benchmarking
State Pilot Complete State Owned Considering State Owned Enacted Challenge Program Underway in Municipality Considering Legislation by Municipality
Municipal + Private Owned Benchmarking Ordinance
RToS
Voluntary Residential Time of Sale Disclosure Updated July 2015 Adopted by Municipality
47 Energy Savings Targets for Utilities Energy Efficiency Resource Standard Incorporating Energy Efficiency into Resource Planning Demand Side Management (DSM) Planning Market-Based EE Energy Savings Performance Contracts: delivery of savings through performance-based contracts; usually provide guaranteed savings. Financing Voluntary Labeling and Benchmarking Wholesale Electricity Markets: Behavioral Efficiency Programs Use of information dissemination, social interaction, competition, and/or potential rewards rather than direct financial incentives as the primary mechanism for changing energy consumption behavior. Appliance Efficiency Standards Efficiency Standards: Mandate minimum energy and water efficiency requirements for selected appliances and equipment that are not subject to existing federal standards. Building Energy Use Building Energy Codes: Establish minimum efficiency requirements for new and renovated residential and commercial buildings. Other Mandatory Building Efficiency Policies: Examples include mandatory energy-use benchmarking and disclosure requirements
Policies to Drive Energy Efficiency
Plan (“CPP”) in a 5-4 decision.
merits of the challenges brought against the U.S. EPA for issuing the CPP.
while lawsuits challenging the legality of the plan are adjudicated by the D.C. Circuit Court of Appeals.
enforce any deadlines or requirements associated with the CPP.
utilities, businesses and advocates throughout the Midwest to advance energy efficiency policies that will save ratepayers money, create in-state jobs, improve air quality, and pave a path to least- cost compliance with the carbon emission targets of the CPP.
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Indiana: http://www.insideindianabusiness.com/story/31185516/pence- supports-supreme-court-stay-of-clean-power-plan
low-cost energy for our state, and tonight's Supreme Court decision to put President Obama's carbon dioxide regulations on hold is a win for Indiana. The Clean Power Plan exceeds the authority granted to the EPA under the Clean Air Act, and I am pleased that it will not be enforced while the lawsuit filed by Indiana and 28 other states and state agencies moves through the courts. Hoosiers may be assured that our state will continue to use every legal means available to fight President Obama's war on coal.” Iowa: http://www.iowadnr.gov/Environmental-Protection/Air- Quality/Greenhouse-Gas-Emissions/Carbon-Pollution-Stnds-111d
Council Bluffs, IA.
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Michigan: http://www.michigan.gov/carbonrule/0,6097,7-347--376588-- ,00.html
state will suspend activities to comply with the rule and its timeline for submissions. The state will wait for resolution of the issue through the courts and then determine how best to proceed.
under way and paid for, as those findings will be helpful for other planning and compliance activities. The Michigan Carbon Rule website will continue, and we will post the modeling results there, when they are available. In addition, the sign-up lists will also remain live so interested individuals can be notified when and if state activity resumes.
Kansas: http://www2.ljworld.com/news/2016/feb/11/senate-moves- block-clean-power-plan-study/
Corporation Commission from spending any money to study how to comply with the new federal Clean Power Plan until the U.S. Supreme Court resolves a pending legal challenge.
submitted to the U.S. Environmental Protection Agency if a legislative oversight committee approves. Missouri: http://dnr.mo.gov/env/apcp/cpp/index.html
No CPP meetings currently scheduled.
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Minnesota: http://www.startribune.com/minnesota- vows-to-move-ahead-with-clean- power/368563271/
disappointing, it does nothing to diminish our resolve in Minnesota to keep moving forward on clean energy initiatives, including the development of our state’s Clean Power Plan.”
that we keep doing everything in our collective powers to reduce harmful greenhouse gas emissions, improve energy efficiency and advance Minnesota’s clean energy economy.”
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http://www.theindependent.com/news/local/state wide-clean-power-plan-meetings- postponed/article_ea6087a4-d378-11e5-b396- 3fc079028b3e.html and http://deq.ne.gov/NDEQProg.nsf/OnWeb/NCMS
Director Jim Macy has announced the postponement of meetings in nine communities across the state. The meetings were intended to discuss the EPA Clean Power Plan mandate
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North Dakota: http://bismarcktribune.com/bakken/north-dakota-
plan/article_68620830-56fe-52d1-a80d-c98ae2ac3dc9.html
immediately suspend work on a state plan to comply with the rules, which aim to address global warming by curbing carbon dioxide emissions, said Dave Glatt, chief of the department’s environmental health section. Ohio: http://www.cleveland.com/business/index.ssf/2016/02/us_supreme_cou rt_stops_clean_p.html
in delaying the implementation of the plan until its constitutionality is decided.
plans moving forward."
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Wisconsin:
prohibiting state agencies from working to comply with President Barack Obama's sweeping plan to address climate change. West Virginia: http://wvmetronews.com/2016/02/15/dep-study- continues-despite-high-court-stay-on-clean-power-plan/
a stay on further implementation of the federal Environmental Protection Service’s Clean Power Plan for the time being, the West Virginia Department of Environmental Protection continues its work on the first step toward development of a plan to implement the new emission requirements.
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– Midwest State Policies & Practices
– Policymakers Guidebook to EE – Building Energy Codes – Energy Data and Benchmarking
www.mwalliance.org/policy
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Online resource for MEEA members and advocates in communicating the value of energy efficiency to policymakers, the public, and other stakeholders.
testimony submitted in MI and OH; state contacts; legislative and regulatory links, etc.
efficiency policies and programs in the Midwest.
state investments, state regulations, etc.
Toolkit available at: www.mwalliance.org/advocacy
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With more than 600 attendees, MES is the region’s premier energy efficiency conference. Register online or learn more at www.MEEAconference.org
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February 24-26, 2016 Chicago Hilton & Towers
Nora A. Naughton Director of Policy Midwest Energy Efficiency Alliance nnaughton@mwalliance.org www.mwalliance.org
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