CPUC White Paper on Energy Efficiency Baselines for EE Programming, AB 802 Implementation: Comments Due May 10th

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CORRECTED PAPER AND UPDATED COMMENTS DEADLINES RELEASED BY THE CPUC 4/28: Please see here.

Yesterday afternoon, the CPUC’s Energy Division released its staff proposal on Energy Efficiency Baselines, following the commitments made in October’s rolling portfolio CPUC Decision and responding to AB 802’s requirement that the CPUC allow energy efficiency programs to provide incentives based on metered energy savings.

AB 802’s above requirement is an overhaul of how and what in an energy project has been able to be supported through ratepayer-funded incentives. Historically, incentives have been provided based on how much an energy-saving project goes beyond current energy code, rather than how much an energy-saving project saves beyond the pre-project conditions. (A great overview of this is available in the What is a Baseline? section on Page 3 of the white paper – or page 10 of this link.)

There is dramatic potential to provide funds that incentivize non-code complying energy users to save energy through energy projects. However, as the CPUC lays out in the Challenges and Implications section (white paper Page 6, or Page 13 of the link above), there is also potential to double-count energy savings that had been counted under the Codes and Standards section of the portfolio, and also dilute the savings the state had been calculating was achieved through ratepayer funds.

The staff white paper assessing energy efficiency baselines for the implementation of AB 802, available starting at Page 8, here, shares the following overall findings:

  • The appropriate baseline (i.e., existing conditions or code) can be identified and applied broadly for certain programs, while for other programs the appropriate baseline depends on the measure or other situation-specific conditions.
  • To reduce the amount of savings claim complexity and controversy CPUC policy program administrator portfolio design efforts should focus on transitioning significant portions of the energy efficiency program portfolios to the programs directed in AB 802.
  • To reduce the potential for utility staff or contractors to engage in wasteful or fraudulent conduct now that legally-required activities are eligible for utility energy efficiency savings credit, portfolio goals should be set as net of free-ridership.

Comments are solicited by the CPUC , and are due back May 10, 2016. Per the link above, the CPUC proposes the following questions for comment:

Questions specific to the staff white paper:

1. Do you agree with the exceptions recommended by staff to the use of existing conditions baseline? Why or why not? Be specific.

2. Are there additional exceptions to the use of existing conditions baselines that the Commission should adopt? Describe your proposals in detail.

3. Would it be appropriate to apply the baseline policies included in the Assigned Commissioner’s Ruling on high opportunity programs and projects, issued December 30, 2015, rather than make additional new policy in the absence of new information? Why or why not?

4. Are there challenges associated with the practical implementation of the staff proposals included in the attached staff paper? Describe. What recommendations can you make to ensure that any new baseline policy the Commission adopts can be applied consistently in the real world?

5. What recommendations could or should be implemented to minimize assessment or documentation burdens on implementers, customers, and evaluators?

6. Do you agree with or take any exception to the preliminary analysis and assumptions contained in the Navigant technical analysis, on which staff relied in part in preparing their recommendations? Explain.

7. Are there types of energy efficiency activities for which it remains unclear what baseline is appropriate? Describe.

8. Are the measures listed in Tables 1-3 of the attached staff white paper appropriately categorized? Are there types of measures missing from any of these lists? For each recommended change, explain your reasoning.

9. Do you agree with the staff recommendations for how to initially estimate lifecycle impacts for the different categories of baseline treatment until better information is available? Or would you recommend a different approach? Describe your preferred approach to lifecycle impacts and your rationale.

Questions about the broader policy context:

10. What additional analysis do you believe should be performed in order to inform policy on setting of baselines for energy efficiency programs and/or measures? What analysis specifically might help to inform the potential of occurrences of “stranded” efficiency potential?

11. How and where should California modify its analysis, planning, and impact estimation across CEC codes and standards development, utility codes and standards advocacy, local government or marketplace codes and standards compliance and enforcement, and ratepayer rebate and incentive programs, to best address potential, strategy, and influence in realizing savings?

12. In light of recommended potential changes to baselines, what additional or different analysis would you recommend be performed to inform changes to energy efficiency goal setting at the Commission and the CEC in the future?

13. What are the implications of the staff proposal to revert to setting energy efficiency goals based on net savings rather than gross savings? Do you agree or disagree with this recommendation and why?

14. How should the potential baseline policy changes affect the CEC’s analysis of additional achievable energy efficiency included in the biennial demand forecast? Explain in detail.

15. To what extent and how should the staff recommendations on changes to baselines affect the way financial incentives are paid to consumers for energy efficiency projects? Explain in detail.

16. What mechanisms, if any, should be considered to manage annual budgets for incentives and other program expenses once a greater range of efficiency actions and impacts can participate and be compensated within programs?

17. Should there be a distinction between the manner in which savings are credited to consumers installing energy efficiency projects and the manner in which program administrators are credited with savings to be counted against their goals? How and why or why not? Explain in detail.

18. Assuming the Commission adopts a new baseline policy in 2016, how long should this policy remain in place? What additional activities should inform future changes?

19. How should the updating of baseline policy be coordinated with other Commission and CEC activities or future analyses of potential and goals (including adoption of codes and standards for existing buildings, preparation of a demand forecast and the component known as “additional achievable energy efficiency,” and setting goals for “doubling” of energy efficiency, as called for in Senate Bill 350)?

20. How can the Commission best continue to encourage programs to pursue savings above minimum code requirements once AB 802 is fully implemented?

Any party with technical questions on the Attachments to this ruling may contact Dina Mackin in the Commission’s Energy Division at dina.mackin@cpuc.ca.gov or (415) 703-2125.

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