Best Practices in Energy Efficiency Program Screening - Synapse ...

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Appendix A – Illustrative Example and Avoided Costs Introduction Throughout this paper we have referenced an actual New England utility's energy efficiency programs and screening results, in order to demonstrate the implications of the different screening practices. We have relied on the same utility in each of the examples discussed in the body of the report, and have based each example on the utility’s actual efficiency programs, including its projected (or actual where pertinent) budget, savings, benefits, and other assumptions. This Appendix provides a more complete background on that utility’s efficiency programs, as well as the avoided cost assumptions included in its cost-effectiveness analysis. Each of these topics is discussed in more detail below. Program Descriptions The report focuses on nine of the utility’s programs that are common to efficiency programs in many states. This New England utility actually administers more programs than those discussed in the report, such as a behavioral-based program. By restricting the analysis to these nine programs, our intention is to focus on a core set of programs that are typically offered in states, rather than provide a comprehensive analysis of program portfolios. The identified programs and a brief description of each program’s purpose are provided below. Residential Retrofit: the purpose of this program is to provide residential customers with energy efficiency recommendations that enable them to identify and initiate the process of installing cost-effective energy efficiency upgrades. The program provides information through outreach mechanisms, incentives, and multiple financing options. Residential New Construction: the purpose of this program is to capture lost opportunities, encourage the construction of energy-efficient homes, and drive the market to one in which new home are moving towards net-zero energy. Residential Appliances: the purpose of this program is to raise consumer awareness of the benefits of energy-efficient ENERGY STAR-qualified consumer products, encourage consumers to purchase qualified appliances and consumer electronics, promote higher efficiency standards for products, and to help customers reduce energy bills by replacing or recycling inefficient products. Residential Lighting: the purpose of this program is to increase consumer awareness of the importance and benefits of purchasing ENERGY STARqualified lighting products and expand the availability, consumer acceptance, and use of high-quality energy-efficient lighting technologies and controls. Low-Income Retrofit: the purpose of this program is to deliver energy efficient products and services directly to the homes of income eligible customers to help them lower their energy bills to achieve deeper and broader energy savings. Best Practices in Energy Efficiency Program Screening | www.nhpci.org | 67
Low-Income New Construction: the purpose of this program is to capture lost opportunities, encourage the construction of energy-efficient homes, and drive the market to one in which new homes are moving towards net-zero energy. Small Commercial and Industrial (C&I) Retrofit: this program focuses on comprehensive gas and electric energy efficiency opportunities associated with mechanical, electrical, and thermal systems in existing commercial, industrial, governmental and institutional buildings. It provides technical assistance and incentives to encourage retrofitting of equipment that continues to function, but is outdated and inefficient, and can be replaced with a premium efficient product. Large C&I Retrofit: this program focuses on comprehensive gas and electric energy efficiency opportunities associated with mechanical, electrical, and thermal systems in existing commercial, industrial, governmental and institutional buildings. It provides technical assistance and incentives to encourage retrofitting of equipment that continues to function, but is outdated and inefficient, and can be replaced with a premium efficient product. C&I New Construction: this program is designed to optimize the efficiency of equipment, building design and systems in new construction and renovation of commercial, industrial, institutional and government facilities. The focus is on offering a comprehensive set of electric and gas efficiency options that are specific to the needs of each unique facility. The program also targets the brief window of opportunity to install premium grade replacements when equipment fails or is near the end of its useful life. Avoided Costs Assumptions Introduction The avoided cost assumptions used by the New England utility are based on Synapse’s Avoided Energy Supply Costs in New England: 2011 Report (AESC Study). The AESC Study provides projections of marginal energy supply costs that will be avoided due to reductions in the use of electricity, natural gas, and other fuels resulting from energy efficiency programs offered to customers throughout New England (Synapse 2011). The AESC Study provides estimates of avoided costs for program administrators throughout New England to support their internal decision-making and regulatory filings for energy efficiency program cost-effectiveness analyses. Ultimately, the relevant regulatory agencies in each state specify the categories of avoided costs that program administrators in their states are expected to use in their regulatory filings, and approve the values used for each category of avoided cost. Avoided Energy Costs Electric energy costs are avoided by efficiency programs due to a reduction in the annual quantity of electric energy that utilities and competitive suppliers are obligated to acquire for their customers. Therefore, avoided electric energy costs are an estimate of the value of a reduction in annual electric energy use by retail customers. In New England, the competitive, wholesale market determines the value of avoided energy costs. | 68 Best Practices in Energy Efficiency Program Screening | www.nhpci.org
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Preface In 2011, a group of energy
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Executive Summary Accounting for th
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Unfortunately, OPIs are often not a
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mitigating GHG emissions. In region
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Choosing the most appropriate test
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1. Introduction Background Despite
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Figure 1.1. Levelized Costs by Prog
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The Participant Test. This test inc
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The TRC test is the next most compr
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