3 years ago

Download MD-PIRG-EE-scorecard-web-version.pdf - Frontier Group

Download MD-PIRG-EE-scorecard-web-version.pdf - Frontier Group

increased in the fourth

increased in the fourth quarter of 2010; inthose three months alone, utilities achieved35 percent of their savings for the entireyear.The PSC has also failed to enforcereporting timelines for utilities, whichon numerous occasions have ignored PSCdirectives to present information on importantdates. In early 2009, neither Pepconor Delmarva followed PSC directivesto include updates to their proposals intime for PSC hearings, pushing back theapproval process by at least two months. 44Similarly, utilities missed a January deadlinein 2011 for reporting interim evaluationdata to the PSC, which squeezedthe PSC’s timeline for drafting new plansfor 2012-2014 based on 2009-2011 progress.45 The PSC has never penalized theutilities for obstructing the administrativeprocess, even though administrativedelays have had a profound impact on theoverall speed of EmPOWER Marylandimplementation.Finally, the PSC has yet to make manyspecific decisions about program evaluation,affecting its ability to determinewhere utilities are failing. In turn, withoutdirection from the PSC, utilities have notbeen able to make adjustments to their programs.In late 2010, Crissy Godfrey, directorof the PSC’s Demand Side ManagementDivision, cited three major problems in thePSC’s evaluation process:• The PSC allows utilities and theirhired consultants to negotiate datesand evaluation principles, which “leadsto long review periods and reducesthe amount of time to complete theevaluation work itself.” 46• The PSC has not yet establishedwhich algorithms, calculationapproaches, or variable inputs areappropriate for all utilities to includein their estimation of electricitysavings—each utility currently hasits own methods of calculation,preventing accurate and comparablesavings estimates. 47• The PSC has no uniform costeffectivenessmodel for all utilityprograms. Each utility has built itsown cost-effectiveness model, and, asa result, “The Commission lacks basicinformation on the cost-effectivenessresults of current programs tocompare with the forecasted costeffectivenessof the program from2008, or simply to be reassured thatthe current programs are still costeffective….”48Less than a year before utilities are tocreate new plans to take them through the2012-2014 compliance period, the PSC’sfailure to complete its evaluation criteriameans that utilities will be creating newplans that do not learn from the lessons ofthe past. Clearly, there are huge gaps betweenprogram implementation and utilityprogram design, and also between utilityprogram design and the state’s EmPOW-ER Maryland goals. Utilities must designprograms that will move the state closerto its EmPOWER Maryland targets, andthey must improve their implementationof those programs. It is up to the PSC toensure that utilities are doing all they canto accomplish these tasks, but so far, it hasfailed to do so.The PSC Fails to HoldUtilities Accountable forEnergy Savings ShortfallsThe PSC is the entity authorized toregulate Maryland’s utilities, but it hasnot used its power to push them to meettheir EmPOWER Maryland targets.Public Service Commission Fails to Ensure Energy Savings 19

The PSC has approved programs thatset savings goals far below EmPOWERMaryland targets. For example, the 2011EmPOWER Maryland interim goal forenergy savings is 503,202 MWh for DelmarvaPower, but in its plan approved bythe PSC, the company set its target forthe same benchmark at 149,288 MWh,less than 30 percent of the EmPOWERMaryland goal. 49 Similarly, both Pepcoand SMECO’s 2011 targets representaround 30 percent of their EmPOWERMaryland goals. 50 Utilities will continueto fail to meet EmPOWER Marylandgoals if the PSC continues to approveplans with interim targets that are lowerthan those laid out by the state.Although utilities have consistentlyfailed to meet even the targets they haveset for themselves for the last two years,the PSC has yet to hold utilities accountable.And although utilities are far belowhalfway to meeting their 2011 EmPOW-ER Maryland interim targets—and willbe planning in 2011 for 2012-2014—thePSC has given no indication that it willuse its authority to spur utilities to improvetheir savings rates.The PSC fails to hold utilities accountablewhen they do not achieve thesavings they project in their plans. Forexample, although Delmarva set its 2011interim target for reducing peak demandat 137 MW (which is 40 percent less thanits EmPOWER Maryland target of 234MW), it has achieved a peak demandreduction of only 18.3 MW with noconsequences to date. 51The PSC has approvedprograms that set savingsgoals far below EmPOWERMaryland targets.The PSC Must TakeAdvantage of All EfficiencyOpportunitiesIf Maryland is going to get back on trackto meet its 2015 EmPOWER Marylandgoals, the PSC must do more to ensurethat utilities are taking advantage of availableefficiency opportunities. However,the PSC has demonstrated that it has verynarrow and inconsistent criteria for programapproval, and, as a result, utilities arelimited in the kinds of efficiency measuresthey design and pursue. This leaves numerousopportunities for bigger energy savingsuntapped.The EmPOWER Maryland Act directsthe PSC to approve all “cost-effective” efficiencyprograms to move the state towardsits goals to reduce consumption. However,based on the decisions it made during itsinitial 2008 review of utility proposals, itis unclear how the PSC defines “cost-effective”or how cost-effectiveness is used(or not used) in conjunction with othercriteria in ultimate decisions. Evidencesuggests, however, that the PSC’s criteriafor energy efficiency are very conservativeand unreasonably exclude many types ofprograms that take advantage of valuableopportunities to save energy.In 2008, the PSC requested that utilitiesinclude data on the cost-effectiveness of allof their programs in their original proposals.Cost-effectiveness can be measuredaccording to five nationally recognizedcost-effectiveness tests, each of whichincludes slightly different criteria for determiningwhether the benefits of a programoutweigh costs. The Total Resources CostTest (TRC), for instance, will determinewhether an efficiency program will reducetotal energy costs in a utility service areaover time, counting the cost of energyefficiency improvements to both utilitiesand consumers. The Ratepayer ImpactMeasure (RIM) test is useful to show howenergy efficiency will affect consumers’20 Falling Behind on Energy Efficiency

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