Library: non-energy impacts

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Energy Efficiency Cost Effectiveness Screening: How to Properly Account for 'Other Program Impacts' and Environmental Compliance Costs

Date Published: November 1, 2012     Document Type: Report
Sectors: Research, Evaluation, & Behavior

Energy efficiency is widely recognized as a low-cost, readily available resource that offers a variety of benefits to utility customers and to society as a whole. Many states have established efficiency savings targets, some states require that energy efficiency be the first choice among resource options, and an increasing number of states require energy efficiency program administrators to pursue all cost-effective energy efficiency. As states continue to advance ratepayer-funded energy efficiency initiatives and establish increasingly aggressive savings goals, it is vitally important that effective practices be communicated and used in screening energy efficiency resources for cost-effectiveness.

There is a great amount of variation across the states in the ways that energy efficiency programs are screened for cost-effectiveness. Many states are applying methodologies and assumptions that do not capture the full value of efficiency resources, leading to under-investment in this low-cost resource, and thus higher costs to utility customers and society.

The purpose of this report is to address two elements of energy efficiency program screening that are frequently treated improperly: other program impacts (OPIs) and the costs of complying with environmental regulations. In some states, proper treatment of these two elements would likely result in a significantly larger amount of energy efficiency being deemed cost-effective relative to today’s practices.

Best Practices in Energy Efficiency Program Screening: How to Ensure that the Value of Energy Efficiency is Properly Accounted For

Date Published: July 23, 2012     Document Type: Report
Sectors: Research, Evaluation, & Behavior

Energy efficiency is widely recognized as a low-cost, readily-available resource that offers a variety of benefits to utility customers and to society as a whole. Many states have established efficiency savings targets, some states require that energy efficiency be the first choice among resource options, and an increasing number of states require energy efficiency program administrators to pursue all cost-effective energy efficiency. As states continue to advance energy efficiency initiatives and establish increasingly aggressive savings goals, it is vitally important that best practices be used in screening energy efficiency resources for cost-effectiveness.

There is a great amount of variation across the states in the ways that energy efficiency programs are screened for cost-effectiveness. Many states are applying methodologies and assumptions that do not capture the full value of efficiency resources, leading to under-investment in this low-cost resource, and thus higher costs to utility customers and society.

The purpose of this report is to identify the best practices available for screening energy efficiency resources, in order to capture and assess the full value of those resources. Many of these best practices are based on economic theory, while others are a matter of public policy and should be based on thoughtful decisions by legislators and regulators. Our goal is to help inform those decisions.

Massachusetts Program Administrators: Final Report - C&I Non-Energy Benefits

Date Published: June 29, 2012     Document Type: Report
Sectors: Commercial & Industrial, Research, Evaluation, & Behavior

This report presents the Massachusetts Cross-Cutting Evaluation Team’s analysis of Non- Energy Impacts (NEI) attributable to 2010 commercial and industrial (C&I) retrofit programs administered by the Massachusetts Program Administrators (PA). Non-Energy Impacts include positive or negative effects attributable to energy efficiency programs apart from energy savings.

DNV KEMA embarked on this study to fulfill the directive set forth by the State’s Department of Public Utilities to update and improve non-energy impact estimates for use in the PA’s 2013 to 2015 energy efficiency three-year plan and future annual plans. In addition, the PAs will use this study to assist in program marketing, as NEIs increase the value proposition of Energy Efficiency programs for participants. The goal of this study was to provide a comprehensive set of statistically reliable NEI estimates across the range of C&I retrofit programs offered by the Massachusetts electric and gas PAs.

DNV KEMA identified the following objectives for this study:

  1. Quantify participant NEIs by gross NEIs per unit of energy savings separately for prescriptive and custom electric and gas measures;
  2. Examine the attribution rates of individuals who did and did not realize NEIs to inform the appropriate free-ridership rate for computing net NEIs; and
  3. Identify incidence of spillover, or energy savings resulting from program-influenced installation of energy efficiency measures that did not receive program incentives, by providing separate estimates for the incidence of “like” and “unlike” spillover.

Addressing Non-Energy Benefits in the Cost-Effectiveness Framework

Date Published: January 1, 2011     Document Type: Report
Sectors: Research, Evaluation, & Behavior

It is widely argued that there are benefits associated with and attributable to utility demand-side programs beyond direct energy savings.  There are three classes of these non-energy benefits (NEBs) based on “beneficiary” or “perspective” (Skumatz et al. 2009). Participant NEBs accrue to the program participants (such as reduced building operating costs, increased value, comfort, health, and safety). Utility NEBs are realized as indirect costs or savings to the utility (such as bill payment improvements, infrastructure savings, etc.). Societal NEBs represent indirect program effects beyond those realized by ratepayers/utility or participants, and they accrue to society at large (such as job creation, tax receipts growth, labor productivity, housing value, neighborhood stability, and reduced emissions and other environmental benefits).  This paper considers various methods for addressing NEBs in the CPUC’s cost-effectiveness tests for demand-side resources.

Lessons Learned and Next Steps in Energy Efficiency Measurement and Attribution: Energy Savings, Net to Gross, Non-Energy Benefits, and Persistence of Energy Efficiency Behavior

Date Published: November 1, 2009     Document Type: Report, White paper
Sectors: Behavior, Research, Evaluation, & Behavior

This white paper examines four topics addressing evaluation, measurement, and attribution of direct and indirect effects to energy efficiency and behavioral programs:

  • Estimates of program savings (gross);
  • Net savings derivation through free ridership / net to gross analyses;
  • Indirect non-energy benefits / impacts (e.g., comfort, convenience, emissions, jobs); and
  • Persistence of savings.

Evaluation and attribution methods have reached a point that they must evolve in order to provide credible results for the next generation of programs. Two primary factors have complicated the methodologies that have been applied to energy efficiency programs:

  • Transition to more behavioral, outreach and other non-measure-based programs (education, advertising), making it especially hard to “count” impacts, and
  • Increased chatter in the marketplace, in which consumers may be influenced by any number of utility programs by the host/territorial utility (the “portfolio”) as well as influences from outside the territorial utility (national, neighboring programs, movies/media).