National action plan for energy efficiency : a plan developed by more than 50 leading organizations in pursuit of energy savings and environmental benefits through electric and natural gas energy efficiency

2006·14.2 MB·English

by  United States. Department of Energy

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National Action Plan
for Energy Efficiency
A PLAN DEVELOPED BY MORE THAN 50 LEADING
ORGANIZATIONS IN PURSUIT OF ENERGY SAVINGS
AND ENVIRONMENTAL BENEFITS THROUGH
ELECTRIC AND NATURAL GAS ENERGY EFFICIENCY
JULY 2006
The goal is to create a sustainable,
aggressive national commitment
to energy efficiency through gas and
electric utilities, utility regulators,
and partner organizations.
Improving energy efficiency in our homes, businesses, schools, governments, and indus¬
tries—which consume more than 70 percent of the natural gas and electricity used in the
country—is one of the most constructive, cost-effective ways to address the
challenges of high energy prices, energy security and independence, air pollution, and
global climate change.
The U.S. Department of Energy and U.S. Environmental Protection Agency facilitate the
work of the Leadership Group and the National Action Plan for Energy Efficiency.
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Acknowledgements
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The National Action Plan for Energy Efficiency Report discusses policy, planning, and program issues based on a formal
work plan developed during the December 2005 and March 2006 Leadership Group meetings. The Leadership Group is
led by co-chairs Diane Munns (Member of the Iowa Utilities Board and President of the National Association of Regulatory
Utility Commissioners) and Jim Rogers (President and Chief Executive Officer of Duke Energy). A full list of Leadership
Group members is provided in both the Executive Summary (Table ES-1) and Chapter 1 (Table 1-2) of this report. Rich
Scheer of Energetics Inc. facilitated the Leadership Group discussions during both Leadership Group meetings.
Expert consultants, funded by the U.S. Department of Energy (DOE) and the U.S. Environmental Protection Agency
(EPA), drafted many chapters of the Action Plan Report. These consultants included:
• Regulatory Assistance Project: Chapter 2 and Appendix A
•Energy and Environmental Economics, Inc.: Chapters 3 through 5, Energy Efficiency Benefits Calculator,
and Appendix B
•KEMA: Chapter 6
In addition. Rich Sedano of the Regulatory Assistance Project and Alison Silverstein of Alison Silverstein Consulting
provided their expertise during review and editing of the overall report.
DOE and EPA facilitated the work of the Leadership Group and this report, including Larry Mansueti with DOE's Office
of Electricity Delivery and Energy Reliability, Mark Ginsberg with DOE's Office of Energy Efficiency and Renewable
Energy, and Kathleen Hogan, Stacy Angel, Maureen McNamara, Katrina Pielli, and Tom Kerr with EPA's Climate
Protection Partnership Division.
Eastern Research Group, Inc. provided technical review, copyediting, graphics, and production services.
To create a sustainable, aggressive national commitment to energy efficiency i
List of Figures
Figure ES-1. National Action Plan for Energy Efficiency Recommendations.ES-2
Figure ES-2. National Action Plan for Energy Efficiency Recommendations & Options.ES-8
Figure 1-1. Energy Efficiency Spending Has Declined.1-5
Figure 1-2. Energy Efficiency Has Been a Resource in the Pacific Northwest for the Past Two Decades.... 1-7
Figure 1-3. National Action Plan for Energy Efficiency Report Addresses Actions to Encourage
Greater Energy Efficiency.1-11
Figure 3-1. Energy-Efficiency Supply Curve - Potential in 2011.3-2
Figure 3-2. California Efficiency Structure Overview.3-10
Figure 3-3. California Investor-Owned Utility Process.3-11
Figure 3-4. BPA Transmission Planning Process.3-12
Figure 3-5. New York Efficiency Structure Overview.3-13
Figure 4-1. Comparison of Deferral Length with Low- and High-Growth.4-10
Figure 6-1. Impacts of the Northeast Lighting and Appliance Initiative.6-33
Figure 7-1. National Action Plan for Energy Efficiency Recommendations.7-1
Figure 7-2. National Action Plan for Energy Efficiency Report Addresses Actions to Encourage
Greater Energy Efficiency.7-2
ii National Action Plan for Energy Efficiency
List of Tables
■■■■■
Table ES-1. Members of the National Action Plan for Energy Efficiency.ES-10
Table 1-1. Summary of Benefits for National Energy Efficiency Efforts.1-8
Table 1-2. Members of the National Action Plan for Energy Efficiency.1-16
Table 2-1. Options to Mitigate the Throughput Incentive: Pros and Cons.2-6
Table 2-2. Examples of Decoupling.2-12
Table 2-3. Examples of Incentives for Energy Efficiency Investments.2-15
Table 3-1. Levelized Costs and Benefits From Four Regions.3-9
Table 3-2. Incorporation of Energy Efficiency in California's Investor-Owned Utilities'
Planning Processes.3-11
Table 3-3. Incorporation of Energy Efficiency in BPA's Planning Processes.3-13
Table 3-4. Incorporation of Energy Efficiency in NYSERDA's Planning Processes.3-14
Table 3-5. Incorporation of Energy Efficiency in Minnesota's Planning Processes.3-15
Table 3-6. Incorporation of Energy Efficiency in Texas' Planning Processes.3-16
Table 3-7. Incorporation of Energy Efficiency in PacifiCorp's Planning Processes.3-17
Table 4-1. Summary of Main Assumptions and Results for Each Business Case Analyzed.4-3
Table 4-2. High- and Low-Growth Results: Electric Utility.4-6
Table 4-3. High- and Low-Growth Results: Natural Gas Utility.4-8
Table 4-4. Power Plant Deferral Results.4-11
Table 4-5. Vertically Integrated and Delivery Company Results.4-13
Table 4-6. Publicly- and Cooperatively-Owned Utility Results.4-15
Table 5-1. Partial List of Utilities With Inclining Tier Residential Rates.5-6
Table 5-2. Pros and Cons of Rate Design Forms.5-9
Table 5-3. Conditions That Assist Success.5-11
Table 6-1. Overview of Energy Efficiency Programs.6-4
Table 6-2. Efficiency Measures of Natural Gas Savings Programs.6-6
Table 6-3. Efficiency Measures of Electric and Combination Programs.6-8
Table 6-4. Achievable Energy Efficiency Potential From Recent Studies.6-16
Table 6-5. NYSERDA 2004 Portfolio.6-20
To create a sustainable, aggressive national commitment to energy efficiency iii
List Of Tables
(continued)
Table 6-6. Nevada Resource Planning Programs.6-21
Table 6-7. Overview of Cost-Effectiveness Tests.6-23
Table 6-8. Research & Development (R&D) Activities of Select Organizations.6-25
Table 6-9. Emerging Technologies for Programs. 6-27
Table 6-10. Key Stakeholders, Barriers, and Program Strategies by Customer Segment.6-31
Table 6-11. Types of Financial Incentives.6-40
Table 6-12. Sample Progression of Program Designs.6-42
Table 6-13. Program Examples for Key Customer Segments.6-44
Table 6-14. Evaluation Approaches.6-46
Table 7-1. Leadership Group Recommendations and Options to Consider, by Chapter.7-3
lv National Action Plan for Energy Efficiency
List of Acronyms
A F
aMW average megawatts FERC Federal Energy Regulatory Commission
B
G
Bcf billion cubic feet
GWh gigawatt-hour (1,000,000 kWh)
BOMA Building Owners & Managers
Association
H
BPA Bonneville Power Administration
HERS Home Energy Rating System
c
HVAC heating, ventilation, and air
conditioning
C/I commercial and industrial
CEC California Energy Commission i
co2
carbon dioxide
CPP critical peak pricing IOU investor-owned utility
CPUC California Public Utility Commission IPMVP International Performance
Measurement and Verification
Protocol
D
IRP integrated resource plan
ISO independent system operator
DEER Database for Energy Efficiency
ISO-NE ISO New England
Resources
DOE U.S. Department of Energy
K
DSM demand-side management
kWh kilowatt-hour (3,412 British thermal units)
E
L
EE energy efficiency
EEPS energy efficiency portfolio standard
LIHEAP Low-Income Home Energy Assistance
EERS energy efficiency resource standard Program
EPA U.S. Environmental Protection Agency LIPA Long Island Power Authority
EPRI Electric Power Research Institute
ESCO energy services company
ETO Energy Trust of Oregon
To create a sustainable, aggressive national commitment to energy efficiency v
List of Acronyms
(continued)
M R
M&V measurement and verification R&D research and development
Mcf one thousand cubic feet RARP Residential Appliance Recycling
Program
MMBtu million British thermal units
REAP Residential Energy Affordability
MW megawatt (1,000,000 watts)
Partnership Program
MWh megawatt-hour (1,000 kWh)
RFP request for proposals
RGGI Regional Greenhouse Gas Initiative
N
RIM rate impact measure
ROE return on equity
NEEP Northeast Energy Efficiency Partnerships
RPC revenue per customer
NERC North American Electric Reliability
Council RTO regional transmission organization
NOx nitrogen oxides RTP real-time pricing
NPV net present value
s
NSPC Non-Residential Standard
Performance Contract .
NWPCC Northwest Power and Conservation SBC system benefits charge
Council
SCE Southern California Edison
NYSERDA New York State Energy Research and
SMUD Sacramento Municipal Utility District
Development Authority
so2
sulfur dioxide
p
... '' ■ ■—I',—. T
PBL Power Business Line
TOU time of use
PG&E Pacific Gas & Electric
TRC total resource cost
PIER Public Interest Energy Research
PSE Puget Sound Energy
V
PUCT Public Utility Commission of Texas
PURPA Public Utility Regulatory Policies Act
VOLL value of lost load
VOS value of service
w
WAP Weatherization Assistance Program
vi National Action Plan for Energy Efficiency
Table of Contents
Acknowledgements.
List of Figures.
List of Tables. ....iii
List of Acronyms. .v
Executive Summary. ES-1
Chapter 1: Introduction and Background. ..1-1
Chapter 2: Utility Ratemaking & Revenue Requirements. ..2-1
Chapter 3: Energy Resource Planning Processes. ..3-1
Chapter 4: Business Case for Energy Efficiency. ..4-1
Chapter 5: Rate Design. ..5-1
Chapter 6: Energy Efficiency Program Best Practices. ..6-1
Chapter 7: Report Summary. ..7-1
Appendix A: Additional Guidance on Removing the Throughput Incentive .A-1
Appendix B: Business Case Details. ..B-1
To create a sustainable, aggressive national commitment to energy efficiency vii