Changes in regulatory requirements, market structures, and operational technologies have introduced complexities that traditional ratemaking approaches can’t address. Poorly designed rates lead to...
Setting the stage for conservation.
the contentious situation caused California to revise its approach to performance incentives, which still is underway. This also has implications for whether Wall Street views utility energy efficiency spending as an investment with a return, or simply as an expenditure with no return. In California, where utilities are spending about $1 billion a year on efficiency, this matters.
As part of the SEE Action network, the industry will be working with DOE, as well as other stakeholders, including regional energy efficiency alliances in the Northeast, the Midwest, and the Northwest, to create and define a standard process and guidelines for EM&V. These include a provision to ensure that EM&V is forward looking or prospective. That is, once savings for a measure or measures are agreed upon for a particular program or portfolio timeframe, those savings amounts shouldn’t be revisited or modified during that period. This work is urgent and the goal is to have EM&V guidelines in place by the end of 2010.
The industry also is encouraging DOE to play a major role in educating opinion leaders––energy-efficiency advocacy organizations, regulators, consumer advocates, legislators, and governors––as well as consumers about the important role that electric utilities are playing in achieving national energy-efficiency goals.
According to a recent Edison Electric Institute poll (December 2009), 59 percent of consumers look to their electric utility for information on how to use electricity efficiently. This is more than local government, state government, federal government, and home-improvement contractors combined. Increasing the number of consumers participating in electric utility efficiency programs will benefit not only consumers, but also the states and the federal government in achieving their efficiency goals.
Key aspects in developing a national energy-efficiency outreach campaign will be for DOE to work closely with EPA to take advantage of the lessons learned in promoting ENERGY STAR, and to work with the Federal Energy Regulatory Commission (FERC) to build upon FERC’s work in promoting demand response.
Technology can help consumers become more energy efficient, and the industry’s investment in the smart grid, and smart meters in particular, marks a major step toward this goal. Today, smart-meter installation programs are underway in 33 states, with more than 15,000 smart meters being installed every day. By 2019, the federal government estimates that more than 58 million smart meters will be in use, constituting over half of U.S. households. The Edison Foundation’s Institute for Electric Efficiency predicts deployment will occur much faster, and that at least 60 million meters will be installed in U.S. households by 2015. Beyond the operational benefits that smart meters offer, such as automated meter reading, automated outage detection, and remote connects and disconnects, smart meters enable consumers to closely monitor and manage their electricity use with in-home devices and web portals.
Several U.S. studies show that consumers reduce their usage by about 3 percent, based on just giving them access to their usage data and tips on how to save energy. With automation technologies, consumers reduce usage even more. For residential customers in the United States, a 5- to 10-percent reduction in consumption