Agenda

1. Quantifying the Impacts of Energy Efficiency (and Other DERs)National Efficiency Screening ProjectApril 25, 2019

2. Agenda Introduction (Julie Michals – Director Clean Energy Valuation, E4TheFuture) Overview of CE Testing and Analysis, and Key Resources (Tim Woolf – Senior Vice President, Synapse Energy Economics) How to Quantify Certain EE Benefits and State Examples (Denise Mulholland – Senior Program Manager, US EPA and Jim Barrett – Visiting Fellow, ACEEE)  BCA Models and Accounting for Various EE Impacts (Lauren Gage – Project Director, Apex Analytics)

3. First, a couple questions…

4. Overview of CE Testing and Analysis, and Key Resources (Tim Woolf –Senior Vice President, Synapse Energy Economics)

5. The National Standard Practice Manual A Key Excerpts and an Overview of the Database of State Efficiency Screening Practices April 25, 2019 Tim WoolfSynapse Energy Economics Webinar Presentation

6. Tim Woolf - Synapse Energy Economics Key Elements of the National Standard Practice Manual Available for download here.

7. National Standard Practice Manual Developing the Primary Cost-Effectiveness Test Using the Resource Value Framework Tim Woolf - Synapse Energy Economics

8. NSPM Principles Tim Woolf - Synapse Energy Economics Recognize that energy efficiency is a resource. Account for applicable policy goals. Account for all relevant costs & benefits (based on applicable policies), even if impacts are hard to quantify. Ensure symmetry across all relevant costs and benefits. Conduct a forward-looking, long-term analysis that captures incremental impacts of energy efficiency. Ensure transparency in presenting the analysis and the results.

9. NSPM: Cost-Effectiveness Perspectives Public utility commissions Legislators Muni/Coop advisory boards Public power authorities Other decision-makers Tim Woolf - Synapse Energy Economics California Standard Practice Manual (CA SPM) – test perspectives are used to define the scope of impacts to include in the “traditional” cost-effectiveness tests NPSM introduces the “regulatory” perspective, which is guided by the jurisdiction’s energy and other applicable policy goals

10. Examples of Utility System Impacts Tim Woolf - Synapse Energy Economics

11. Examples of Non-Utility System Impacts Tim Woolf - Synapse Energy Economics

12. Methodologies to Account for All Relevant Impacts Tim Woolf - Synapse Energy Economics

13. Tim Woolf - Synapse Energy Economics Overview of the Database of State Efficiency Screening Practices (DSESP) Available for download here.

14. DSESP Background and Purpose Tim Woolf - Synapse Energy Economics Background Part of the National Efficiency Screening Project (NESP), which produced the National Standard Practice Manual (NSPM) Is a living database, updated as state practices change Purpose To provide information regarding state screening practices for ratepayer-funded electric efficiency programs States can use the DSESP to learn from other state’s practices, and readily access policies, processes, and studies.

15. DSESP Scope Tim Woolf - Synapse Energy Economics • The DSESP is still under construction • It currently includes 30 states • It will include all states by the end of 2019 • The DSESP follows the structure of the NSPM, including state-by-state information regarding: • Which cost-effectiveness tests are used; primary and secondary • Key planning parameters; e.g., discount rate, study period • Which utility system impacts are accounted for • Which non-utility system impacts accounted for • The DSESP can be easily sorted by users • By state, by test, by planning parameter, etc. • The DSESP Includes sources for every data point

16. Summary of State Data Tim Woolf - Synapse Energy Economics

17. View a Single State Tim Woolf - Synapse Energy Economics

18. Alternate summary views • Alternate view tabs: • Test and application • Utility system impacts • Non-utility system impacts • Best for users interested in how impacts compare across states • Easy to filter • The user can pick which question they want answered • Which categories of impacts are included in the primary test? • Yes/No • Which types of impacts are included in the primary test? • Defines what is included in each category • What method is used to calculate the impacts? • Monetized, proxy, alternate thresholds, etc. Tim Woolf - Synapse Energy Economics

19. Example 1: Test and Application Tim Woolf - Synapse Energy Economics

20. Example 2: Non-Utility System Impacts Tim Woolf - Synapse Energy Economics Question: Which states with the TRC test as the primary test include participant health and safety impacts?

21. Graphic Presentation: which test is used? Tim Woolf - Synapse Energy Economics

22. DSESP Guidance Documents • Documents currently in the DSESP • New documents added with quarterly updates (e.g., NARUC’s new document reviewing methods for analyzing the resilience value of DER) Tim Woolf - Synapse Energy Economics

23. Contact Information Tim Woolf - Synapse Energy Economics Synapse Energy Economics is a research and consulting firm specializing in energy, economic, and environmental topics. Since its inception in 1996, Synapse has been a leader in providing rigorous technical and policy analysis of the electric power and natural gas sectors for public interest and government clients. Tim WoolfVice-President, Synapse Energy Economics617-453-7031twoolf@synapse-energy.com www.synapse-energy.com

24. How to Quantify Certain EE Benefits and State Examples (Denise Mulholland – Senior Program Manager, US EPA and Jim Barrett – Visiting Fellow, ACEEE) 

25. Quantifying the Multiple Benefits of Energy Efficiency and Renewable Energy: A Guide for State and Local Governments Denise Mulholland, U.S. EPA April 25, 2019

26. EPA’s State and Local Energy and Environment Program Help S&Ls meet their CAA air quality goals Support decision-makers Provide tools and information resources about EE, RE, and emerging strategies Help S&Ls meet their emissions, energy, economic, and public health goals Benefit environment and public health Save time and resources

27. Quantifying the Multiple Benefits of Energy Efficiency and Renewable Energy (EE/RE): A Guide for State and Local Governments • Part One: What, Why and When to Quantify • Part Two: How to Quantify • Includes many figures and tables that: • clearly present methods, tools, and steps to quantify benefits, • make it easier to understand the process, and/or • help analysts compare across methods and tools.

28. Part ONE: What Are the Benefits of EE/RE?

29. Part ONE: When to and Why Quantify Multiple Benefits? Set or revisit goals Design and compare options to meet goals • Quantify multiple benefits of option(s) under consideration to identify those with greatest potential benefits Policy Planning and Evaluation Process Evaluate impacts relative to goals • Quantify multiple benefits achieved to fully evaluate impacts of projects, policies, or programs implemented • Promote benefits Implement projects, policies, or programs

30. Part TWO: How to Quantify Multiple Benefits? Determine Scope of and Strategy for the Analysis Key Considerations • Identifying the purpose, priorities, and constraints • Understanding the characterization of analytic methods • Mapping out the strategy for the analysis Step1 Determine Direct Electricity Impacts Step2 Quantify the Multiple Benefits From Direct Electricity Impacts Electricity System Benefits • Primary electricity system benefits • Secondary electricity system benefits Economic Benefits • Direct economic benefits • Indirect economic benefits Emissions and Health Benefits • Air pollutant, GHG emissions benefits • Air quality benefits • Human health benefits Step3 Use Benefits Information to Support Informed Decision-Making Step4 See Part Two, Chapter 1

31. What Types of Methods Are Available? • Typically, there are a range of methods available to quantify benefits and impacts • Basic methods (e.g., spreadsheet analyses, trend extrapolations) • Based on relatively simple formulations, such as the use of activity data (e.g., changes in generation levels) and factors (e.g., emission factors). • Intermediate methods • Require some technical expertise but allow analysts flexibility to make adjustments and reflect different energy efficiency and renewable energy assumptions and savings. • Sophisticated methods • Characterized by extensive underlying data and relatively complex formulations that represent the fundamental engineering and economic decision-making (e.g., power sector system dispatch or capacity expansion modeling), or complex physical processes (such as in air dispersion modeling). See Part Two, Chapter 1

32. Key Considerations When Choosing a Method for Quantifying Impacts • What benefits do you care about and what methods are available to estimate them? • What level of rigor is needed? • e.g., screening-level vs. regulatory impact analysis • What is the time period of the analysis (e.g. short term vs long term, prospective vs retrospective)? • What are the data requirements? What data is available? • What financial costs or technical expertise are required? What’s available? See Part Two, Chapter 1

33. Map Out The Benefits to Quantify Each Chapter provides: • Step by step instructions • Range of basic to sophisticated approaches • Key considerations • Case Studies • List of available tools, data and resources

34. Estimate Direct Electricity Impacts • Analysts can adapt existing studies of similar EE or RE programs to their conditions, use data from EE/RE potential studies or conduct new analyses • Key assumptions to consider (see page 2-23): • Program period • Program target • Anticipated compliance or penetration rate • Useful life and persistence of savings • Annual degradation factor • T&D loss • Adjustment factor • Non-program effects • Funding and program administration • EE/RE Potential Step 1 Develop a BAU Energy Forecast Step 2 Estimate Potential Direct Electricity Impacts Step 3 Create an Alternative Policy Forecast See Part Two, Chapter 2

35. Compare Emissions Quantification Method(s)

36. Tables in the Guide help you compare methods in more detail

37. Use Flowcharts and Figures in the Guide to Navigate the Process Across Each of the Benefits

38. Carbon Reductions and Health CoBenefits from U.S. Residential Energy Efficiency Measures, Levy et al, 2016 Explore Case Studies

39. Learn About Available Tools & Data Resources

41. For More Information About EPA’s Program, Tools, and Resources • Download the Guide from https://www.epa.gov/statelocalenergy/quantifying-multiple-benefits-energy-efficiency-and-renewable-energy-guide-state • Join our upcoming webinar (#2 of 3) – Quantifying the Health Benefits of Energy Efficiency and Renewables • May 16, 2019: 2:00pm - 3:30pm Eastern • https://www.epa.gov/statelocalenergy/state-and-local-webinar-series • Visit the EPA State and Local Energy and Environment Program website at https://www.epa.gov/statelocalenergy • Contact me at Mulholland.Denise@epa.gov THANK YOU!!!

42. Measuring the Economic Development Benefits of Energy Efficiency James P. Barrett, Ph.D. Visiting Fellow American Council for an Energy-Efficient Economy

43. The American Council for an Energy-Efficient Economy (ACEEE) • ACEEE is a 501(c)(3) nonprofit that acts as a catalyst to advance energy efficiency policies, programs, technologies, investments, & behaviors • 50+ staff; headquarters in Washington, D.C. • Focus on end-use efficiency in industry, buildings, & transportation • Other research in economic analysis; behavior; energy efficiency programs; & national, state, & local policy • Funding: • Foundation Grants (52%) • Contract Work & Gov’t. Grants (20%) • Conferences & Publications (20%) • Contributions & Other (8%) • www.aceee.org/@ACEEEdc

44. ACEEE State Policy Toolkit: Guidance on Measuring the Economic Development Benefits of Energy Efficiency Available at: https://aceee.org/topic-brief/economic-development-state-ee-toolkit

45. Implementation Phase

46. Savings Phase

47. Two Main Questions: • What Factors Aren’t Already Included • How to Include Them

48. Methods for Assessing Economic Impacts Adders Pros: Transparent, Simple, Low Cost Cons: Little Analytical Underpinnings Multipliers Pros: Transparent, Simple, Low Cost to Use Cons: Requires Analysis to Determine Values Input-Output Models Pros: Relatively Transparent and Simple Less Expensive than Other Model Types Cons: Require Some Resources and Expertise Static

49. Methods for Assessing Economic Impacts Econometric Models Pros: Dynamic Cons: More Expensive and Complex to Use CGE Models Pros: Dynamic, Full Internal Consistency Cons: Expensive and Complex to Use Mainly Unavailable at Local Level

50. BCA Models and Accounting for Various EE Impacts (Lauren Gage – Project Director, Apex Analytics)