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NEB Review & Next Steps. April 30, 2013. Objectives for Today’s Meeting. Summarize where we are now Quick Review - how our current NEB values compare with the range of values provided in SERA report Recommendations for updating Discussion: What roll should NEBs play in CE?
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NEB Review& Next Steps April 30, 2013
Objectives for Today’s Meeting • Summarize where we are now • Quick Review - how our current NEB values compare with the range of values provided in SERA report • Recommendations for updating • Discussion: What roll should NEBs play in CE? • If we Split Equity and Non-Equity Programs or in Whole House evaluation do NEBs play a role?? • If we decide to use an NEB factor how should it be estimated?
Where We Are Now • Two major NEB Studies have been conducted by the State over the past several years. • Even though these studies were conducted many years apart, they resulted in very little change in values and program impact. • We have learned that: • NEBs can be extremely difficult and costly to Measure taking resources away from program activities. • Accuracy of the many NEBs estimates is questionable and controversial and very difficult to use effectively in modeling. • No new significant NEBs have been discovered.
NEB Values From SERA Study- Participant Values are per household, per year.
NEB Values - Utility Values are per household, per year
NEBs Previously Recommended to be Eliminated From Cost Effectiveness Tests • Utility • Fewer Shutoffs • Fewer Reconnects • Fewer Notices • Reduction in Emergency Gas Service Calls • Participant • Fewer Shutoffs • Fewer Calls to Utility • Fewer Reconnects • Moving Costs
NEBs Recommended to Continue to be Included in Cost Effectiveness Tests • Utility • Reduced arrearages • Fewer customer calls • CARE subsidy avoided • Participant • Water savings • Property values • Fewer fires • Fewer illnesses • Comfort
Which of the Recommended NEBs Are Easy or Difficult to Measure • Participant • Water savings: • Easily measured. Methodology required the average Gallons per measure saved and an average water rate. • Property values: • Easily measured, Based upon the value of “Minor Home Repair” or other increase in property value ( if permanent). • Fewer fires: • Very difficult to measure. Currently based on many assumptions with no back-up. • Fewer illnesses: • Difficult to measure. Based on an average number of sick days away from work. No reliable source. • Comfort: • Difficult to Measure. No reliable source or methodology.
Which of the Recommended NEBs Are Easy or Difficult to Measure (Continued) • Utility • Reduced Carrying Costs on Arrearages: • Difficult to measure accurately. Methodology relies on utility data but also an assumption concerning the % of program induced reductions in Arrearages. No reliable data available. • Fewer Customer Calls: • Difficult to measure Accurately. Methodology relies on utility data but also an assumption concerning the % of program induced reduction in Calls. No reliable data available. • Reduced Rate Subsidy: • Easily measured with Utility data.
NEBs Recommended to Be Included in a Factor for CE Tests. • Utility • Reduced arrearages • Fewer customer calls • Participant • Fewer fires • Fewer illnesses • Comfort
RECOMMENDATIONS FROM THE WHITE PAPER 1. Continue to use the same model and NEB values that have been used since 2003 with no changes or only minor updates where feasible.2. Continue as above with the addition of sensitivity analysis on key NEBs, such as “comfort and noise,” whose values are relatively high.3. Fund a study that will provide updated values for the NEB calculations that are currently used. The study would likely require extensive customer surveys and analysis.4. Calculate only certain NEBs which are substantial and easy to calculate and use an adder to estimate any remaining NEBs.5. Use an adder to estimate all NEBs (this was the most common methodology found in the SERA study literature search).
RECOMMENDATION FROM COMMITTEE Option 4: Calculate only certain NEBs which are substantial and easy to calculate and use an adder to estimate any remaining NEBs.NEBS to be Estimated: 1) Water Savings 2) Property Values 3) CARE Subsidy AvoidedNEBS to be included in a Factor 1) Fewer Illnesses 2) Fewer Fires 3) Comfort and Noise 4) Others?Which NEBs would be used would depend upon which CE test is being estimated
Discussion: What Roll Should NEBs play in CE? 1) If we Split Equity (Non-Resource) and Resource Programs, is there a need for NEBs? 2) If we measure savings at the whole house level is there a need for NEBs?
Discussion: Factor Recommendations 1. Adapt a Factor based on a new study or literature review of NEBs used in other areas.2. Base the factor on historical values calculated in previous CE analysis.
