Cost effectiveness background for the energy savings assistance program
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Cost Effectiveness Background for the Energy Savings Assistance Program. ESAP Workshop 3 October 20, 2011 SDG&E / SoCalGas. Overview. Regulatory background The CE tests currently used for the ESA Program The models used to run the tests Non-energy benefits The inputs required

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Cost effectiveness background for the energy savings assistance program

Cost Effectiveness Background for the Energy Savings Assistance Program

ESAP Workshop 3

October 20, 2011

SDG&E / SoCalGas


Overview
Overview Assistance Program

  • Regulatory background

  • The CE tests currently used for the ESA Program

  • The models used to run the tests

  • Non-energy benefits

  • The inputs required

  • How the results are used


Liee cost effectiveness background
LIEE Cost Effectiveness Background Assistance Program

  • 2000: In response to D.00-09-036, a technical subcommittee is formed to develop a cost effectiveness test which would include non-energy benefits.

  • 2001: In response to D.01-03-028, the Low Income Public Purpose Test (LIPPT) model is developed by TekMRKT Works, Skumatz Economic Research, Inc. and Megdal Associates.

  • 2002: In response to D.01-12-020, the LIPPT is modified to evaluate the LIEE program and individual measures.

  • 2003: In response to D.02-08-034, IOUs use the modified model to test their programs


Liee cost effectiveness background1
LIEE Cost Effectiveness Background Assistance Program

  • 2004: ACR directed the IOUs to institute a process for considering measures for the PY2006 program.

  • 2005: proposals for new measures are solicited and assessed using the cost effectiveness criteria approved by the Commission.

  • 2008: In D.08-11-031, the Commission established new cost effectiveness criteria for determining which measures could be in the program


The cost effectiveness tests
The Cost Effectiveness Tests Assistance Program

  • Currently the IOUs report 3 tests:

    • The modified participant test (MPT)

    • The utility cost test (UCT)

    • The total resource cost test (TRC)

  • Only the MPT and UCT are used to determine which measures are included in the program

  • Only the MPT and UCT include non-energy benefits (NEBs)


The models
The Models Assistance Program

  • A modified version of the LIPPT model (developed in 2001) is used to estimate the NEBs

    • The model was developed in 2001

    • The model allows input of basic assumptions regarding the NEBs

    • NEBs are estimated on a per household basis and then allocated across measures based on their share of energy savings

  • The E3 Calculator for Energy Efficiency is used to estimate the avoided costs for the UTC and the TRC


Nebs included in the tests
NEBs Included in the Tests Assistance Program

Utility:

  • Reduced arrearage cost

  • Reduced bad debt written off

  • Fewer shutoffs

  • Fewer reconnects

  • Fewer notices

  • Fewer customer calls

  • Fewer emergency gas svc calls

  • CARE subsidy avoided

Participant:

  • Water/sewer savings

  • Fewer shutoffs

  • Fewer calls to utility

  • Fewer reconnects

  • Property Value benefits

  • Fewer fires

  • Moving costs / mobility

  • Fewer illnesses and lost days from work/school

  • Net benefits for comfort & noise

  • Net benefits for additional hardship


Neb study
NEB Study Assistance Program

  • A study was conducted in 2010 to look at the status of NEBs, research what other states are using, and report the value range

    • The report provided information on NEBs reported in other states/programs including a table of reported values

    • NEBs are very difficult to quantify and no precise methods are being used.

    • Many of the other values reported are a % of energy savings

    • Any additional studies and customer surveys would cost much more than originally budgeted


Cost effectiveness background for the energy savings assistance program

The report is on the LIOB website: Assistance Program

http://www.liob.org

Look under “Reports”

May12, 2010

Non-Energy Benefits: Status, Findings, Next Steps, and Implications for Low Income Program Analyses in California

Skumatz Economic Research Assoc

and The Cadmus Group


How the ce results are used
How the CE Results are Used Assistance Program

  • Currently the IOUs report the test results for the portfolio and for each measure by fuel type, housing type and climate zone (Tables A-5, A-6, A-7)

  • Continuing program measures are required to have a result of 0.25 for either the MPT or UCT

  • New measures are required to have a result of 0.25 for both the MPT and UCT

  • In cases where the measure does not pass but does provide health or safety benefits, measures may be kept regardless of the test result (example: furnaces and hot water heaters)