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Energy Division Workshop: LTPP Planning Standards (Part 3) Energy Efficiency

Energy Division Workshop: LTPP Planning Standards (Part 3) Energy Efficiency. June 25, 2010 Workshop R.10-05-006, Tracks 1 & 2. Workshop Objectives. Help participants understand the purpose of the Planning Standards (Part 3) Facilitate helpful comments on Staff Proposal July 2

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Energy Division Workshop: LTPP Planning Standards (Part 3) Energy Efficiency

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  1. Energy Division Workshop:LTPP Planning Standards (Part 3)Energy Efficiency June 25, 2010 Workshop R.10-05-006, Tracks 1 & 2

  2. Workshop Objectives • Help participants understand the purpose of the Planning Standards (Part 3) • Facilitate helpful comments on Staff Proposal • July 2 • July 9, Replies • Final Workshop in a series of 3 • Planning Standards (Part 1) & Rulebook on June 11 • Planning Standards (Part 2) RPS on June 18

  3. Helpful Links • 2009 IEPR (3.2mb PDF) • CED 2009 (2.8mb PDF) • CEC Incremental EE Report (1.7mb PDF) • Attachment A: Technical Report (2.7mb PDF) • Presentations • CPUC EE Goals Decisions • D.08-07-047 – 2008 Goals • D.09-05-037 – Interim Policy Decision on 2009-2011 program cycle • D.09-09-047 – EE Portfolio Decision for 2010-2012 • 2006-2008 Draft EE Evaluation Report

  4. Agenda • Scope • Planning Standards • EE Background • 2006-2008 Draft EE Evaluation Report • Policy Issues • Uncertainties • Questions • Next Steps

  5. Scope • EE assumptions and values for procurement purposes • EE goals, RRIM, and EE assumptions and values for other purposes is not in scope

  6. Planning Standards

  7. Planning Standards Goals • For a core set of analyses • Internally consistent system plans • Easily comparable • To produce for the Scoping Memo • Finalized planning standards • Finalized L&R Table Templates • Full descriptions of required scenarios

  8. Guiding Principles • Assumptions should • Take a realistic view of policy-driven resource achievements to ensure electric reliability and track progress toward resource policy goals • Reflect behavior of market participants

  9. Guiding Principles • Resource Plans should • Be informed by an open and transparent process • Consider whether significant new investments in transmission and flexible resources would be needed to reliably integrate and deliver new resources to loads

  10. Guiding Principles • Resource scenarios should provide useful information • Resource portfolios should be substantially unique from each other

  11. Common AssumptionsSystem & Bundled • Load Forecast • Energy Efficiency • Demand Response • Peak Capacity Value • Planning Reserve Margin

  12. EE Background

  13. Definitions - Background • Committed EE • Embedded utility EE program savings in the most recent IEPR base case load forecast (currently pre-2013) • Uncommitted EE • Levels of EE savings that are incremental to the most recent IEPR base case load forecast (currently 2013-2020) • Covered in today’s (June 25, 2010) workshop on Planning Standards (Part 3) • Data Sources Include • CPUC EE Goals (D.08-07-047) • CEC Integrated Energy Policy Report 2009 • California Energy Demand 2009 • CEC Committee Report on Incremental Impacts of Energy Efficiency • Itron Consultant Report on Incremental Impacts of Energy Efficiency • Draft 2006-2008 EE Evaluation Report

  14. Definitions - Background Derived from the CEC Incremental EE Report (See Attachment 1, footnote 10)

  15. Background • PU Code § 454.5 – Procurement plans must show that they “will first meet its unmet resource needs through all available EE resources … that are cost effective, reliable, and feasible” • EE is also first in the Energy Action Plan loading order

  16. Background Example of a “managed forecast”

  17. Background • In response to an ED request, the CEC created the Demand Forecast Energy Efficiency Quantification Project • Met between December 2008 and April 2010 • Results helped reduce methodological uncertainty • Raised new questions of overall uncertainty in EE forecasts

  18. Timing - Background • CPUC and CEC adopt specific new utility programs and non-utility standards every three years • Both processed are guided by longer-term policies, goals, and/or targets • Similarly, procurement authorizations are made 5-7 years forward with specific additions firming up over time

  19. Timing - Background California Energy Demand 2009 (from 2009 IEPR Cycle) 2009 IEPR Inc. Unc. EE 2011 IEPR 2008 LTPP 2010 LTPP Procurement authorization from 2010 LTPP Previous EE - “Committed” 2010 – 2012 EE Cycle - “Committed” 2013 – 2020 EE - “Uncommitted”

  20. LTPP - Background • Commission, in the 2006 LTPP, directed that the LTPP must consider “EE savings from committed and uncommitted programs” • EE Goals decision required the IOUs to “use 100% of interim Total Market Gross goals for 2012-2020 in future LTPP proceedings”

  21. LTPP - Background • 2010 LTPP OIR provided that the Commission “may address or reassess the Energy Efficiency and Demand Response assumptions utilized in determining future need” but would not consider new EE goals in this proceeding

  22. LTPP - Background • Planning Standards Part 3 ruling reiterates that “it is the Commission’s policy to use one hundred percent of TMG as the base case scenario, and parties bear the burden of proof to demonstrate if the Commission should deviate from this position”

  23. Overview of Adopted EE Goals and the Energy Commission Approach

  24. Overview – EE Goals • EE Goals adopted in D.08-07-047 were based on Itron analyses developed for ED • Developed from a broad range of delivery mechanisms • Based on TMG concept, rather than IOU net program savings • Goals are established for all energy efficiency actions taken across the market within a utility service territory, and savings specific to utility programs

  25. Overview – EE Goals • Four Broad Categories • IOU programs (and naturally occurring savings) • Codes and Standards • Huffman Lighting Requirements (AB 1009) • Big Bold Energy Efficiency Strategies (BBEES)

  26. CEC Approach – EE Goals • Returned to fundamental analyses used to prepare the 2008 Goals Study • Key Question “What portion of the savings resulting from the specific conceptual designs is incremental to the adopted 2009 IEPR demand forecast?”

  27. CEC Approach – EE Goals • Revised economic/demographic drivers to match CED 2009 • Reconciled analytic methods used by Itron to the CED 2009 to the extent possible given constraints • Adjusts for programs now considered committed • Generated new versions of the alternate scenarios in the 2008 Goals Study

  28. Overview (GWh) – EE Goals

  29. Overview (MW) – EE Goals

  30. 2006-2008 Draft EE Evaluation Report

  31. Background – Draft Report • ED was directed to evaluate the 2006-2008 EE programs and verify the resulting energy savings and demand reductions • Estimates developed from measurements taken after installations • Impacts presented are limited to the direct savings impacts that resulted from programmatic activities and by Commission rules guiding evaluations

  32. Definitions – Draft Report • Reported: savings based on utility records of installed technologies pre-evaluation assumptions • Evaluated: savings based on field research of the installations • Gross: total savings resulting from program activities, regardless of attribution • Net: Portion of total savings that are directly attributable to IOU program activities; removes savings from free riders

  33. Evaluated Savings – Draft Report • Differences between reported and evaluated savings are expected • Reported savings are based on tracking data using planning assumptions for the savings attributable to specific installed technologies • Evaluated savings are a further refinement, based on tracking data review, installation verification, and field measurement • Closer alignment will only be achieved if ex-post evaluated results continue to be incorporated into planning assumptions

  34. Evaluated Savings – Draft Report

  35. Trends – Draft Report • Gap between reported and evaluated savings increasing since 2002-2003 • Causes may be multiple • Timing of evaluation to inform updates • Opportunities to update goals assumptions

  36. Policy Issues Comparison of CEC Incremental EE Report & IEPR Savings with the Commission’s EE Goals

  37. Key Policy Issues • CEC Incremental EE Report has three cases of forecast EE savings • High, Mid, and Low • Differences between CPUC 2008 EE Goals Decision values and CEC Incremental EE Report driven by four key adjustments • Economic/demographic drivers • Title 24 Building Standards • Title 20 & AB 1109 • Peak-to-energy ratio assumptions

  38. Policy Issue Questions • Is it reasonable for the LTPP analysis to use updated Econ/Demo drivers, even if they differ from the 2008 Goals Study? • Is it reasonable for the LTPP analysis to use updated consumption and peak growth rates, even if they differ from the 2008 Goals Study? • Is it reasonable to use updated Title 20 & Title 24 assumptions based on current information? • Is it reasonable to use different peak-to-energy ratios than in the 2008 Goals Study?

  39. Comparison – CPUC EE Goals & CEC Incremental EE Report 40% reduction for energy, 15% reduction for capacity

  40. 10,658 – 14,374 GWh cumulative savings in 2020 Savings Comparison (GWh) – CEC Incremental EE Report

  41. 4,034 – 6,484 MW cumulative savings in 2020 Savings Comparison (MW) – CEC Incremental EE Report

  42. Econ/Demo – CPUC EE Goals & CEC Incremental EE Report • Dip in forecasted energy consumption starting in 2009 • Largely due to impacts of increased committed EE savings and economic downturn • Between the CED 2007 and CED 2009 • Energy consumption down 5.36% • Peak consumption down 3.68%

  43. Title 24 – CPUC EE Goals & CEC Incremental EE Report • 2008 Goals Study assumed 2008 Title 24 would require a 15% efficiency improvement compared to 2005 Title 24 • However, 2008 Title 24 proceeding pushed out implementation by a year • It also had fewer new EE requirements • Result – Lower estimate of EE savings than in the 2008 Goals Study

  44. Title 20 / AB 1109 – CPUC EE Goals & CEC Incremental EE Report • CEC revised Title 20 appliance standards in response to AB 1109 • Impacts attribution of savings between IOU programs and appliance standards • Changed implementation timeframe • 2008 Goals Study assumed linear progress • Adopted Title 20 has different products and timeframes

  45. Peak-to-Energy – CPUC EE Goals & CEC Incremental EE Report • Traditional method of estimating peak savings is to convert energy savings to peak savings by each end-use or measure • Ratios are derived from end-use load shape data, multiplied by consumption estimates • 2008 Goals Study based on 2004 data • 2004 was historically mild weather • CED 2009 & CEC Incremental EE Report based on 2009 data • 2009 was a historically average weather year

  46. Peak Chart – CEC Incremental EE Report

  47. Uncertainties

  48. Key Issues - Uncertainties • Price Assumptions & Customer Response • Differences in Committed Savings • Annual Savings Trends • Savings Decay • BBEES Accomplishments

  49. Uncertainty Questions • Are the IOU program savings/naturally occurring savings reported in the CEC Incremental EE report a reasonable estimate of total EE savings from these two sources? • Given the TMG orientation of the CPUC adopted goals, is it necessary to pursue these attribution questions further within the context of the 2010 LTPP? • What is a reasonable base case assumption for the amount (GWh and MW) of committed savings shortfall (from years prior to 2012) that the IOUs would be expected to make up in the uncommitted years? • Does the uncertainty in year-to-year trends pose a significant risk for procurement purposes in the 2010 LTPP? • Should the supplemental information on savings decay reported by the CEC, and consistent with D.09-09-047, be used to make an adjustment to the adopted 2009 IEPR base line demand forecast in developing managed forecasts for procurement purposes in the 2010 LTPP? • Should BBEES savings be considered more uncertain than other components of the incremental EE forecast?

  50. Price Assumptions & Customer Response - Uncertainties • Different methodologies between Itron ASSET model and CED 2009 • ASSET model was used to develop the original 2008 Goals Study analyses • Impacts limited to IOU program & naturally occurring savings • CED 2009 • Assumes a 15% increase in electricity rates 2010-2020 • Uses traditional price elasticity at the end-use level to model customer response to price • ASSET • Constant real electricity rates • Complex choice algorithm that predicts some adoption even without price increases

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