Topic:"Cost Recovery" in M07544

RETURN ON INVESTMENT For efficiency programs, return on investment is based on two general considerations: cost effectiveness and budget impact.

AI summary The analysis of return on investment for efficiency programs focuses on two key factors: cost effectiveness and budget impact. These considerations determine the financial viability and feasibility of implementing such programs.

Budget Impact Program administrators are not only affected by cost effectiveness concerns when determining their return on investment. From CLEAResult's experience, in several jurisdictions, the program budget is usually the limiting facto...

AI summary Program administrators face budget constraints that often limit expenditures more than cost-effectiveness. Budget impact must be evaluated alongside cost-effectiveness, considering per-unit, per-participant, and total impacts. Incentives may be cost-effective but may not fit within program budgets, necessitating ROI criteria that set ceilings but often result in lower incentive values.

Sources of Funding The Systems Benefit Charge (SBC) is the primary source of NYSERDA s funding for energy conservation programs. It was established on May 20, 1996. The funds collected from the SBC are allocated towards energy efficiency p...

AI summary The Systems Benefit Charge (SBC) is the primary funding source for NYSERDA's energy conservation programs, supporting energy efficiency, R&D, low-income initiatives, and environmental disclosure. SBC was extended in 2016 and funds the Clean Energy Fund (CEF) after replacing the Energy Efficiency Portfolio Standard (EEPS). Additional funding comes from the Regional Greenhouse Gas Initiative (RGGI) and Renewable Portfolio Standard (RPS), which finance renewable energy and carbon abatement projects.

Inputs - Avoided Supply Costs (energy and capacity); - Local Avoided Supply Costs (energy and capacity); - Fixed Program Administration Costs; - Year of Implementation; - Measure Participation; - Variable Costs; - Measure Energy Savings (F...

AI summary The document outlines key inputs for analysis in a Nova Scotia regulatory proceeding, including avoided supply costs (energy and capacity), program administration costs, measure participation, energy savings, demand reduction, and financial factors like discount and inflation rates. These inputs inform evaluations of energy efficiency programs and their economic impacts.

Component of Incremental Equipment Cost and Participant Cost Test Component of Participant Cost Test Upfront Purchase Costs Upfront Installation Costs Lifecycle Purchase Costs (excluding Upfront Purchase Costs) Lifecycle Installation Costs...

AI summary The text outlines the components of the Incremental Equipment Cost and Participant Cost Test, including upfront and lifecycle costs, incentives, and residual value. It mentions that an NPV analysis may be required depending on when the costs are incurred.

RETURN ON INVESTMENT The determination of the return on investment is an evaluation of factors from the program administrator's and broader society's perspective. For efficiency programs, return on investment is based on two general consid...

AI summary The evaluation of return on investment considers both cost effectiveness and budget impact for efficiency programs, assessed from the perspectives of program administrators and broader society. These factors determine the overall value and financial implications of implementing such programs.

Measure Project Cost ($) Simple Project Payback Current Cost to Customer Cost to Customer Threshold Custom Project Retrofit Track $96,424 4 years 25% 50% 2 years Table 32: Cost to Customer Incentive Level Threshold for Average Project in C...

AI summary The table shows that the cost to customer threshold is not breached for the Custom Project Retrofit Track, with a project cost of $96,424 and a simple payback period of 4 years. The current cost to customer is 25%, below the 50% threshold.

Costs Under the TRC-plus test include: - Costs incurred by program participants (Incremental Equipment Costs) - Costs of running the energy efficiency programs (delivery and administration costs)

AI summary The TRC-plus test includes incremental equipment costs for program participants and delivery/administration costs of energy efficiency programs.

Costs in TRC Calculation The costs calculated in the TRC are costs paid by the program administrators and participants plus the increase in supply costs for any period when load is increased.

AI summary The Total Resource Cost (TRC) includes expenses incurred by program administrators and participants, as well as increased supply costs during periods of load growth. This calculation accounts for both administrative/participant expenditures and higher energy supply costs due to increased demand.

Sources of Funding The Systems Benefit Charge (SBC) is the primary source of NYSERDA s funding for energy conservation programs. It was established on May 20, 1996. The funds collected from the SBC are allocated towards energy efficiency p...

AI summary The Systems Benefit Charge (SBC) funds NYSERDA's energy conservation programs, including the Energy Efficiency Portfolio Standard (EEPS), which was replaced by the Clean Energy Fund (CEF). Established in 1996 and extended in 2016, the SBC supports energy efficiency, research, low-income programs, and environmental disclosure. Additional funding sources include the Regional Greenhouse Gas Initiative (RGGI) and Renewable Portfolio Standard (RPS), which finance carbon abatement, renewables, and are regulated by the Public Service Commission.

Efficiency Vermont's spending for 2013 and 2014 is provided below: Prior Year Current Year 2014 Cumulative starting 1/1/12 Cumulative starting 1/1/12 # participants with installations 37,483 54,135 131,094 131,094 Operating Costs Administr...

AI summary Efficiency Vermont's spending for 2013 and 2014 is detailed, showing increases in operating, technical assistance, support services, and incentive costs. The table also highlights annualized and lifetime MWh savings, as well as the percentage of incentive spending relative to total program spending and the cost per kWh.

MARKET STRUCTURE OVERVIEW The Efficiency Maine Trust Act came in effect in 2009 and is responsible for Efficiency Maine's inception as an independent Trust. Their purpose is to develop, plan, coordinate, and implement energy efficiency/alt...

AI summary The Efficiency Maine Trust Act (2009) established Efficiency Maine as an independent trust to implement energy efficiency programs. Key goals include weatherizing buildings, reducing peak load, and achieving cost-effective savings. The Maine Public Utilities Commission (MPUC) reviews triennial plans, approves budgets, and oversees program funding from utilities and markets. Energy efficiency is highlighted as the lowest-cost energy resource in Maine.

Avoided Costs Periodically, the avoided costs are updated. The last update occurred in 2015, based on a report by Synapse Energy Economics which investigated the avoided energy supply costs for New England. Before any changes are implement...

AI summary Avoided costs for New England's electricity were last updated in 2015 by Synapse Energy Economics, reviewed by the board, and categorized into benefits like avoided capacity and energy costs, transmission and distribution costs, and CO2 emissions reduction.

1. Measure Library Section (from TRM process recommendation in report) This section should include the details of each measure in the portfolio, or measures being considered. - Efficient Technology Name; - Efficient Technology Description;...

AI summary The Measure Library Section outlines parameters for evaluating energy efficiency measures, including technology details, costs, energy savings, and program evaluation criteria. It emphasizes metrics like TRC (Total Resource Cost), PAC (Program Administrator Cost), and cost-effectiveness thresholds for assessing measure viability.

Inputs - Avoided Supply Costs (energy and capacity); - Local Avoided Supply Costs (energy and capacity); - Fixed Program Administration Costs; - Year of Implementation; - Measure Participation; - Variable Costs; - Annual Operating Costs (F...

AI summary The document outlines key input parameters for a regulatory proceeding, including avoided supply costs, program administration expenses, measure participation rates, energy savings persistence, and financial factors like discount rates. These inputs are critical for evaluating energy efficiency programs and their associated costs and benefits.

Budget Impact Program administrators are not only affected by cost effectiveness concerns when determining their return on investment. From CLEAResult's experience, in several jurisdictions, the program budget is usually the limiting facto...

AI summary The text emphasizes that program budgets, not just cost effectiveness, often limit expenditures in energy efficiency programs. While incentives may be cost-effective, they must align with budget constraints. Budget impact analysis should consider per-unit savings, per-participant costs, and total budget limits. ROI criteria set incentive ceilings but are often adjusted based on perceived value.

Component of Incremental Equipment Cost and Participant Cost Test Component of Participant Cost Test Upfront Purchase Costs Upfront Installation Costs Lifecycle Purchase Costs (excluding Upfront Purchase Costs) Lifecycle Installation Costs...

AI summary The document outlines the components of the Incremental Equipment Cost and Participant Cost Test, including upfront and lifecycle costs, incentives, and residual value. It provides a structured breakdown of factors considered in evaluating program costs and participant expenses.

RETURN ON INVESTMENT The determination of the return on investment is an evaluation of factors from the program administrator's and broader society's perspective. For efficiency programs, return on investment is based on two general consid...

AI summary The document outlines that return on investment (ROI) for efficiency programs is evaluated from both the program administrator's and societal perspectives, focusing on cost effectiveness and budget impact as the two primary considerations.

Other Considerations for Business Energy Rebates Program From reviewing program operations, the Business Energy Rebates program tracks retail pricing through the application process. This allows program managers to understand if incentive...

AI summary The Business Energy Rebates program monitors retail pricing to set appropriate incentive levels, relying on cost-to-customer thresholds. High Program Administrator Costs (PAC) are forecast but deemed manageable with active budget tracking. The Instant Rebates stream lacks customer data, complicating alignment with local avoided costs. Effective program oversight is emphasized to ensure cost-effectiveness.

Costs Under the TRC-plus test include: - Costs incurred by program participants (incremental costsIncremental Equipment Costs) - Costs of running the energy efficiency programs (delivery and administration costs)

AI summary The TRC-plus test includes incremental equipment costs borne by participants and delivery/administration costs of energy efficiency programs. This framework evaluates total resource costs beyond direct equipment expenses.

2013-2015 Total Portfolio $/kWh 2013 2014 2015 Gross Savings (kWh) 828,999,924 845,181,086 769,529,791 Spending $ 317,221,372 $ 365,056,021 $ 385,199,846 $/kWh $ 0.38 $ 0.43 $ 0.50 Excludes C&S,EM&V and On-Bill Financing expenses reported...

AI summary The table provides data on the 2013-2015 Total Portfolio in terms of Gross Savings (kWh) and Spending, including the \/kWh cost. It also highlights the Incentive-to-Administrative Spending Ratios for PG&E during this period. The data is budgeted, not actual, and excludes certain expenses.

History In 1999, Oregon lawmakers and citizens envisioned a future with Oregon homes and businesses powered by clean, affordable energy. They established stable, consistent funding to help Oregonians invest in energy efficiency and renewab...

AI summary In 1999, Oregon lawmakers and citizens established Energy Trust of Oregon to promote clean, affordable energy through energy efficiency and renewables. The Energy Trust, operational since 2002 under the Oregon Public Utilities Commission, funds programs supported by customers of four utilities across two states.

Costs in TRC Calculation The costs calculated in the TRC are costs paid by the program administrators and participants plus the increase in supply costs for any period when load is increased.

AI summary The Total Resource Cost (TRC) calculation includes costs borne by program administrators and participants, as well as increased supply costs during periods of load growth. This approach accounts for both direct program expenses and indirect impacts on supply-side costs.

Sources of Funding The Systems Benefit Charge (SBC) is the primary source of NYSERDA s funding for energy conservation programs. It was established on May 20, 1996. The funds collected from the SBC are allocated towards energy efficiency p...

AI summary The Systems Benefit Charge (SBC) is the primary funding source for NYSERDA's energy conservation programs, established in 1996 and extended in 2016. Funds support energy efficiency, research, and low-income programs, with EEPS replaced by the Clean Energy Fund (CEF). Other sources include RGGI, focused on carbon abatement, and RPS, a legislative mandate for renewable energy, funded by the Public Service Commission.

MARKET STRUCTURE OVERVIEW The Efficiency Maine Trust Act came in effect in 2009 and is responsible for Efficiency Maine's inception as an independent Trust. Their purpose is to develop, plan, coordinate, and implement energy efficiency/alt...

AI summary The Efficiency Maine Trust Act (2009) established Efficiency Maine as an independent trust to implement energy efficiency programs. It sets 10- and 20-year savings goals, including weatherizing homes, reducing peak load, and cutting fossil fuel use. The Maine Public Utilities Commission (MPUC) reviews triennial plans, approves budgets, and mandates utility funding. Energy efficiency is highlighted as the lowest-cost resource, with specific cost metrics provided.

Inputs - Incentive screening threshold in terms of cost to the customerCustomer Cost (From Measure Library); - Incentive screening threshold in terms of the program budget (From Measure Library); - Incentive screening threshold in terms of...

AI summary The document outlines key inputs for evaluating energy efficiency programs, including customer cost thresholds, program budget limits, cost-effectiveness criteria, sector categorization, delivery channels, and financial impact assessments. These parameters are used to screen incentives and guide program implementation in regulatory proceedings.

Program budget On pages 44 and 45 of the report, CLEAResult discusses absolute incentive limits based on the program expenditure data. We agree that budget information can be and should be used to adjust the incentive levels in the manner...

AI summary The text discusses program budgeting, agreeing with CLEAResult's approach to adjusting incentives based on budget data but criticizing the use of forecasted expenditures. It advocates instead for setting budgets based on incremental costs and other factors, with flexibility to adjust incentives based on budget constraints or opportunities.

16 2. APPLICATION OF INCENTIVE LIMITS 17 Based on several stakeholder comments, it seems a concise description of 18 EfficiencyOne's intended application of incentive limits would be helpful. CLEAResult 19 has advised that EfficiencyOne sh...

AI summary EfficiencyOne is applying incentive limits through three categories: cost-to-customer, program budget, and utility cost-effectiveness. CLEAResult recommends specific calculation bases, while NSP's consultant Brattle Group suggests using PAC and PC tests by setting benefit/cost ratios to 1. EfficiencyOne uses a Consolidated Calculator to determine theoretical maximum incentives, with the lowest value as the upper limit.

ake an energy-efficient choice. Financial incentives address the cost barrier. The jurisdictions investigated in this project feature financial incentives as a key component of their program strategy. Depending on the program and jurisdict...

AI summary Financial incentives are a critical component of energy efficiency programs, with some jurisdictions allocating 75-80% of budgets to them. National Grid and regions like Massachusetts and Oregon emphasize minimizing administrative costs to ensure participants receive maximum financial benefits from programs.

RETURN ON INVESTMENT The determination of the return on investment is an evaluation of factors from the program administrator's and broader society's perspective. For efficiency programs, return on investment is based on two general consid...

AI summary The evaluation of return on investment for efficiency programs considers cost effectiveness and budget impact from both the program administrator's and broader societal perspectives. These factors are central to assessing the financial and societal value of such programs.

2013-2015 Total Portfolio $/kWh 2013 2014 2015 Gross Savings (kWh) 828,999,924 845,181,086 769,529,791 Spending $ 317,221,372 $ 365,056,021 $ 385,199,846 $/kWh $ 0.38 $ 0.43 $ 0.50 Excludes C&S,EM&V and On-Bill Financing expenses reported...

AI summary The table presents the 2013-2015 Total Portfolio \/kWh, including gross savings, spending, and \/kWh costs, along with PG&E's incentive-to-administrative spending ratios for the same period. The data is budgeted, not actual, and excludes certain expenses such as C&S, EM&V, and On-Bill Financing.

History In 1999, Oregon lawmakers and citizens envisioned a future with Oregon homes and businesses powered by clean, affordable energy. They established stable, consistent funding to help Oregonians invest in energy efficiency and renewab...

AI summary In 1999, Oregon established Energy Trust of Oregon (ETO) to promote clean, affordable energy through efficiency and renewables. ETO, overseen by the Oregon Public Utilities Commission since 2002, funds programs benefiting customers of four utilities across two states, focusing on cost-effective solutions and customer satisfaction.

Costs in TRC Calculation The costs calculated in the TRC are costs paid by the program administrators and participants plus the increase in supply costs for any period when load is increased.

AI summary The Total Resource Cost (TRC) includes costs paid by program administrators and participants, as well as increased supply costs during periods of higher load. This calculation accounts for both administrative and supply-side impacts of demand-side management programs.

Sources of Funding The Systems Benefit Charge (SBC) is the primary source of NYSERDA s funding for energy conservation programs. It was established on May 20, 1996. The funds collected from the SBC are allocated towards energy efficiency p...

AI summary The Systems Benefit Charge (SBC) is the primary funding source for NYSERDA's energy conservation programs, established in 1996 and extended in 2016. It funds the Energy Efficiency Portfolio Standard (EEPS), replaced by the Clean Energy Fund (CEF). Additional funding comes from the Regional Greenhouse Gas Initiative (RGGI) and Renewable Portfolio Standard (RPS), which support carbon abatement, renewables, and energy efficiency through allowance auctions and utility assessments.

FUTURE TARGETS The 2015-2017 period has a savings target of 321,800 MWh, with an associated electricity savings resource acquisition budget of just over $130 million. The total budget for Efficiency Vermont's budget which included revenues...

AI summary The 2015-2017 period has a savings target of 321,800 MWh with a $130 million budget. Efficiency Vermont's total budget of $174 million includes revenues from the efficiency charge, Regional Greenhouse Gas Initiative (RGGI), ISO-NE Forward Capacity market, and performance fees.

MARKET STRUCTURE OVERVIEW The Efficiency Maine Trust Act came in effect in 2009 and is responsible for Efficiency Maine's inception as an independent Trust. Their purpose is to develop, plan, coordinate, and implement energy efficiency/alt...

AI summary The Efficiency Maine Trust Act (2009) establishes Efficiency Maine as an independent trust to implement energy efficiency programs, targeting 100% residential weatherization by 2030, 100 MW peak load reduction by 2020, and 30% fossil fuel reduction by 2030. The Maine Public Utilities Commission (MPUC) reviews triennial plans, which outline cost-effective energy savings goals and funding mechanisms, including ratepayer contributions and market revenues. Energy efficiency is highlighted as the lowest-cost resource, with savings costs averaging 4.3 cents/kWh for electricity and $12.96/MMBtu for heating fuels.

MASSACHUSETTS ENERGY EFFICIENCY PROGRAM INCENTIVE AND COST EFFECTIVENESS POLICY Massachusetts is viewed as one of the leading jurisdictions for promoting energy efficiency in North America. It is ranked as the #1 jurisdiction in ACEEE's 20...

AI summary Massachusetts leads in energy efficiency, mandated by the Green Communities Act to prioritize cost-effective measures. Targets include 2.6% retail sales (2015) and 4,122 GWh savings (2016-2018). Funding comes from charges, capacity markets, cap-and-trade, and surcharges, with 10% allocated to low-income programs.

Avoided Costs Periodically, the avoided costs are updated. The last update occurred in 2015, based on a report by Synapse Energy Economics which investigated the avoided energy supply costs for New England. Before any changes are implement...

AI summary Avoided costs are periodically updated, with the last update in 2015 based on Synapse Energy Economics' report on New England's avoided energy supply costs. Updates require board approval. Calculations cover the entire New England region, including Massachusetts, with categories like avoided capacity costs, renewable portfolio standards (RPS) compliance costs, and transmission/distribution costs.

1. Measure Library Section (from TRM process recommendation in report) This section should include the details of each measure in the portfolio, or measures being considered. - Efficient Technology Name; - Efficient Technology Description;...

AI summary The Measure Library Section outlines required data points for evaluating energy efficiency measures, including technology details, cost estimates, penetration forecasts, and program parameters. It emphasizes quantifying energy savings, cost-effectiveness, and program-specific thresholds for incentive eligibility.

Inputs - Incentive screening threshold in terms of Customer Cost (From Measure Library); - Incentive screening threshold in terms of the program budget (From Measure Library); - Incentive screening threshold in terms of cost effectiveness;...

AI summary The document outlines key inputs for evaluating energy efficiency programs, including incentive screening thresholds based on customer cost, program budget, and cost effectiveness, alongside sector categorization, delivery channels, and financial impact assessments.

RETURN ON INVESTMENT The determination of the return on investment is an evaluation of factors from the program administrator's and broader society's perspective. For efficiency programs, return on investment is based on two general consid...

AI summary The ROI evaluation considers program administrator and societal perspectives, focusing on cost effectiveness and budget impact for efficiency programs.

Budget Impact Program administrators are not only affected by cost effectiveness concerns when determining their return on investment. From CLEAResult's experience, in several jurisdictions, the program budget is usually the limiting facto...

AI summary The text emphasizes that program budgets, not cost-effectiveness, often limit energy efficiency programs. While incentives may be cost-effective, they must align with budget constraints. Budget impact analysis should consider per-unit savings, per-participant costs, and total program budgets. Return on investment criteria set incentive ceilings, but actual incentives are often lower due to participant value perceptions.

Substantiation for Upper Limits The values for the upper limits have been recommended from the jurisdictional studies and CLEAResult's experience from program design and incentive setting activities. The concept of setting Upper Limits for...

AI summary The document outlines CLEAResult's recommendations for setting upper limits on incentive levels, citing jurisdictional studies and industry trends. It suggests 50% for small purchases and 70-100% for cost-sharing programs, noting the need for annual reviews. EfficiencyOne is tasked with ensuring these limits remain effective as market conditions evolve.

Other Considerations for the Custom Program The Custom Program Retrofit incentive provides a level of flexibility that is best-in-class. Incentives are individually negotiated, based on four different parameters: - 1. Capped at percentage...

AI summary The Custom Program Retrofit incentive offers flexibility through individually negotiated incentives based on multiple parameters. It allows ENS to balance customer, utility, and societal perspectives. The program's expenditure averages $0.10/kWh to $0.15/kWh, with a growing emphasis on non-lighting projects. Avoided supply costs in Nova Scotia do not consider timing of savings, and local avoided costs can influence incentives once available.

Figure 20: Gas Program Budgets 4 Utility 2014 (Actuals) 2015 2016 2017 2018 2019 2020 2015-2020 Total Proposed Program Overhead Costs $10,023,000 $8,342,000 $8,505,000 $8,524,000 $8,542,000

AI summary Figure 20 presents proposed program overhead costs for gas utilities from 2014 to 2020, showing a decrease in costs from 2014 to 2015, followed by relatively stable figures from 2015 to 2020.

Avoided Supply Costs in TRC Calculation The benefits calculated in the TRC are the avoided supply costs. The avoided supply costs include the reduction in costs of electric energy, natural gas, generation and transmission, and distribution...

AI summary The Total Resource Cost (TRC) calculation includes avoided supply costs, which encompass reductions in energy and capacity costs valued at marginal cost during periods of load reduction.

MARKET STRUCTURE OVERVIEW The Efficiency Maine Trust Act came in effect in 2009 and is responsible for Efficiency Maine's inception as an independent Trust. Their purpose is to develop, plan, coordinate, and implement energy efficiency/alt...

AI summary The Efficiency Maine Trust Act (2009) established Efficiency Maine as an independent trust to implement energy efficiency programs, aiming for 100% residential weatherization by 2030 and 100 MW peak-load reduction by 2020. The Maine Public Utilities Commission (MPUC) approves triennial plans, which outline cost-effective savings targets and funding from ratepayers and the Forward Capacity Market. Energy efficiency is highlighted as the lowest-cost resource, with average savings costs of 4.3 cents/kWh for electricity and $12.96/MMBtu for heating fuels.

MASSACHUSETTS ENERGY EFFICIENCY PROGRAM INCENTIVE AND COST EFFECTIVENESS POLICY Massachusetts is viewed as one of the leading jurisdictions for promoting energy efficiency in North America. It is ranked as the #1 jurisdiction in ACEEE's 20...

AI summary Massachusetts leads in energy efficiency, mandated by the Green Communities Act requiring utilities to prioritize cost-effective programs. The 2016-2018 plan targets 4,122 GWh savings with a $1.96B budget, funded via charges, capacity markets, cap-and-trade, and surcharges. 10% of budgets must address low-income sectors.

Inputs - Avoided Supply Costs (energy and capacity); - Local Avoided Supply Costs (energy and capacity); - Fixed Program Administration Costs; - Year of Implementation; - Measure Participation; - Variable Costs; - Annual Operating Costs (F...

AI summary The document outlines key input factors for energy efficiency program analysis, including avoided supply costs, program administration expenses, measure participation rates, energy savings persistence, and incremental equipment costs. These inputs are used for evaluating cost-effectiveness, energy savings, and long-term financial impacts of efficiency measures.