Topic:"Incentive Structures" in M12282

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AI summary The text discusses the Board of Commissioners' (BC) and Board of Fuel Costs (BFC) analysis of the fuel-cost-adjustment mechanism, highlighting issues with base rates lagging actual costs and the impact on incentive structures. It also references the 67 # !'11 mechanism and the need for alignment with energy efficiency and conservation initiatives.

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AI summary The document discusses the impact of the Gq] mechanism on the efficiency of demand-side management programs and the challenges associated with aligning base rates with actual costs. It highlights the need for adjustments in the benefit-cost analysis test and the implications of these adjustments for the overall effectiveness of energy efficiency initiatives.

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AI summary The document discusses the EfficiencyOne Benefit-Cost Analysis Test Application and references the National Standard Practice Manual. It outlines the process for evaluating benefit-cost analyses in regulatory proceedings, focusing on the evaluation of energy efficiency programs and their economic impacts.

generator s t Distribution Capacity Updated NSP Avoided e Costs, Not based on historic ($1.86) ($1.86) 1.86 Should reflect marginal m Distribution System Losses Distribution losses from generator Should be reflected in I Distribution O&M A...

AI summary The text discusses distribution capacity costs, distribution system losses, and financial incentives related to DERs. It highlights the need for updated avoided costs, proper reflection of losses, and development of credit and collection risk strategies.

energyfuturesgroup.com 21 Figure 1: Illustrative Example of Recommended Nova Scotia Test As illustrated, the major drivers for the differences between these cases are the value of the saved other fuel, and the valuation of the avoided carb...

AI summary The text presents an illustrative example of a benefit-cost analysis test for Nova Scotia, highlighting the differences in value between cases involving fuel oil and natural gas, as well as the benefits of replacing electric resistance heat with heat pumps. The analysis considers the value of saved fuel, avoided carbon emissions, and the resulting net benefits.

Maintaining the availability of the transmission system to transport Transmission Capacity Transmission electricity safely and reliably Transmission System Losses Electricity lost through the transmission system Maintaining the availabilit...

AI summary The text outlines key aspects of transmission and distribution systems, including capacity, losses, voltage management, and financial incentives for DERs. It also mentions utility direct investment in DERs and program administration efforts.

Page 58 of 68 EfficiencyOne Benefit-Cost Analysis Test Application Appendix B energyfuturesgroup.com 59 The net host customer costs for each of the 1,000 heat pump replacements in this example are estimated to be $4,800 based on an average...

AI summary The document provides a benefit-cost analysis of 1,000 residential heat pump replacements, estimating net host customer costs and non-energy benefits. It also compares the scenario with pipeline gas replacement, highlighting the increased electric system impact costs and greenhouse gas impacts.

- 7 See Table 5 from the EFG Report, reproduced below, as an illustrative example of the accounting. [1](#page-37-0) 8 Nova Sco tia Test ($Million), 2% Social Di scount Rate, Usine 202 3-2025 Av oided Co osts: Example based on 1,000 Heat P...

AI summary The text presents a table from the EFG Report illustrating the accounting of benefits and costs associated with replacing 1,000 heat pumps in Nova Scotia. It includes avoided costs for generation, transmission, and distribution, as well as financial incentives, program administration, and environmental impacts.

Date Filed: July 4, 2025 E1 (IG) IR-16 Page 1 of 2 M12282, E1 BCA Test Application, May 16, 2025, Appendix B: Development of a Jurisdictional Benefit Cost Analysis Framework for Nova Scotia (EFG Report), Prepared by Energy Futures Group, p...

AI summary The text presents a Benefit-Cost Analysis (BCA) framework example, showing how changes in incentive amounts affect host customer measure costs while maintaining a constant benefit-cost ratio of 4.17. Total benefits are listed as $41.26, and total costs are $9.9, with incentives playing a key role in adjusting costs without affecting the ratio.

- i) The U.S. Energy Information Administration (EIA) Annual Energy Outlook was used for projected escalation rates for heating oil, propane and natural gas. For each fuel a simple average was used between the values of the high and low sc...

AI summary The document discusses the use of the U.S. Energy Information Administration (EIA) Annual Energy Outlook for projecting fuel price escalation rates and the application of a new BCA framework. It also outlines the assumptions made by EFG, including the use of a 40% incentive for heat pump replacements and the estimation of non-energy benefits based on energy savings.

- 3 Fulfillment of any directives provided by the NSEB outlined in their decision on E1's 4 BCA Application. 1 Request IR-36: 2 3 Reference: Appendix B EFG Report 4 5 Page 20 describes the example in Table 5 as showing that the cost effect...

AI summary The document discusses the fulfillment of directives by EfficiencyOne (E1) related to the Nova Scotia Energy Board's (NSEB) decision on their BCA Application. It outlines the cost structure for heat pump replacement incentives, including financial incentives, direct install costs, and program administration costs, as provided by the Energy Futures Group (EFG).

ity, greenhouse gas reductions) would have better results than seen under the TRC, however this is not a comment on whether they will pass or fail. Date Filed: July 4, 2025 E1 (SBA) IR-17 Page 1 of 1 Request IR-18: Please list all the fact...

AI summary EfficiencyOne (E1) outlines factors beyond the Benefit Cost Analysis (BCA) test for determining DSM program funding, including equitable allocation, customer bill impacts, Integrated Resource Plan (IRP) requirements, historical spending, industry capacity, and emerging technology support. Responses to IR-19 are incomplete, focusing on financing arrangements and per capita funding data requests.

(b) For the illustrative example shown in Figure 1 of David Hill's Evidence, EFG assumed an $8,000 measure cost with a 40% incentive (equal to $3,200) and $2,000 total of program non-incentive administration and support costs. These are me...

AI summary The text references an illustrative example from David Hill's Evidence, where EFG assumed an $8,000 measure cost with a 40% incentive and $2,000 in program non-incentive administration and support costs. It also cites a document filed on May 16, 2025, as part of a BCA Test Application.

(d) Please refer to parts (b) and (c) of this IR response. 1 Request IR-18: 3 Refer to the statement on page 44 of the EFG Report, which states that the recommended 4 proxy values are "calculated as a percent adder of the estimated energy...

AI summary The document refers to parts (b) and (c) of the IR response and discusses the application of proxy adders to net energy benefits by EfficiencyOne (E1) in the context of the EFG Report and E1's application. It also asks whether 'energy benefits' align with 'Electric Utility System Impacts' in the proposed Nova Scotia Test and seeks the rationale for applying proxy adders to non-incentivized measure costs for beneficial electrification.

lity-participant combination (i.e., non-participant customers). The test also does not take into account any transactions between the utility and the participant, such as incentives paid, since these are a benefit to one party (the partici...

AI summary The text critiques the Total Resource Cost (TRC) and Societal Cost Test (SCT) for failing to evaluate incentive structures effectively. While TRC focuses narrowly on utility-participant transactions, SCT includes broader societal impacts but still struggles to link benefits to program costs. E1's proposed use of Social Cost of Carbon estimates is highlighted as a method to quantify greenhouse gas benefits within a Benefit-Cost Analysis (BCA).

Is there any relevance to a Participant Cost Test? - Yes. - E1 should be directed to provide information on the results of the PCT by measure (or comparable - measures, such as customer payback periods), to indicate whether E1 has proposed...

AI summary The Participant Cost Test (PCT) is relevant, requiring E1 to provide PCT results by measure or comparable metrics to ensure proposed incentives are reasonable and cost-effective for Demand Side Management (DSM) participation without being excessive.

ney Lane regarding the application of Southwestern Public Service Company's for authorization to implement grid modernization. On behalf of the New Mexico Office of Attorney General. October 11, 2022. Public Service Commission of Wisconsin...

AI summary Testimonies by Courtney Lane and others in multiple U.S. states' regulatory proceedings regarding utility rate adjustments, grid modernization, and energy efficiency plans. Testimonies were provided on behalf of consumer advocates, attorney general offices, and public utility commissions from 2021 to 2022.

- program cost-effectiveness screening for the commercial and industrial efficiency programs (2000 – 2001) - Provided support for the assessment of Centra/Union Gas (Canada) DSM programs, for the Green Energy Coalition. (1996) - Provided t...

AI summary The text outlines technical support and program development activities related to energy efficiency and DSM programs from 1995 to 2001. Key tasks include cost-effectiveness screening, measure characterization, program design, and tool development for utilities and government agencies in Vermont, Maryland, and other regions.

lity-participant combination (i.e., non-participant customers). The test also does not take into account any transactions between the utility and the participant, such as incentives paid, since these are a benefit to one party (the partici...

AI summary The Total Resource Cost (TRC) test fails to assess incentive appropriateness as it nets out utility-participant transactions. The broader Societal Cost Test (SCT) includes societal impacts but struggles to link benefits (e.g., Social Cost of Carbon estimates) to program costs. Both tests have limitations in evaluating incentive structures and program effectiveness.

Is there any relevance to a Participant Cost Test? - Yes. - E1 should be directed to provide information on the results of the PCT by measure (or comparable - measures, such as customer payback periods), to indicate whether E1 has proposed...

AI summary The Participant Cost Test (PCT) is relevant. E1 must provide PCT results by measure or comparable metrics (e.g., customer payback periods) to demonstrate reasonable incentive scales for demand-side management (DSM). Incentives, paid by utility customers, must balance cost-effectiveness and avoid excessive or imprudent levels to ensure DSM participation.

Sample Projects: For the Office of the Utilities Consumer Advocate of Alberta (2016 - 2024): Analysis and strategic support of Government agency representing the interests of small utility customers. Addressed matters of utility rates and...

AI summary The text details a range of regulatory and utility-related projects across Alberta, Ontario, British Columbia, Manitoba, and other jurisdictions. It covers rate design, asset depreciation, utility regulation, and energy policy, with involvement from multiple regulatory bodies and organizations.

Response: The TRC test, as outlined in IR-2, suffers from a number of issues. First, the TRC test provides incomplete insight into the impact on a utility and its customers. It only looks at the aggregated impact on those parties, when com...

AI summary The response critiques the TRC test for aggregating impacts and ignoring subsidies, which can mask adverse effects on utilities and non-participating customers. It cites a Newfoundland board order and argues for the PAC measure as a more accurate assessment tool for utility and customer impacts.

sociation of Regulatory Utility Commissioners (NARUC).Assessed alternatives to 1 st year savings goals to eliminate disincentives to invest in longer-lived savings. (2013)

AI summary The document references Energy Futures Group, Inc.'s analysis of alternatives to first-year savings goals, aiming to remove disincentives for investing in long-term energy efficiency measures. The assessment was conducted in 2013, with a focus on improving demand-side management frameworks.

ISSIONS - Bowman - Mr. Bowman asks that the Board require E1 to show that any avoided GHG emissions are in fact the result - of DSM, and not due to an outside factor such as a cap.[15](#page-11-2) - E1 Response - As part of the 'evergreen'...

AI summary E1 responds to Bowman's request for demonstrating GHG emission reductions from DSM by proposing a methodology that accounts for emissions caps. E1 clarifies that PCT and payback periods are program design tools, not directly addressed by BCA. The analysis emphasizes differentiating DSM impacts from external factors and aligns with E1's incentive-setting framework.

- benefit of being a key part of the approach needed to fulfill the Board's role under section 79L(4) of - the Act, where it must specifically assess impacts on NS Power's customers. - The PAC test is also beneficial as it permits a BCA as...

AI summary The text argues for the adoption of the PAC test over E1's proposed BCA approach, emphasizing cost-effectiveness and the inclusion of customer incentives. It also criticizes the use of a low discount rate for assessing DSM measures and highlights the importance of including revenue benefits from electrification in the PAC test.

4.1.3 Board Approval of Demand-side Management [78] Before 2010, NS Power undertook its own demand-side management programs. In 2009, responding to growing concerns over the potential inherent conflict between selling electricity and takin...

AI summary Before 2010, NS Power managed its own DSM programs. In 2009, the Legislature enacted the Efficiency Nova Scotia Corporation Act, creating a not-for-profit to administer DSM programs and a fund, with NSUARB approving expenditures. The act aimed to resolve conflicts between electricity sales and demand reduction.

Request IR-39: - Page 36, Resilience, measures if a DER can help the electric system recover from a catastrophic - event. Please list the incentives and programs that E1 offers that provide resilience value to the - electric system.

AI summary Request IR-39 asks E1 to list incentives and programs that provide resilience value to the electric system through DER.

23 Request IR-15: - 24 Please provide a mathematical representation of the proposed BCA test, including each value 25 that would be summed as part of the "benefit" portion of the calculation, and each that would be 26 summed as part of the...

AI summary The document requests a mathematical representation of the proposed BCA test, detailing components of benefits and costs, including incentives to customers, energy efficiency industry participants, and utility administrative costs.

2 Request IR-16: - 3 Please indicate if, or how, the proposed BCA test can help inform the appropriate level of - 4 incentives or subsidies for participation in efficiency initiatives and provide an example.

AI summary Request IR-16 asks how the proposed Benefit-Cost Analysis (BCA) test can inform the appropriate level of incentives or subsidies for participation in efficiency initiatives, seeking an example.

And he further commented as follows: "But in that measure design, hybrid heating being an easy one to talk about, like you say, it's already got people talking about it, there's going to be others that aren't yet on our agenda that I want...

AI summary The speaker emphasizes the need for E1 to be involved early in designing hybrid heating measures, highlighting the importance of incentives for natural gas furnaces to avoid peak demand. They argue that revising measures during hearings is ineffective and that E1 should lead the design process from the start.