E-1EfficiencyOne Application - Revised Application see Exhibit E-43
28 passages
percent have restricted their Performance Targets to include the metrics of energy savings and peak demand savings. Jurisdictions also sometimes include a metric associated with costs or expenditures. ENS Performance Targets: ENS agrees wi...
AI summary ENS agrees with Dunsky's recommendation to align Performance Targets with Subsection 79A(b)(v) of The Public Utilities Act , focusing on cumulative energy and peak demand savings. ENS proposes annual Performance Indicators including Total Ratepayer Benefits, Total Spending, and Customer Satisfaction, but excludes Total Spending as a Performance Target due to inherent business risks.
R Instant Rebates evaluation plan, there is no mention of the Master Product Code List, where all unitary savings for approved products are calculated. The "Program Base case" section of the evaluation plan is especially important in keepi...
AI summary The document discusses issues with the R Instant Rebates evaluation plan, including the absence of the Master Product Code List and the need for a revision date on the 2012 recommendations follow-up file. It also highlights the need to fill out the control file for selected projects to ensure quality and enable future evaluation.
Participation Assumptions As part of the rate and bill impact analysis, overall estimated participation rates, rather than participation numbers, for each rate class are presented. This is based on feedback from Synapse Energy Economics. C...
AI summary ENS uses participation rates instead of account numbers for rate class analysis, adjusting for multiple accounts and excluding unlikely participants. Historical data from 2012-2013 informs participation assumptions, with adjustments for Large Industrial and Municipal Utility classes. Repeat participation in Residential Instant Savings was validated at 71% based on market research. Exclusions for commercial/industrial customers in Appliance Retirement were made per DSM Advisory Group feedback.
2.1 Investments in Demand-side Resources Demand-side management (DSM) is recognized as a highly cost-effective electricity supply resource.[10](#page-193-3) For Nova Scotians, DSM has reduced customer electricity costs, provided substantia...
AI summary Demand-side management (DSM) is highlighted as a cost-effective electricity resource, reducing customer costs and providing economic and system benefits since 2008. ENS's proposed investments are projected to yield over $200 million in ratepayer benefits. Jurisdictions in Canada and the U.S. recognize DSM's value, with some requiring utilities to procure all cost-effective demand-side resources.
2.4 Macroeconomic Benefits The current investment level proposed by ENS is estimated to yield more than $200 million in net total resource benefit to ratepayers over the period of 2016 to 2018.[18](#page-196-3) In addition to these benefit...
AI summary ENS's proposed investment is projected to generate over $200 million in net total resource benefits for Nova Scotia ratepayers (2016-2018). Energy efficiency benefits extend beyond traditional DSM cost-effectiveness tests. The analysis uses Navigant's EL-RAM model, with a note that NSUARB M06475 suggests potential underestimation of benefits if NSPI ratepayers have lower capital costs than the utility.
2.5.1 Overview Demand-side resource investments provide additional benefits above and beyond the direct system benefits available to all customers and the electricity bill savings that accrue to Nova Scotian households and businesses that...
AI summary Demand-side investments provide non-energy benefits (NEBs) to participants, utilities, and society, enhancing affordability despite low costs. These benefits, beyond direct savings, are highlighted in Lazar and Colburn's 2013 report on energy efficiency's full value.
2.5.3 Participant Non-energy Benefits In addition to electricity energy savings that produce bill reductions, demand-side program participants may experience non-energy benefits, such as improved comfort, increased property values, improve...
AI summary Demand-side program participants in Nova Scotia may experience non-energy benefits such as improved comfort, increased property values, and enhanced productivity, in addition to energy savings and bill reductions. These indirect benefits are recognized alongside direct energy efficiency outcomes.
2.5.5 Further Societal Non-energy Benefits Demand-side resources also generate additional non-energy benefits for society as a whole that include energy security benefits from a reduced reliance on imported fossil fuels, reduced production...
AI summary Demand-side resources provide non-energy societal benefits, including enhanced energy security through reduced fossil fuel reliance, decreased hazardous waste from coal combustion, and lower water consumption by fossil-fired thermal plants.
2.5.6 Summary of Non-energy Benefits Issues Increasingly, non-energy benefits – especially those that accrue to participants – are viewed as significant benefit streams that the current demand-side resource benefit-cost analysis effectivel...
AI summary Non-energy benefits, particularly those to participants, are overlooked in the current demand-side resource benefit-cost analysis. This neglect is critical as the analysis should reflect total benefits and costs to both participants and non-participants, justifying affordable investments with net financial benefits for ratepayers.
IMPLICATION MPLICATION: ENS' portfolio should seek, among other goals, to maximize its net present S' should seek, other net present value (NPV) to ratepayers. Note on tradeoffs: exclusive focus on maximizing quantifiable net benefits coul...
AI summary ENS' portfolio should prioritize maximizing net present value (NPV) for ratepayers, but exclusive focus on quantifiable benefits may hinder long-term market transformation and increase risks. Balancing NPV with long-term strategies could lower costs and enhance net value, though common metrics may overlook these benefits.
ctiveness of demand-side management (DSM) options. More recently, the DSM community has come to question the wisdom of basing key decisions on the TRC. Specifically, four concerns have come to light: - 1. Accuracy: To many, the TRC has bee...
AI summary The text critiques the Total Resource Cost (TRC) methodology in Demand-Side Management (DSM), highlighting four concerns: accuracy of assumptions, systemic bias against DSM, neglect of ratepayer value, and potential policy conflicts with Nova Scotia's 2014 legislation. The TRC's flawed application may skew decisions against DSM, undermining equitable cost-benefit analysis.
STANDARD COST-EFFECTIVENESS TESTS The tests provided an analytical framework designed to reflect different perspectives. Among them, three are commonly used today 5 , namely: - The Total Resource Cost (TRC) test is designed as a sort of co...
AI summary The document outlines three standard cost-effectiveness tests: Total Resource Cost (TRC), Modified Total Resource Cost (MTRC), and Societal Cost Test (SCT). TRC is criticized for overlooking participant benefits, leading to MTRC modifications. SCT is a California variant of TRC, with historical changes in the California Standard Practice Manual, including renaming tests and incorporating non-energy benefits.
CHOICE OF TESTS: THE RISE OF THE TRC AND MORE RECENT TRENDS Through the vagaries of time and the shifting importance given to DSM, most states and provinces that gave it consideration have, in the end, landed on the use of the TRC test as...
AI summary The document discusses the evolution of cost-effectiveness testing in demand-side management (DSM), noting the initial dominance of the Total Resource Cost (TRC) test due to abundant low-cost opportunities. However, with diminishing low-hanging fruit and the recognition of non-energy benefits (NEBs), there's a growing shift towards alternative tests. Program administrators are reevaluating TRC's limitations, and many DSM leaders now use other methods.
INTRODUCTION The Total Resource Cost test is meant to measure cost-effectiveness from the perspective of consumers, writ large, i.e. something akin to a societal perspective. In itself, this is a valid and important perspective. However, a...
AI summary The Total Resource Cost (TRC) test, intended to measure cost-effectiveness from a societal perspective, faces concerns regarding accuracy, bias, ratepayer value, and policy alignment. Jurisdictions have adapted TRC methodologies, highlighting its non-standardized application despite originating from the Standard Practice Manual (SPM). Innovations in cost-effectiveness frameworks are emerging to address these issues.
ies and algorithms used to calculate the TRC, and to the accuracy which one should reasonably expect of any TRC analysis. 13 As noted previously, this concern applies equally to other tests. It is worth noting that some regions have delibe...
AI summary The document discusses concerns about the accuracy of TRC calculations, highlighting issues with methodological choices (deliberate vs. accidental) and errors in planning models. Examples include unaccounted non-energy benefits (e.g., staff time savings from CFLs) and truncated long-term benefits of energy measures.
ISSUE #2: BIAS: DOES THE CONVENTIONAL TRC NEGLECT IMPORTANT BENEFITS? Beyond issues of interpretation, many now question whether and to what extent the Total Resource Cost test, as commonly applied , may also contain an inherent bias. The...
AI summary The Total Resource Cost (TRC) test may contain inherent bias by neglecting non-energy benefits (NEBs) that accrue to participants, utilities, and society. While TRC accounts for all costs, it often overlooks NEBs, which are substantial but hard to quantify, leading to their effective undervaluation at zero in cost-effectiveness analyses.
PARTICIPANT NON-ENERGY BENEFITS (NEBS) Participant NEBs are increasingly understood to play a significant role in the overall value proposition that consumers derive from many energy efficient technologies or services. To understand the ex...
AI summary Non-energy benefits (NEBs) are critical to the value of energy efficiency programs, emphasized by program marketers, academic research, and market data. NEBs like comfort and health improvements drive consumer adoption, while neglecting them risks underinvestment and higher costs. Tim Woolf highlights that excluding NEBs from TRC tests undermines program effectiveness.
OTHER NON-ENERGY BENEFITS AND ISSUES Beyond Participant NEBs, DSM may offer additional non-energy benefits that accrue to the utility, and/or to society as a whole.
AI summary The text highlights that Demand Side Management (DSM) may provide additional non-energy benefits beyond Participant Non-Energy Benefits (NEBs), benefiting both the utility and society. These benefits are considered in the regulatory proceeding.
SUMMARY OF NEB ISSUES Increasingly, non-energy benefits – especially those that accrue to participants – are viewed as significant benefit streams that the current TRC effectively neglects. This is critical to the extent that the TRC's pur...
AI summary The document critiques the Total Resource Cost (TRC) methodology for neglecting non-energy benefits (NEB), particularly for participants. It notes that some regions modify TRC to include NEB or adopt alternative tests. A study evaluated DSM scenarios with 1.0%-2.5% annual savings, referencing Nova Scotia's 2012 DSM achievement of 1.52% annual sales. The text also mentions deliberate low-rate choices to avoid discounting future generations' interests.
IMPLICATIONS FOR NOVA SCOTIA Nova Scotia's current TRC does not account for non-energy benefits, whether they accrue to participants, the utility, or society at large. By failing to account for these benefits, while fully accounting for pa...
AI summary Nova Scotia's current Total Resource Cost (TRC) methodology excludes non-energy benefits (NEB), creating a bias against Demand Side Management (DSM) by fully accounting for participant costs while ignoring societal and utility-level NEB.
ISSUE #3: RATEPAYER VALUE: DOES THE TRC BEST REFLECT A RATEPAYER PERSPECTIVE? The Total Resource Cost test seeks to find the theoretically optimal investment, irrespective of who – ratepayers (through the program administrator) or particip...
AI summary The TRC test aggregates all costs, including those borne by participants, which may not align with ratepayer interests. Critics argue it fails to reflect program efficiency or stakeholder concerns about who pays. The California Standard Practice Manual highlights that TRC includes participant costs, unlike supply-side options, potentially distorting program decisions and overlooking long-term market transformation.
THE NESP'S RESOURCE VALUE FRAMEWORK One result of the ongoing revision of cost-effectiveness frameworks is the recent publication of the Resource Value Framework, or RVF. Developed by the National Efficiency Screening Project (NESP) 29 , t...
AI summary The National Efficiency Screening Project (NESP) developed the Resource Value Framework (RVF) to evaluate cost-effectiveness screening practices against principles like public interest, symmetry, and transparency. The RVF highlights that Nova Scotia's Total Resource Cost (TRC) method does not align with these principles. The framework emphasizes including hard-to-quantify benefits and aligning with energy policy goals.
NEW NORTHEAST COST-EFFECTIVENESS GUIDELINES At the time of completing this report, states across the northeast U.S. had agreed to adopt a set of guidelines largely inspired from the RVF framework. Specifically, representatives of the state...
AI summary Northeast U.S. states adopted cost-effectiveness guidelines inspired by the RVF framework, developed under NEEP's EM&V Forum. The guidelines emphasize five principles, including aligning with state policies, accounting for non-energy benefits (NEB), and using the Program Administrator Cost (PAC) test as a foundation. The NEEP EM&V Forum Steering Committee endorsed the guidelines in 2014.
OPTION A. FIX THE TRC (ASSESS NON-ENERGY BENEFITS + OTHER CHANGES) One solution to the above concerns is to directly address each – or as many as possible, within reason – of the missing benefits or other algorithmic concerns, namely: acco...
AI summary Option A proposes addressing missing benefits and algorithmic issues in the Total Resource Cost (TRC) by incorporating non-energy benefits (NEBs) and reevaluating the discount rate for Demand Side Management (DSM) future benefits. This aims to improve the accuracy of TRC calculations and ensure comprehensive consideration of all relevant factors.
1. ACCOUNT FOR PARTICIPANT NON-ENERGY BENEFITS (NEBS) The exclusion of participant NEBs is arguably the most important factor in generating bias against DSM. On the other hand, the reason that NEBs have historically been excluded is that t...
AI summary The exclusion of participant non-energy benefits (NEBs) may bias against demand-side management (DSM). NEBs are hard to quantify, leading to varied valuation methods: specific valuations via market research, inferred valuations using cost-saving algorithms, or approximate adders. Each approach has trade-offs, balancing accuracy against over-conservatism or false precision.
2. ACCOUNT FOR UTILITY NEBS As discussed previously, DSM arguably brings additional non-energy benefits to the utility (and hence ratepayers), primarily through risk mitigation. While risk benefits are important, they are even more difficu...
AI summary The document discusses the challenges of quantifying non-energy benefits (NEBs) from Demand Side Management (DSM), noting that regions like Vermont and the U.S. northwest use proxy adjustment factors in their cost-effectiveness algorithms. Risk mitigation is highlighted as a key non-energy benefit, though it remains difficult to measure.
Figure 8. Participant NEBs: The Case of B.C. In British Columbia, the ambitious DSM goals of BC Hydro and Fortis BC recently began to hit up against the limitations of the TRC. As a result, in December 2011, the province chose to redefine...
AI summary British Columbia redefined its Total Resource Cost (TRC) test to include non-energy benefits (NEBs) from demand-side management (DSM) programs. Three methods were introduced for NEB inclusion, with a 15% cap on portfolio-level impacts. Nova Scotia Power may benefit from reduced utility costs due to lower consumer electricity bills, though these are not quantified as utility NEBs.
- Fuchs, L., Skumatz, L. A., & Ellefsen, J. (2006). Non-Energy Benefits (NEBs) from Energy Star: Comprehensive Analysis of Appliance, Outreach and Homes Programs. ACEEE Summer Study on Energy Efficiency in Buildings , (pp. 2.79 - 2.89). As...
AI summary The document references studies and reports on energy efficiency program evaluations, non-energy benefits (NEBs), and cost-effectiveness methodologies. Key topics include DSM cost-effectiveness analysis, NEB quantification, and regulatory frameworks for energy efficiency. Entities include ACEEE, Efficiency Vermont, and Nova Scotia government publications, with cross-references to Vermont regulatory proceedings.