Should CDR or SARA be Adjusted to Better Account

for EE, DR and DG?

Cyrus ReedDSWG

September 21, 2012

What I Will Cover Very Briefly1. 1. What is currently covered in SARA and

CDR2. 2. Areas for possible expansion of EE/DR

Resource in CDR1. A. IOU Efficiency Programs -- goals and

achievements2. B. NOIE Efficiency Programs -- What we

know and way forward3. C. TDHCA Weatherization Programs --

some small gains4. D. Political Subdivision EE Programs --

what we know and don't5. E. Building Code Adjustments -- do

Codes matter? 6. F. Distributed Generation -- Already

covered above? 7. G. Others – Price-Responsive DR? 8. E. Market-Based DR?

3. 3. Conclusions and Next Steps

Fundamental changes are being discussed at PUC in regards to wholesale energy cap, potential for more ancillary services and potential for capacity market

The CDR is the one document read by policy makers, investors and others to determine the adequacy of our market to provide energy

The role of EE, DR and DG is being recognized more and more, but has not been incorporated into CDR

Why do we care?

1. What DR/EE is currently covered

in SARA and CDR

SARA

Not Much short-term ERS and

LARS depending on season

CDR

A bit more ERS, LARS Investor-Owned Utilities

EE Have now incorporated

50% of the required Demand Savings (30% of growth) for ERCOT-based IOUs from 2013 through 2022

Most utilities in Texas are not only meeting their goals but exceeding them

CDR only takes 50 percent of expected savings SARA Could be Adjusted to Take Into Account

some Percentage of EE Demand Reduction in that Year

CDR Should be Adjusted to Take A Larger Portion of EE Expected Savings – most demand reduction is focused on summer demand reduction

We could at least adjust the next calendar year based upon April Filings

Investor-Owned Utilities EE Programs

Utility 2013 DR Goal

2013 Expected DR

75% of Expected Savings

CDR 2013

Oncor 63.1 120

90Centerpoint 51.2 248

186AEP TNC 3.01 5.4

4.05AEP TCC 12.93 31

23.25TNMP 5.02 9.2

6.9Sharyland 1.3 2.3

1.725Total 137 416

311.92

240 MWs

2013 EE Numbers in CDR and in IOU Reports

NOIE have efficiency programs as well though they are not statutorily required

SB 924 (2011) requires all Cooperatives and Municipal Utilities to report their EE programs, goals and achievements to SECO annually

The First reports were delivered in April of 2012 and only covered 2011 year

The Reports are not helpful generally in determining the amount of EE – all over the map in type of information provided

SECO has sent the reports to ESL for analysis of any EE savings, which is required by statute

Likely ESL will not be able to say much because reports are too incomplete

NOIE Efficiency

Utility Energy Savings Demand Savings

CPS Energy 78,427 efficiency, plus more for demand response

17.9 MW for Efficiency, 94 MWs for DR

Austin Energy 118,000 MWh 44.7 MW

Bluebonnet Goals reported but not achievement

Brownsville 1,300 MWh 9 MW

Denton Municipal 257 MWh Not reported

Pedernales 10,500 MWh 4.5 MW

Some NOIE Numbers, 2011

Two largest Municipal utilities – AE and CPS Energy – have long term goals, dedicated funding stream and do have annual reports separate from SECO reports. Both of these utilities are saving 20 to 60 MWs per year for EE plus much more for DR.

PEC, Bluebonnet, Brownsville and United Electric have established goals for Energy Efficiency and have annual budgets though savings are currently in the 1 to 5 MW range

Recommendation: Improve reporting requirement and incorporate ESL report into CDR Long-term but for immediate work with CPS Energy and Austin Energy and maybe Pedernales to add municipal EE and DR into next CDR at some level

How to Incorporate NOIE EE

TDHCA is now required to report annually on their energy savings and units weatherized through their 27 subrecipients

2011 and 2012 are one-time large numbers because of ARRA

2012 report covers 2010 Data – no look forward Report shows significant energy savings and some 24,000

Units weatherized but the energy savings are based on old DOE assumptions – no independent analysis

Recommendation: Could do small adjustment based on funding streams but given present budget not worth it

IF SBF fund ever begins funding weatherization again, or there is another ARRA, could consider change

TDHCA Weatherization Programs – some small gains

Under SB 5(2001) and more Recent SB 898 (2011), political subdivisions, educational facilities and state agencies in 41 non-attainment areas are required to look at annual 5% reduction in energy use and report to SECO on their savings achieved

Reports for previous year due on October 1 Reports Analyzed by Energy Systems Lab to assess

energy savings and emission reductions Reporting in KWhs not in Demand Reduction ESL currently does annual Emissions and Energy Savings

Report – which includes SB 5 and SB 898 and includes projections – based on Kilowatt Hours and would need factor to convert to demand savngs

Work with ESL to develop methodology to convert EE Savings into Projected Demand Savings

Political Subdivision EE Programs

SECO is required to assess with input from ESL every next residential or commercial energy code

SECO adopted 2009 IECC and 2009 IRC codes in 2010 and made them state law by 2012

ESL has now recommended 2012 Code Adoption and SECO should begin rulemaking process soon

Local municipalities like Austin and Houston above state minimum ESL charged with measuring energy savings and emissions reductions due

to code compliant construction 2012 Report found that adopting of energy codes in Texas had reduced

peak demand between 2002-2009 by 684 MWs Recommendation: Utilize ESL existing data to adjust energy savings

projections to add demand reduction for energy codes (Example: 2012 codes lead to 15% reduction in demand from average

home – project slight adjustment in growth curve because of new home starts in Texas)

Do Energy Codes Matter?

ESL Generates Annual Energy Savings-NOX Generation Data from 10 Data Points, that are used to project savings:

Single-family homesMulti-family homesCommercial SavingsFederal BuildingsPUC Efficiency ProgramsPolitical Subdivision EE ProgramsSECO Programs (LOANSTAR)Wind and Other Renewable SavingsSEER 13 AnalysisFurnace Pilot

ESL Already Does This Analysis In Part, but focus is NOX

reductions

RECOMMENDATION: INVITE ESL TO PRESENT THEIR RESULTS AND DISCUSS TO WHAT EXTENT WINTER AND SUMMER DEMAND REDUCTION CAN BE INCORPORATED

Many of the utility EE programs already cover Renewable DR Programs and NO further

Adjustment Needed (Example: Austin, AEP)

However, to the extent that self-generators start to report to ERCOT or Utilities report these

connections or distributive resources to PUC this distributed generation could be added into

ERCOT projections as a new resource

Again, ESL also looks at energy savings from renewables

How are distributed utility-owned resources like Webberville incorporated?

Distributed Generation -- Already covered above? 

Price responsive DR – leave it to survey and other work to determine

Market-based DR – no adjustment needed yet until market rules in place

Others

Upward adjustment in CDR for IOU programs each year as programs are rolled out to better reflect reality

Incorporate NOIE EE programs but begin only with AE and CPS Energy and maybe PEC until ESL and SECO establish more formal reporting and analysis

Weatherization – no adjustment needed unless funding goes back up to major levels

Work with ESL and SECO to incorporate demand projection savings for SB 898and SB 924 reporting

Work with ESL on incorporation of demand savings for energy code compliant housing and make slight adjustment in projections for new growth

DRG – no adjustment except potential incorporation of self-reported data

Market and passive DR – jury still out

Conclusions