Transcript Slide 1

University of Pittsburgh School of Law
2013 Energy Law and Policy Institute
Eric Matheson
Energy Advisor to PAPUC Commissioner James H. Cawley
August 2, 2013
1
Overview of PAPUC Energy Regulation
1.
2.
3.
4.
5.
6.
7.
8.
Cost based regulation of gas, electric and steam utilities for distribution
and transmission service
Resolve disputes regarding siting and construction of distribution and
transmission facilities.
Establish policies to strengthen retail and wholesale competitive
markets; light handed regulation of electric and natural gas suppliers.
Implement cost effective energy efficiency and conservation programs.
Deploy smart meters and time-based pricing programs at large electric
utility service areas.
Maintain effective low-income customer programs.
Approve replacement of aging infrastructure programs and associated
cost recovery mechanisms.
Collect unconventional well fees and disperse funds.
2
Energy Efficiency and Conservation
Programs
Electric Distribution Companies [EDCs]
• Act 129 Energy Efficiency and Conservation
programs [EE&C Programs]
– Phase I October 2009-May 31, 2013
– Phase II June 1, 2013-May 31, 2016
Natural Gas Distribution Companies [NGDCs]
• Vary by NGDC
• Some may not have any programs – contact your
local gas utility company
3
EE&C Phase II EDC Requirements
3 Year MWh Value of 2009/10 Forecast
EDC
3 Year % of 2009/10
Reductions
Forecast Reductions
Duquesne
2.0
276,722
Met-Ed
2.3
337,753
Penelec
2.2
318,813
Penn Power
2.0
95,502
PPL
2.1
821,072
PECO
2.9
1,125,851
West Penn
1.6
337,533
4
Phase II EE&C Programs
Phase II EE&C Guidelines
• EE&C program cap of 2% of 2006 revenues. (Act 129)
• Electric Utilities can carry over excess EE savings from Phase I.
• At least 25% savings each program year.
• At least 10% of savings from Government/non-profit sector.
• At least 4.5% of savings from low-income programs and a
proportionate number of programs for this sector.
• Programs should target multi-family housing.
• Must offer at least one energy efficiency program for each
customer sector.
• Must offer at least one comprehensive measure for residential
and small commercial sectors.
• Energy efficiency expenditures are dispersed among customer
classes based on cost effectiveness.
5
Phase II EE&C Programs
Demand Response (DR) Act 129 programs
• Phase II excludes any DR goals. Phase III?
• PAPUC is reviewing cost effectiveness of the Phase I, 4.5% DR program.
Final determination to be made by end of 2013.
• PAPUC encouraged utilities to continue DR programs if cost effectiveness
could be demonstrated, and Act 129 budget caps are not exceeded.
• PECO extended their Mass Market Direct Load Control Program for 1
year. *
• Comverge continued the Direct Load Control Program in the PPL service
area.
• Issues – quantifying the price-suppression impacts of DR programs and
the value of avoided T&D costs, how to design future DR goals, etc.
* PECO recruited over 86,000 residential and small commercial customers and installed over 100,000 load control devices. PECO
submitted that the DLC Program delivered as much as 99 MWs toward PECO’s demand response target in Phase I. PECO’s DLC
Program has a total resource cost (TRC) benefit-cost ratio of 2.38.
6
Duquesne Phase II EE&C Programs
Residential EE&C Programs
• Energy Efficiency Rebate Program
• Residential/Schools Energy Pledge Program
• Residential Home Energy Reporting Program
• Residential Appliance Recycling Program
• Residential Whole House Retrofit Program
• Residential Low Income Energy Efficiency
Program
7
Duquesne Phase II EE&C Programs
Commercial and Industrial EE&C Programs
• Commercial Sector Umbrella Program.
• Commercial Sector Sub-Programs (3): Office Building Program, Health
Care Segment Program, and Retail Stores Program.
• Commercial Sector Upstream Lighting Program.
• Commercial Sector Sub-Program: Small Commercial Direct Install
Program (lighting – free install).
• Industrial Sector Umbrella Program.
• Industrial Sector Sub-Programs: Primary Metals Segment Program,
Chemical Products Segment Program, Mixed Segments Program.
• Governmental/Non-Profit Sector Sub-Program: Education Segment
Program (Schools and Colleges).
• Governmental/Non-Profit Sector Multifamily Housing Retrofit Program.
• Public Agency Partnership Program (local government).
8
EE&C Coordination with other DSR Programs
• Electric utilities are to coordinate EE&C programs with natural gas
EE programs – joint rebates, inter-utility audits.
• Electric utilities may bid Act 129 EE measures into PJM capacity
markets (not required). Any such revenues are returned to the rate
payer class, and not included in the Act 129 budget. The issue of
customers directly participating in EE PJM markets via PJM CSPs was
referred to further stakeholder discussions.
• Electric utilities charged with encouraging participating EE&C
customers to leverage other state and federal energy efficiency
programs and incentives.
• Customers can continue during Phase II to participate in PJM DR,
economic, and ancillary market programs offered by various PJM
Curtailment Service Providers pending PAPUC review of Act 129 DR
programs.*
* http://www.pjm.com/markets-and-operations/demand-response/csps.aspx
9
DR Act 129 Issues going forward
• DR vs. Energy Efficiency – what’s more
beneficial and cost effective for consumers?
• How can be better calculate the benefits of
peak demand reduction? [price suppression?
T&D avoided costs? Customer profit?]
• Should we broaden our calculation of EE&C
benefits of DR and Energy efficiency to include
other non-electrical savings and benefits?
• How can Act 129 legislation be improved?
10