On October 27th, the SCC released the final order for the Dominion Energy EM&V proceeding. For this proceeding, the VAEEC acquired expert witness, Mark James, Senior Research Fellow in the Institute for Energy and the Environment and adjunct professor at Vermont Law School to testify on our behalf. Additionally, staff from the American Council for an Energy-Efficient Economy also provided technical assistance to our legal counsel and expert witness. In their final order, the Commission elected to adopt all of the recommendations in the Hearing Examiner’s report, which was released in July. 

Below is a summary of all of the Hearing Examiner’s findings and recommendations to the Commission with additional details on key recommendations. We have listed the page numbers in the report for the discussion on each recommendation so the reader can easily dive deeper into any recommendation of interest.

1. The focus of this proceeding is on adopting a more rigorous and accurate EM&V, and not on whether the Company’s current EM&V meets industry standards (p 44-50); VAEEC maintained “nationally-recognized TRMs that follow industry best practices, along with new commitments on EM&V that the Company is making in its post-hearing brief, can and will provide the accuracy that the Commission rightly demand”; 
2. The Commission should direct Staff to participate in the stakeholder process as a stakeholder to work with the Company and others to develop more rigorous and accurate EM&V data (p 50-53); James said, “With the newly established EM&V subgroup, the stakeholder process offers the opportunity for transparent presentation and discussion of options outside of a Commission proceeding. The recommendations generated by the EM&V subgroup would still be subject to Commission approval, but the products of the stakeholder group would be created through a transparent, collaborative, and consensus-driven process. Furthermore, using the stakeholder group allows for greater participation from interested parties and energy efficiency experts.” While SCC staff was concerned that participation would undermine their credibility, the Commission stated that they speak only through their Orders, not through Staff. 
3. The Commission should adopt the dashboard proposed by Company witness Frost in his rebuttal testimony (p 53-55), and attached to this Report as Attachment 1 (p 78); “The Company’s proposed dashboard represents an executive summary of high-level metrics that is easy to read and understood

at a glance. It focuses on spending, savings, metrics noted in the VCEA (such as carbon emission reductions and bill savings), and progress towards the GTSA and VCEA targets.” 

1. The Commission should adopt the reporting requirements committed to by Dominion Energy as further outlined in the Discussion (p 55-57); Adoption by the Commission should provide all interested parties clarity concerning the information to be provided by the Company and when that information will be provided. The provisions for using formats proposed by VAEEC witness James (or formats substantially similar) provides some flexibility as to the final format for these filings. Going forward changes in format or in the information provided can be addressed in future DSM proceedings.
2. The Commission should direct Dominion Energy to file the May EM&V Report in the Company’s December DSM filings (p 57-58); If the entire EM&V Report from May were also filed at the beginning of the new DSM proceeding, at the time of filing, it would represent the most current EM&V Report.
3. Deemed input values meet the measured and verified standard for determining compliance with the energy-saving requirements of the VCEA (p 58-62); VAEEC argued that, because it is impossible to measure electricity not consumed, all EM&V methods rely on extrapolations and have some margin of error and uncertainty. Indeed, VAEEC maintained  “the use of Virginia-specific inputs as recommended by Staff might prove to be less accurate than results based on deemed values.” VAEEC extended this to utility-specific data that may be less accurate and reliable than deemed values based on limitations of the utility-specific sample as compared to deemed values based on larger populations over longer periods of time. VAEEC recommended the Commission adopt the Company’s updated EM&V approach

as it is more rigorous and accurate than what was reviewed in 2019.

1. To increase the rigor and accuracy of the EM&V process, the Commission should adopt a combination of the Company’s proposed framework and the Staff’s proposed hierarchical framework, with both frameworks as further modified herein (p 62-73);
2. The Commission should direct the Company to document the baselines used during program design and all subsequent adjustments or changes to the baselines, and provide the documentation to Staff and the other parties upon request (p 73-75);
3. The Commission should direct the Company to increase the coordination between DNV and the program designer(s) consistent with their commitment in this proceeding (p 75); and
4. The Commission should direct the Company to undertake at least one baseline study based on Staff’s input. In the final order, the Commission required Dominion to select two programs to use in baseline studies to establish their own baselines for energy savings. The Company has ninety days from the final order to present this information to the SCC. 

The Dominion Energy proceeding on Evaluation, Measurement, and Verification (EM&V) before the SCC will be held next week. The VAEEC is formally participating in this hearing in support of EM&V measures that will help ensure the energy efficiency goals of the Virginia Clean Economy Act (VCEA) are met. EM&V is a critical first step in quantifying the value of energy efficiency programs, which allows demand-side management resources, like energy efficiency, to compete with supply-side resources, such as a natural gas plant, in meeting future energy needs in a cleaner, healthier way. 

The inherent challenge of evaluating energy efficiency programs is that there is no simple “meter” to record kilowatt-hours saved. As a result, a baseline needs to be established to identify what would happen in that program’s absence. However, there must be a balance between the cost of evaluation and the benefits of obtaining more precise data, as the pursuit of precision can siphon funds from the actual implementation of that energy efficiency program without adding significant benefit. To accomplish that balance, most utilities use deemed savings, or reasonable and unbiased estimates of energy and cost savings based on standard industry methods.  

During their pre-filed testimony, the SCC staff questioned the use of deemed savings and non-Virginia data and recommended establishing customized baselines for each individual program currently underway, despite this being against industry best practices. The VAEEC has serious concerns about this recommendation. Every dollar spent on EM&V is a dollar that cannot be spent on providing actual program services to customers. A requirement to use only Virginia-specific data or a rejection of deemed savings estimates can drive up EM&V costs without always providing improvement in EM&V data.

We have several recommendations that would ensure the best use of program dollars without unnecessary spending on duplicate data gathering. 

• Join the Mid-Atlantic Technical Resource Manual (TRM): A TRM provides the value of previous evaluation efforts while maintaining the flexibility to adapt to local- or utility-specific conditions such as lifespan estimates for specific measures, operating hours, baseline conditions, and local climatic conditions. When performing EM&V on their programs, Dominion already defers first to the Mid-Atlantic TRM, then factors in Virginia-specific data when appropriate. Formally joining the Mid-Atlantic TRM would provide uniformity in evaluation across all Virginia utilities and would further increase transparency into the process itself.
• Allow Flexible, Portfolio-Level EM&V Spending: The Commission should set spending caps at the portfolio level to allow for greater flexibility and additional energy-saving benefits. After reviewing EM&V data, a utility should be able to shift funds between programs (e.g., 10 percent to 15 percent) without having to seek additional approval. Removing these caps would permit greater flexibility, which can ultimately boost the energy savings generated from the portfolio without imposing additional costs on customers.
• Stakeholder Input: Allow the stakeholder group to assist in developing consensus for EM&V methods. With the newly established EM&V subgroup, an opportunity is provided to present and discuss options for EM&V methods and protocols outside of a Commission proceeding. By using the Mid-Atlantic TRM for this purpose, the stakeholder group would avoid the unnecessarily burdensome process of developing and approving the specifics of every measure-specific or program-specific baseline. The recommendations generated by the EM&V subgroup would still be subject to Commission approval, but the products of the stakeholder group would be created through a transparent, collaborative, and consensus-driven process.
• Dashboard: We support the requirement of both a quarterly “dashboard” and “annual summary”. A dashboard should provide a program-by-program snapshot of key activities, such as participation numbers and program spending, in order to track how the company’s energy efficiency portfolio is progressing throughout the year. The annual summary would contain audited and finalized savings for the company’s DSM programs to ensure compliance with the GTSA and the VCEA.

If you want to dive into this a little more, you can read our expert witness’ pre-filed testimony here.