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.