Demand-Side Management and Energy Efficiency in Florida

Transcription

1 Demand-Side Management and Energy Efficiency in Florida Presentation to the National Association of Energy Service Companies Judy G. Harlow Director, Division of Economics Florida Public Service Commission November 1, 2018

2 Outline Energy demand in Florida FPSC energy efficiency and demand-side management (DSM) authority FPSC energy efficiency principles Goal setting and program approval Program cost recovery FPSC consumer outreach 2

3 Overview Primary drivers Building Codes, efficiency standards and technological improvements Customer actions Utility-sponsored programs FPSC has a role in two of these areas Statutory authority to set utility goals, approve utility programs and cost recovery Informing consumers 3

4 Energy Demand in Florida Customer base heavily weighted toward residential customers Residential usage varies more throughout the day (heating and cooling) Industrial usage is more uniform High proportion of residential customers leads to more pronounced summer and winter peaks Increases the importance of peak shaving 4

5 Florida s Energy Demand 5

6 Conservation and Utility Planning Utility must determine the timing and magnitude of electricity needs Load forecast Existing generation and purchases; DSM DSM that reduces peak demand (kw) Reduces capital costs by deferring new generation DSM that reduces energy usage (kwh) Reduces dispatch of existing facilities Reduces fuel and O&M costs Can change the type of next unit 6

7 Energy Efficiency and DSM Activities of the FPSC 7

8 FPSC Jurisdiction Florida Energy Efficiency and Conservation Act (FEECA) enacted in 1980 Places emphasis on reducing growth rates of peak demand and energy consumption Requires FPSC to adopt conservation goals Authorized FPSC to require each utility to develop plans and implement cost-effective programs to meet goals 8

9 FPSC Jurisdiction Seven utilities subject to FEECA All 5 investor-owned utilities (IOUs) 2 largest municipal utilities (sales threshold) These 7 utilities comprise 83.9% of sales FEECA Utilities Energy Sales (GWh) % of Total Energy Sales Florida Power & Light 108, Duke Energy Florida 38, Tampa Electric Company 19, Gulf Power Company 10, Florida Public Utilities JEA 12, Orlando Utilities Commission 6, FEECA Utilities Total 196,

10 FPSC Energy Efficiency Principles FPSC has approved energy efficiency (EE) and DSM principles based on its statutory authority Improving EE usage is an important first step in meeting energy needs of Florida s citizens EE should be promoted by all levels of government and include: Building codes and appliance efficiency standards Utility-sponsored programs Research and development Energy education 10

11 FPSC Energy Efficiency Principles Public education is key to promoting wise energy use in Florida Continued focus should be placed on increasing efficiency of buildings and appliance stock Utility-sponsored DSM programs are aimed at Avoiding or deferring generating capacity Increasing efficiency at existing plants Reducing fossil fuel use 11

12 FPSC Energy Efficiency Principles In determining scope of utility-sponsored DSM goals and programs, the FPSC must: Balance quantifiable benefits with utility program costs While taking rate impact for both program participants and non-participants into consideration Utility programs should facilitate installation of appliances and building envelope improvements that exceed standards and code 12

13 FPSC Implementation of FEECA FPSC rules require numeric goals for each FEECA utility FPSC sets 3 goals: winter demand, summer demand, annual energy usage Goals revised at least every 5 years After goals are set, utilities submit plans and programs for review Programs must be cost-effective Except energy audits and R&D programs 13

14 DSM Cost-Effectiveness Tests Participant test Measures impact of program on participating customer May be used by utility as a screen Rate Impact Measure (RIM) test Indirect measure of the program s impact on rates Also called the No losers test Total Resource Cost (TRC) test Measures net costs of a program based on total program costs for utility and participants 14

15 Summary of Cost-Effectiveness Tests Benefits Participant RIM TRC Bill Reduction Incentives Received X X Avoided Generation X X Avoided Transmission X X Fuel Savings X X Costs Program Costs X X System Fuel Cost Increase Incentives Paid Lost Revenues X X X X Participant s Costs X X 15

16 DSM Goals/Program Approval Criteria FEECA utilities must file, at a minimum: Participant test RIM test TRC test Historically, FPSC has approved goals and programs that benefit all ratepayers RIM test ensures all ratepayers benefit both participants and non-participants 16

17 DSM Goals/Program Approval Criteria DSM programs are focused on prompting savings incremental to savings from EE codes and standards FPSC endeavors to minimize number of participants that would have installed an EE device without an incentive FPSC has also required utilities to increase focus on low income customers 17

18 Approved Utility DSM Programs Florida s IOUs offer programs addressing: Energy audits (required by statute) Consumer education Efficient heating and cooling systems Duct repair and insulation Window replacement Low-income weatherization Efficient lighting New construction Load control Research and development 18

19 DSM Program Cost Recovery FEECA provides for DSM program cost recovery for IOUs Costs recovered through Energy Conservation Cost Recovery Clause (ECCR) FPSC audits costs each year Costs must be reasonable and prudent Annual public hearing held to review costs and set a rate applied to customer bills 19

20 DSM Program Cost Recovery In the past 10 years, IOUs have recovered $3.9 billion in DSM-related costs through the ECCR clause Utility 2018 Residential ECCR Factor ( /kwh) Monthly Bill Impact (per 1,000 kwh) Florida Power & Light $1.53 Duke Energy Florida $3.28 Tampa Electric $2.46 Gulf Power $1.40 Florida Public Utilities $

21 FPSC Consumer Outreach FPSC complements utility DSM efforts with its own conservation-related activities FPSC uses a variety of tools, including: FPSC website Public events Brochures distributed in schools and libraries Press releases Social media 21

22 Questions? Judy G. Harlow 22