Minnesota s Utility Conservation Programs: Past, Present, Future. Joe Plummer

Transcription

1 Minnesota s Utility Conservation Programs: Past, Present, Future Joe Plummer

2 Topics History of Conservation Improvement Program How CIP Works Next Generation Energy Act Achievements to Date Programs and Technologies Deployed Cost of Efficiency 2013 Legislation Looking Ahead: Challenges & Opportunities

3 History of CIP 1980: PUC directed to initiate a pilot to demonstrate the feasibility of investments in EE 1989: All Public utilities were required to operate conservation improvement programs. Oversight transferred from PUC, low-income requirements added. 1991: A specific level of spending was required (1.5% electric, 0.5% gas) & munis and coops were included. 2007: Next Generation Energy Act 1983: Utilities with revenues greater than $50 million were required to operate at least 1 conservation program. Required significant investment. 1994: Prairie Island settlement required [Xcel] to spend 2.0% of their annual GOR. Programs began to be evaluated against a pre-set goal. 2010: 1.5% Savings Goal for Utilities takes Effect

4 How CIP Works Utility-administered Incentives Technical assistance MN Department of Commerce approves plans and savings MN Public Utilities Commission approves cost recovery, performance incentives

5 Cost-Effectiveness is Key Each program and portfolio is subject to benefit-cost tests NPV Benefits NPV (Costs) Or NPV (Benefits) 1 NPV (Costs) Benefits: Energy savings O&M savings Avoided infrastructure Avoided emissions Costs: Program Costs Incremental Equipment Cost

6 Next Generation Energy Act 1.5% annual savings goal for all utilities* Adjustable to 1% by commissioner Supply side allowance above 1% Electric utility infrastructure improvements** Waste heat to electricity generation** Small scale renewable energy * Small municipal gas utilities with sales of 1 billion CF exempted from CIP. ** Policies under development

7 Expenditures ($1M) Incremental Savings (GWh/year) Electric Savings $ % goal in Effect 1.6% 1,000 $180 $ % $140 $120 $100 $80 $60 $40 $20 $0 Next Generation Energy Act Passed Expenditures Savings

8 Expenditures ($1M) Incremental Savings (Bcf/yr) Gas Savings $45 $40 $35 $30 Next Generation Energy Act Passed 0.75/1.00% goals In effect 0.9% 1.0% $ $20 $ $ $5 $ Expenditures Savings

9 Incremental CO2 Savings (tons/yr) CO 2 Reductions 1,200,000 1,000, , , , , Electric Gas

10 $/kwh-annual % of Total Annual Savings Programs & Technologies 2011 Electric CIP Data Load Mgmt, Indirect Impact excluded Lighting = 44% of Total 30% 25% 20% 15% 10% 5% 0% $/kwh-annual % of Total Annual Savings Cost-Effectiveness

11 $/MCF-annual % of Total Annual Savings Programs & Technologies 2011 Gas CIP Data Indirect Impact excluded % 40% 35% 30% 25% 20% 15% 10% 5% 0% $/MCF-annual % of Total Annual Savings Cost-Effectiveness

12 2011 $/MWh Cost of Efficiency Levelized Cost Comparison $250 $ $200 $150 $ $100 $67.10 $86.60 $ $50 $21.43 $- CIP CC Wind Coal CT Solar Minimum Average Maximum Source: US EIA Annual Energy Outlook 2013, MN Dept of Commerce ( CIP data)

13 2013 Legislation HF 729 energy provisions Focus on renewable energy/distributed generation policies Solar standard, net metering, value of solar tariff Many studies Energy efficiency provisions

14 2013 Legislation Minn. Stat. 216B.2401 Amended by Article 12, Sec. 2 of HF 729 (4 th Engross.) Energy Savings Policy Goal. The legislature finds that energy savings are an energy resource, and that cost-effective energy savings are preferred over all other energy resources Therefore, it is the energy policy of the state of Minnesota to achieve annual energy savings equal to at least 1.5% of annual retail energy sales of electricity and natural gas through cost-effective energy conservation improvement programs and rate design, energy efficiency achieved by energy consumers without direct utility involvement, energy codes and appliances, programs designed to transform the market or change consumer behavior, energy savings resulting from efficiency improvements to the utility infrastructure and system, and other efforts

15 2013 Legislation Minn. Stat. 216C.05 Amended by Article 12, Sec. 3 of HF 729 (4 th Engross.) Energy Policy Goals. It is the energy policy of the state of Minnesota that: 1. Annual energy savings equal to at least 1.5% of annual retail energy sales be achieved through cost-effective energy efficiency; 2. The per capita use of fossil fuel as an energy input be reduced by 15% by the year 2015, through increased reliance on energy efficiency and renewable energy 3. 25% of the total energy used in the state be derived from renewable energy resources by the year 2025.

16 2013 Legislation Energy Savings Goal Study (Art. 12, Sec. 8 of HF 729, 4 th Engross.) Commerce to lead a stakeholder process with subsequent report to Legislature by Jan 15, 2014 Topics include, but are not limited to: Clarifying energy savings policies Industrial energy efficiency Funding sources for non-conservation projects Determining appropriate incentives to meet goals

17 2013 Legislation Minn. Stat. 216B.241 Amended by Art. 13, Sec. 4 of HF 729 (4 th Engross.) to add: Demand side natural gas or electric energy displaced by use of waste heat recovered and used as thermal energy, including the recovered thermal energy from a cogeneration or combined heat and power facility, is eligible to be counted towards a utility's natural gas or electric energy savings goals, subject to [Commerce] approval.

18 Looking Ahead Challenges Workforce/Training Codes and Standards Cost CIP Exemptions

19 Looking Ahead Opportunities Combined Heat & Power Data Analytics Codes and Standards? Energy Feedback Multifamily Buildings LEDs

20 How do we maintain the momentum?

21 Thank you! Joe Plummer, MS, CEM Minnesota Department of Commerce Division of Energy Resources