Energy Efficiency Cost-Effectiveness:
Rhode Island Practices and National Developments
Docket 4600 Stakeholder Workgroup
Meeting #3
September 23, 2016
Tim Woolf
Synapse Energy Economics
Outline
1. Current EE cost-effectiveness practice in Rhode Island
2. National developments on EE cost-effectiveness
 National Efficiency Screening Project
 National Standard Practice Manual
3. New proposals for EE cost-effectiveness in Rhode Island
Tim Woolf – Synapse Energy Economics
Slide 2
Current EE Cost-Effectiveness Standard in RI
Utility
Test
TRC
Test
Societal Cost
Test
Avoided Energy Costs
Yes
Yes
Yes
Avoided Capacity Costs
Yes
Yes
Yes
Avoided Transmission and Distribution Costs
Yes
Yes
Yes
Wholesale Market Price Suppression Effects
Yes
Yes
Yes
Avoided Cost of Environmental Compliance
Yes
Yes
Yes
Utility Non-Energy Benefits
Yes
Yes
Yes
Participant Non-Energy Benefits
---
Yes
Yes
Societal Benefits (e.g., environment, jobs)
---
---
Yes
Program Administrator Costs
Yes
Yes
Yes
EE Measure Cost: Program Financial Incentive
Yes
Yes
Yes
EE Measure Cost: Participant Contribution
---
Yes
Yes
Societal Costs
---
---
Yes
Energy Efficiency Program Benefits:
Energy Efficiency Program Costs:
For Most EE
For CHP
Slide 3
National Efficiency Screening Project
• Mission:

The purpose of this project is to improve efficiency screening
practices throughout the United States, and to help inform
decision-makers regarding which efficiency resources are in the
public interest and what level of investment is appropriate
• Members: a variety of efficiency advocates, environmental
advocates, consumer advocates, and a utility.

Additional members welcome
• Initiatives:
State Campaigns
 National Standard Practice Manual

• More information:

http://www.nationalefficiencyscreening.org/
Tim Woolf – Synapse Energy Economics
Slide 4
National Standard Practice Manual
• Update and expand upon the CA Standard Practice Manual
that is used throughout the US and Canada.
• Steering Committee:
 Staff from E4TheFuture and Home Performance Council
• Drafting Committee:
 Tim Woolf (Synapse), Chris Neme (Energy Futures), Marty
Kushler (ACEEE), Steve Schiller (consultant), Tom Eckman
(retired-NWPPC)
• Review Committee: Forty efficiency experts from a variety
of organizations.
Tim Woolf – Synapse Energy Economics
Slide 5
NSPM – Key Principles
• Efficiency as a Resource. Energy efficiency is one of many resources that can be
deployed to meet customers’ needs, and therefore should be compared with
alternative energy resources (both supply-side and demand-side) in a consistent and
comprehensive manner.
• Energy Policy Goals. Energy efficiency assessment practices should account for the
energy policy goals of each jurisdiction, as articulated in legislation, commission
orders, regulations, guidelines, and other policy directives.
• Symmetry. Efficiency assessment practices should be symmetrical, for example by
including both costs and benefits for each relevant type of impact.
• Hard-to-Quantify Impacts. Efficiency assessment practices should account for all
relevant, important impacts, even those that are difficult to quantify and monetize.
• Transparency. Efficiency assessment practices should be completely transparent, and
should fully document and reveal all relevant inputs, assumptions, methodologies,
and results.
Tim Woolf – Synapse Energy Economics
Slide 6
NSPM – Key Concepts
• States do not need to be confined to the three standard tests:
Utility, TRC, or Societal.
• Instead states can develop a test that:
Complies with the cost-effectiveness principles above, and
 Meets the energy policy goals of the state.

• Each state’s test must, at a minimum, include utility system
costs and benefits. Then decide what to add to that:
Participant impacts?
 Other fuel impacts?
 Environmental impacts?
 Economic development impacts?

• The NSPM concepts and principles can be applied to any type of
resource: demand-side or supply-side.
Tim Woolf – Synapse Energy Economics
Slide 7
NSPM – Additional Elements
• Accounting for risk
• Discount rates
• Accounting for hard-to-quantify impacts
• Free-riders and spillover
• Additional considerations (e.g., equity)
• Applying and presenting the results
• Accounting for rate and bill impacts
Tim Woolf – Synapse Energy Economics
Slide 8
NSPM Timeline
• Project commenced in early 2016
• Review Draft provided to the Review Committee on Oct 15.
• Review Committee will provide input to the Drafting
Committee
• Final report released April 2017.
Tim Woolf – Synapse Energy Economics
Slide 9
Proposals to Modify the EE Cost-Effectiveness in RI
• Make the standards consistent across EE, CHP, and SRP.
• Include additional benefits:
 Improved reliability
 Revenues from grid resources
 Avoided GHG emissions
 Other environmental externalities
 Economic development benefits
 Site-specific or option-specific benefits
Tim Woolf – Synapse Energy Economics
Slide 10
Contact Information
Tim Woolf
Vice President
Synapse Energy Economics
617-453-7031
[email protected]
www.synapse.energy.com
Tim Woolf – Synapse Energy Economics
Slide 11