DSM Plan 2016-­‐18 Energy Efficiency and Demand Response Initiatives DECEMBER 2015 i DSM PLAN 2016-­‐18 Energy Efficiency and Demand Response Initiatives PREPARED BY: NB Power 515 King St. Fredericton, NB E3B 6G3 www.nbpower.com WITH SUPPORT FROM: Philippe Dunsky Bruno Gobeil, CMVP François Boulanger Jérôme Bilodeau, ing. Brent Langille Dunsky Energy Consulting 50 Ste-­‐Catherine W., suite 420 Montreal, QC H2X 3V4 www.dunsky.com DSM PLAN DEVELOPMENT: The DSM Plan 2016-­‐18 was developed in partnership between NB Power and the Dunsky Energy Consulting staff members listed above. NB Power provided general direction, program design inputs, data, and expertise to the process, while members of the Dunsky team contributed program development expertise, technical support, and recommendations where applicable. Cover photo: “Power mast framework” by Markus Grossalber (https://www.flickr.com/photos/tschiae/), creative commons. ii TABLE OF CONTENTS 1 PLAN OVERVIEW .......................................................................................................................................... 1 1.1 INTRODUCTION ........................................................................................................................................... 1 1.2 PLAN HIGHLIGHTS ........................................................................................................................................ 2 1.2.1 Key Features ............................................................................................................................................ 2 1.2.2 Mutli-­‐Fuel/Fuel switching ........................................................................................................................ 3 1.2.3 Budget ..................................................................................................................................................... 4 1.2.4 Energy and winter peak savings .............................................................................................................. 5 1.2.5 Benefits .................................................................................................................................................... 6 1.2.6 Cost-­‐effectiveness .................................................................................................................................... 6 1.2.7 Pilots ........................................................................................................................................................ 6 2 RESIDENTIAL STRATEGY ............................................................................................................................... 7 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 3 COMMERCIAL & INDUSTRIAL STRATEGY .................................................................................................... 18 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 4 OVERVIEW ................................................................................................................................................. 18 LED STREET LIGHTING ..................................................................................................................................... 19 COMMERCIAL RETROFIT ................................................................................................................................... 20 SMB COMMERCIAL DIRECT INSTALL ................................................................................................................... 21 SMB COMMERCIAL SMART DEVICES PILOT ......................................................................................................... 22 LARGE COMMERCIAL FAST DR PILOT .................................................................................................................. 23 SMB INDUSTRIAL PRESCRIPTIVE ........................................................................................................................ 25 SMB INDUSTRIAL FAST DR PILOT ...................................................................................................................... 26 LARGE INDUSTRIAL CUSTOM ............................................................................................................................. 27 ENABLING STRATEGIES ............................................................................................................................... 28 4.1 4.2 4.3 4.4 5 OVERVIEW ................................................................................................................................................... 7 MASS-­‐MARKET ENERGY EFFICIENT PRODUCTS ....................................................................................................... 8 SMART THERMOSTATS PILOT .............................................................................................................................. 9 DOMESTIC HOT WATER PILOT .......................................................................................................................... 11 RESIDENTIAL HOME RETROFIT + DIRECT INSTALL .................................................................................................. 13 ENERGY STAR MOST EFFICIENT DUCTLESS HEAT PUMP ...................................................................................... 14 HOME ENERGY REPORT ................................................................................................................................... 15 DEMAND RESPONSE ALERTS PILOT ..................................................................................................................... 16 TIME-­‐BASED PRICING PILOT ............................................................................................................................. 17 OVERVIEW ................................................................................................................................................. 28 PLANNING & REGULATORY ........................................................................................................................ 29 MARKET TRANSFORMATION ..................................................................................................................... 29 EVALUATION, MEASUREMENT & VERIFICATION (EM&V) .......................................................................... 30 COST-­‐EFFECTIVENESS ANALYSIS ................................................................................................................. 31 5.1 5.2 5.3 5.4 METHODOLOGY ......................................................................................................................................... 31 TEST VARIABLES ......................................................................................................................................... 32 KEY ASSUMPTIONS .................................................................................................................................... 32 RESULTS ..................................................................................................................................................... 34 APPENDIX A: NB GOVERNMENT LOW-­‐INCOME PROGRAM ................................................................................. 36 APPENDIX B: EM&V PLAN ................................................................................................................................... 37 APPENDIX C: COMPARISON BETWEEN FINAL DSM PLAN BUDGETS AND DSM BUDGETS USED TO DETERMINE THE REVENUE REQUIREMENT .................................................................................................................................. 388 iii LIST OF TABLES Table 1: Summary of programs and activities .............................................................................................. 3 Table 2: Overview of budget by strategy, millions ....................................................................................... 4 Table 3: Overview of DSM energy and peak savings .................................................................................... 5 Table 4: Cost-­‐effectiveness by sector ........................................................................................................... 6 Table 5: Overview of residential DSM initiatives ......................................................................................... 7 Table 6: Savings and investments for mass-­‐market energy efficient products program ............................. 8 Table 7: Savings and investments for smart thermostat pilot ................................................................... 10 Table 8: Savings and investments for domestic hot water heater pilot ..................................................... 12 Table 9: Savings and investments for residential home retrofit + direct install program* ........................ 13 Table 10: Savings and investments for ENERGY STAR Most Efficient HP program .................................... 14 Table 11: Savings and investments for home energy report program ....................................................... 15 Table 12: Savings and investments for demand response alerts pilot ....................................................... 16 Table 13: Savings and investments for time-­‐based pricing pilot ................................................................ 17 Table 14: Overview of commercial & industrial DSM initiatives ................................................................ 18 Table 15: Savings and investments for LED street lighting program .......................................................... 19 Table 16: Savings and investments for Commercial Retrofit program* .................................................... 20 Table 17: Savings and investments for SMB Commercial Direct Install program ...................................... 21 Table 18: Savings and investments for SMB Commercial Smart Devices Pilot .......................................... 22 Table 19: Savings and investments for Large Commercial Fast DR pilot .................................................... 24 Table 20: Savings and investments for SMB Industrial Prescriptive program ............................................ 25 Table 21: Savings and investments for SMB Industrial Fast DR pilot ......................................................... 26 Table 22: Savings and investments for Large Industrial Custom program ................................................. 27 Table 23: Enabling strategy budgets .......................................................................................................... 28 Table 24: Variables for cost-­‐effectiveness analysis ................................................................................... 32 Table 25: Avoided costs and peak period shifting values .......................................................................... 33 Table 26: Cost-­‐effectiveness analysis: the Utility & Ratepayers Perspective (PAC) ................................... 34 Table 27: Cost-­‐effectiveness analysis: the Participants’ Perspective (PT) .................................................. 35 Table 28: Savings and investments for low-­‐income energy efficiency program* ...................................... 36 Table 29: FY15-­‐16 DSM Plan versus the FY15-­‐16 Budget ........................................................................... 38 Table 30: FY16-­‐17 DSM Plan versus the FY16-­‐17 Budget ........................................................................... 39 Table 31: FY17-­‐18 DSM Plan versus the FY17-­‐18 Budget ........................................................................... 40 Table 32: Comparison of Annual Cumulative Energy and Winter Peak Savings ........................................ 41 LIST OF FIGURES Figure 1: Impact overview of enabling strategies ...................................................................................... 28 iv 1 PLAN OVERVIEW 1.1
INTRODUCTION In its 2014 Integrated Resources Plan (IRP), NB Power stressed the pivotal role that demand-­‐side management (DSM) resources, such as energy efficiency and demand response programs, can play in meeting New Brunswick’s future power needs. These programs, the IRP emphasized, can not only help reduce demand, but also shift loads off-­‐peak, to the benefit of the utility (e.g. avoided generation and capacity costs, higher overall efficiency), ratepayers (lower energy consumption and bills) and the environment. KEY TERMS This plan focuses on two categories of initiatives, aimed at reducing both energy and peak capacity needs • “Energy efficiency (EE)” refers to initiatives that are focused on reducing loads, whether through more energy efficient technologies (e.g. efficient equipment, lighting, motors, and building envelopes) or through energy-­‐conserving behaviour (e.g. switching off lights when leaving a room). While focused on energy savings, it is noteworthy that EE typically generates both energy and peak capacity savings. • “Demand response (DR)” refers to initiatives that are focused on shifting loads, whether through more peak-­‐efficient technologies (e.g. three-­‐plate water heaters that distribute loads more evenly), customer-­‐driven actions (e.g. responding to price signals by programming a dishwasher to launch outside of peak hours), or through NB Power-­‐driven actions (e.g. controlling Smart DWH during the critical hours of the system). With some exceptions, DR typically generates only capacity This is NB Power’s first DSM Plan. In it, we propose a portfolio of EE and DR initiatives—from incentives to direct installations and pilots—for the FY2016-­‐18 timeframe (2015-­‐16, 2016-­‐17, and 2017-­‐18 are referred to as FY2016, FY2017, and FY2018 throughout the document), along with enabling activities. More specifically, the DSM Plan is structured as follows: SECTION 2 – RESIDENTIAL STRATEGY This section presents a description of the Residential Strategy, including a detailed description of each of the eight programs and pilots, from program priorities to energy savings, cost effectiveness, and investments. SECTION 3 – COMMERCIAL & INDUSTRIAL STRATEGY This section presents a description of the Commercial & Industrial Strategy, including a detailed description of each of the eight programs and pilots, from program priorities to energy savings, cost effectiveness, and investments. SECTION 4 – ENABLING STRATEGY This section presents a description of the Enabling Strategy, including a detailed description of associated activities and investments. SECTION 5 – COST-­‐EFFECTIVENESS ANALYSIS This section offers a detailed cost-­‐effectiveness analysis for each program, relying on the Program Administrator Cost (PAC) test. 1 Appendices are also provided at the end of the document: APPENDIX A – Low-­‐Income Program A short description of the New Brunswick government’s Low-­‐Income program, along with its associated electric program investments and savings. APPENDIX B – EM&V PLAN The evaluation, measurement and verification (EM&V) plan for the portfolio of programs contained in this Plan. 1.2
PLAN HIGHLIGHTS This section offers an overview of the programs and activities that NB Power is planning to undertake in the FY2016-­‐18 period. A more detailed description—along with savings, cost-­‐effectiveness and budgets—is available in Sections 2 to 5 and the Appendices. 1.2.1 Key Features As of the summer of 2015, NB Power offered five energy efficiency programs: • Mass-­‐market products; • Home retrofit (including direct install); • LED street lighting; • Commercial retrofit; and • Low Income (on behalf of the provincial government). Building on the success of these programs, the utility plans to launch several energy efficiency and demand response programs over the next two years, including pilots that would test innovative “smart” demand response technologies and strategies. These cover Residential, Commercial & Industrial, and Enabling activities, as illustrated in Table 1 on the next page. Based on sound management practices, the plan will be re-­‐visited on a regular basis by assessing program results and market conditions, and by seizing new opportunities that may arise. The Plan’s success will require a flexible approach to implementation, notably with respect to demand response initiatives since they are linked, to some extent, to the deployment timeline and scope of available Smart Grid technologies. 2 Table 1: Summary of programs and activities 1.2.2 Multi-­‐Fuel/Fuel switching This Plan only details the budgets and energy and demand savings associated with electricity. However, for Year 1 of the plan (i.e. FY2016), the Home Retrofit, Commercial Retrofit (Energy Smart), and Low-­‐
Income Programs encourage multi-­‐fuel measures thanks to bridge funding provided by the Government of New Brunswick. Starting in Year 2 (i.e. FY2017), only the Low-­‐Income program will be funded by the Government of New Brunswick and delivered as a multi-­‐fuels program by NB Power. NB Power is open to a multi-­‐fuel approach to its DSM portfolio should there be support from government or from a third party. Over the years, some steps in this area were undertaken: • In 2007, Efficiency New Brunswick issued an RFP for a partnership with non-­‐electric resistance heating suppliers and installers, with the goal of offering financial incentives to homeowners willing to convert their electric baseboard space heating system to alternate fuels and systems. The outcome of the RFP was the development of a pilot program offering financial incentives to convert up to 300 electric baseboard heated homes to natural gas heating systems. Up to $10,000 in incentives were offered to eligible customers to participate in the pilot. The pilot was discontinued in March 2009 due to low uptake. The main reason identified for the low uptake was the higher than expected cost of conversion, resulting in an average payback of 15 years for participants. • NB power is incentivizing high efficiency, cold climate ductless heat pumps. These systems provide a quicker payback and more energy savings (than a fuel switching strategy thus providing better value to customers. • As more economically viable distributed renewables (e.g. solar PV, ground source heat pumps, wood pellets) enter the New Brunswick market, NB Power will evaluate the cost and benefits of switching its customers away from electricity on a case-­‐by-­‐case basis. • Starting in April 2016, many of NB Power’s DSM programs related to heating savings (e.g. Home Retrofit Program) will be offered only to electrically heated homes/buildings. NB Power is open to offering multi-­‐fuels DSM programs in partnership with non-­‐electric fuel providers. 3 1.2.3 Budget The three-­‐year budget for this DSM Plan is presented in the table below: Table 2: Overview of budget by strategy, millions STRATEGY FY2016 FY2017 FY2018 3-­‐YR TOTAL Residential* Commercial & Industrial Enabling TOTAL* $7.2 $9.1 $1.2 $17.5 $11.1 $11.0 $1.9 $24.0 $13.9 $7.1 $2.0 $23.0 $32.2 $27.2 $5.1 $64.5 Note: totals may not reflect sum of individual line items due to rounding. * Excludes the Low-­‐Income program, which is funded by the NB government for the entire period. In building its portfolio of DSM investments, NB Power took into account the following key considerations: • Efficiency New Brunswick (ENB): Effective April 2015, ENB employees and ENB’s residential and commercial programs and awareness activities were transferred to the utility. • Existing Infrastructure: In developing its DSM Plan, the utility leveraged to the extent possible the existing infrastructure associated with the DHW Heater Leasing Program and the Smart Grid Initiative, in order to deliver greater value to customers while reducing DSM overhead costs. • Market Transformation: While recognizing the importance of initiatives that could lead to important short-­‐term program savings and success, NB Power also invested in long-­‐term market transformation or enabling strategies, such as education and awareness initiatives, to create lasting and permanent behavioural change in customers and market actors, and to accelerate the adoption of energy conservation products and services as a matter of standard practice. • Cost-­‐Effectiveness: In designing its DSM portfolio, NB Power paid particular attention to ensuring that the Plan is cost-­‐effective for both the utility and participants. • Accessibility: This plan strives to ensure that as many of our customers as possible can benefit from DSM. As such, we have tailored programs to the specific needs and barriers of a variety of clients, including small businesses that are typically considered hard to reach. A few elements are also worth noting, notably: • Funding from provincial government: As noted in the previous section, the provincial government is fully funding the Low-­‐income program, and also provides funding for the non-­‐
electric portion of Residential Home Retrofit and Commercial Retrofit programs until the end of FY2016. • Programs vs pilots: The majority of spending is associated with programs ($53.7M over three years, including associated enabling activities). Additional spending on pilots ($10.6M over three years, including associated enabling activities) is designed to test demand response initiatives in the New Brunswick market before market-­‐wide launch. 4 1.2.4 Energy and winter peak savings This portfolio of energy efficiency and demand response programs is expected to yield the following energy and winter peak capacity savings across the province of New Brunswick: Table 3: Overview of DSM energy and peak savings INITIATIVE RESIDENTIAL INITIATIVES Products Mass-­‐Market Energy Efficient Products Smart Thermostats Domestic Hot Water Pilot Home retrofit Residential Home Retrofit + Direct Install* ENERGY STAR Most Efficient Ductless Heat Pumps Behaviour Home Energy Report Demand Response Alerts Time-­‐Based Pricing COMMERCIAL & INDUSTRIAL INITIATIVES Commercial LED Street Lighting Commercial Retrofit** SMB Commercial Direct Install SMB Commercial Smart Devices Large Commercial Fast DR Industrial SMB Industrial Prescriptive SMB Industrial Fast DR Large Industrial Custom TOTAL PORTFOLIO Energy efficiency Demand response Type Status Annual Cumulative Energy Savings in FY2018 (GWh***) EE DR DR EE EE EE DR DR EE EE EE DR DR EE DR EE EE DR Existing Pilot Pilot Existing New New Pilot Pilot Existing Existing New Pilot Pilot New Pilot New New, Existing Pilots 85.7 23.9 2.8 0.0 20.4 10.2 28.2 0.0 0.2 66.4 12.8 9.5 5.7 0.0 3.5 2.2 0.2 32.6 152.1 145.3 6.8 Annual Cumulative Winter Peak Savings in FY2018 (MW***) 38.0 7.2 7.0 4.8 9.1 0.9 6.2 2.1 0.7 22.7 3.0 1.2 0.8 1.0 11.6 0.5 0.7 3.9 60.6 32.7 27.9 Note: totals may not reflect sum of individual line items due to rounding. * Residential Home Retrofit program: insulation portion funded by the New Brunswick government for the year FY2016 only. ** Fully funded by the New Brunswick government for only the year FY2016. *** GWh and MW at generator (i.e. line losses are included). Note: totals may not reflect sum of individual line items due to rounding. Definitions: SMB commercial: < 300 MWh/yr; SMB industrial: < 2 MW This portfolio achieves considerable savings, notably through new initiatives, by: 1) capturing conservation measures from a cross-­‐section of New Brunswick’s economy; and 2) using a variety of tools, from incentives to direct install, behavioural tools, and pilots. It is worth noting that energy efficiency measures do not only result in energy savings, but also in winter capacity savings. 5 1.2.5 Benefits The DSM Plan will result in significant economic, social, and environmental benefits, notably: • Total electricity savings of 152.1 GWh over FY2016-­‐18, equivalent to the average annual consumption of more than 10,000 New Brunswick households. • Capacity savings of 60.6 MW by FY2018. • A benefit to cost ratio of more than 4:1 for participants, and more than 2:1 for NB Power. • Improved comfort in homes and commercial buildings. • Enhance the province’s DSM products and services industry. • Nearly 70,000 tonnes of CO2e emissions reduced over FY2016-­‐2018, equivalent to removing nearly 15,000 cars from the road for one year. 1.2.6 Cost-­‐effectiveness In order to assess the cost-­‐effectiveness of the DSM Plan, NB Power used two standard screening tests: the Program Administrator Cost (PAC) test, and the Participant Test (PT). While the former reflects the perspective of NB Power and its ratepayers (by comparing NB Power savings due to DSM with our investment in it), the latter reflects the perspective of program participants (chiefly their investments versus bill savings). Table 4 provides results for each sector: Table 4: Cost-­‐effectiveness by sector SECTOR Residential* Commercial & Industrial Benefits ($M) 72.1 46.1 PAC Costs B/C ($M) ($M) 34.8 16.2 37.3 29.9 PT B/C (ratio) Benefits ($M) Costs ($M) B/C ($M) B/C (ratio) 2.1 2.8 90.0 35.9 21.8 7.9 68.2 28.0 4.1 4.6 * Excludes Low Income program, which is fully funded by the New Brunswick government over the period. Note: all dollar figures were discounted to the year FY2016. The PAC was used as the primary test of NB Power’s DSM investments because it provides the clearest, most accurate depiction of the value generated for ratepayer dollars invested. The test was applied as a screen at the sector level in order to avoid cross-­‐subsidization between sectors. PAC results were also assessed at the program level, for information purposes. The portfolios of programs for both sectors are cost-­‐effective, with positive B/C ratios for both NB Power and participants. Section 5 details the cost-­‐effectiveness methodology employed, and presents benefit/cost ratios for each program, along with the overall ratio for the sector. The rationale for using the PAC as the primary test can also be found in Section 5. 1.2.7 Pilots NB Power has gained some experience with DSM programs over the years, and will further benefit from decades of experience associated with programs delivered by many of our counterparts across North America. Still, this DSM Plan represents a major step change for NB Power, in particular in its integration of demand response opportunities. Accordingly, it contains a number of pilots aimed at testing demand response measures in the New Brunswick market prior to market-­‐wide launch. These pilots represent an integral part of NB Power’s measured approach to DSM, balancing appropriate caution in the short-­‐
term, with development of forward-­‐looking opportunities that can support our long-­‐term vision. This balance of pilot efforts and tried-­‐and-­‐true programs results in a portfolio that is cost-­‐effective for our ratepayers, and that sets a foundation for the next iteration of this plan to build upon. 6 2 RESIDENTIAL STRATEGY 2.1
OVERVIEW The Residential Strategy consists of a portfolio of programs (including pilots), broadly categorized as Products programs (incentives for select efficient and/or smart products), Home retrofit programs (support for home-­‐scale retrofits), and Behaviour programs (activities which encourage a change in behaviour toward more efficient and/or off-­‐peak energy consumption). The table below lists each program, along with its broad type (EE or DR), the total budget associated with it for the FY2016-­‐18 period, cumulative energy savings (GWh) for the FY2016-­‐18 period, and the cumulative peak savings (MW) for the FY2016-­‐18 period. Not surprisingly, energy efficiency programs account for the bulk (96%) of energy savings. These programs also account for nearly 60% of the sector’s winter peak savings, the remainder coming from demand response initiatives. Table 5: Overview of residential DSM initiatives INITIATIVE Type Status EE DR DR EE EE EE DR DR EE DR Existing Pilot Pilot Products Mass-­‐Market Energy Efficient Products Smart Thermostats Pilot Domestic Hot Water Pilot Home retrofit Residential Home Retrofit + Direct Install * ** ENERGY STAR Most Efficient Ductless Heat Pumps Behaviour Home Energy Report Demand Response Alerts Pilot Time-­‐Based Pricing Pilot TOTAL RESIDENTIAL INITIATIVES Energy efficiency Demand response Existing New New Pilot Pilot New, Exiting Pilots Total Budget FY2016-­‐18 ($M) Annual Cumulative Energy Savings in FY2018 (GWh***) 5.7 3.4 2.8 11.5 4.6 3.5 0.2 0.4 32.1 25.2 6.8 23.9 2.8 0.0 20.4 10.2 28.2 0.0 0.2 85.7 82.6 3.0 Annual Cumulative Winter Peak Savings in FY2018 (MW***) 7.2 7.0 4.8 9.1 0.9 6.2 2.1 0.7 38.0 23.3 14.6 * Only electric budgets and savings are shown here. ** The insulation portion of the Residential Home Retrofit + Direct Install program is funded by the New Brunswick government for the year FY2016 only. *** GWh and MW at generator (i.e. line losses are included). Note: totals may not reflect sum of individual line items due to rounding. Key features and benefits for each of these initiatives are described below, along with associated savings and investments. 7 2.2
Mass-­‐Market Energy Efficient Products The Mass-­‐Market Energy Efficient Products program (commonly known as “Smart Habits Rebate Program”) is an existing energy efficiency program which offers financial incentives for the purchase of select energy efficient residential products since November 2013. KEY FEATURES & BENEFITS The program consists of the following key features: • Mail-­‐in rebates and point-­‐of-­‐sale discounts for a suite of energy efficient residential products, notably: o Low-­‐flow showerheads; o Programmable thermostats; o Light emitting diode (LED) lamps; o Front loading clothes washers; and o Refrigerators. • Over the next two years, these incentives will be promoted in specific time periods, such as fall and spring, through both traditional and social media. The program’s success builds upon a close partnership between NB Power and home improvement and appliance retailers across the province, to both raise awareness and engage customers to take action. In order to continue to achieve sustained savings and increase the availability of efficient products in retail stores across the province, NB Power may consider alternative program strategies, including mid-­‐stream or upstream approaches, in 2016. SAVINGS AND INVESTMENTS The table below presents the energy and capacity savings for this program over the FY2016-­‐18 timeframe, along with associated investments: Table 6: Savings and investments for mass-­‐market energy efficient products program METRIC UNITS FY2016 FY2017 FY2018 Energy savings Annual incremental energy savings Annual cumulative energy savings Peak capacity savings Annual incremental winter peak savings Annual cumulative winter peak savings Program budget GWh* GWh* MW* MW* $M 8.0 8.0 2.4 2.4 1.9 8.0 15.9 2.4 4.8 1.9 8.0 23.9 2.4 7.2 1.9 Note: totals may not reflect sum of individual line items due to rounding. * GWh and MW at generator (i.e. line losses are included). 8 2.3
Smart Thermostats Pilot The Smart Thermostats initiative is categorized as a new demand response pilot, which aims to test smart thermostats adapted to New Brunswick’s unique context, where baseboard-­‐heated homes are dominant. Indeed, while the past few years have seen the market arrival of a broad variety of “smart” thermostats, the vast majority work only with furnaces, boilers and heat pumps; not with the electric baseboard units that are predominant in New Brunswick. This pilot, which will begin with a field test in Fall 2015, will test both the performance and consumer acceptance of new smart thermostats designed specifically for electric baseboard heating systems. Thermostats come in a range of capabilities. Electronic thermostats are more precise than conventional bimetallic thermostats, and allow various temperature settings during the course of the day, an especially relevant feature during unoccupied periods. However, experience suggests that consumers often forego the programming capability, largely because of their perceived complexity. The next generation of electronic thermostats, commonly termed “smart”, offer a more robust set of features, including: 1) interactive programming (increasing use of programming), 2) self-­‐learning (automatically adjusting settings based on consumers’ behaviour); 3) remote control (providing consumers to control their settings remotely via computers and smart phones); 4) information (e.g. intuitive displays of energy consumption in real-­‐time); 5) enhanced feedback (encouraging customer energy management); and 6) automatic adjustments (e.g. adjusting settings based on ambient conditions like humidity). These and other features vary by make and model. These feature-­‐rich, two-­‐way communication devices can also provide NB Power with the ability to directly control loads, when consumers provide explicit permission, during critical winter peak periods, which in New Brunswick are largely linked to baseboard heating. While this initiative contains both peak and energy reduction features, we have categorized it here as a DR pilot program. KEY FEATURES & BENEFITS Building on the experience of other utilities in North America, the pilot consists of the following features: • Technical Performance: Technical capabilities of these devices will first be field tested during the 2015-­‐16 winter season, with a view to validating potential energy and peak savings compared to standard electronic thermostats. • Consumer Experience: A market pilot, starting in 2016-­‐17, will test consumer acceptance, use of and experience with smart thermostat features. It will also test consumer acceptance of direct load control (within pre-­‐defined bounds) during occasional critical peak periods. Assuming it is successful, information gathered from this phase will also help determine appropriate incentive levels going forward. • Program Rollout: Based on the findings from the technical and commercial pilots, a wider, incentive-­‐based roll-­‐out could be initiated in time for the 2017-­‐18 winter. • Participation: The cumulative number of participants is expected to amount to approximately 3500 by FY2018. By investing in this initiative, NB Power is setting the foundation for an increased role for smart technologies in the residential marketplace. 9 SAVINGS AND INVESTMENTS The table below presents the energy and capacity savings for this pilot over the FY2016-­‐18 timeframe, along with associated investments: Table 7: Savings and investments for smart thermostat pilot METRIC UNITS FY2016 FY2017 FY2018 Energy savings Annual incremental energy savings Annual cumulative energy savings Peak capacity savings Annual incremental winter peak savings Annual cumulative winter peak savings Pilot budget GWh* GWh* MW* MW* $M 0.0 0.0 0.1 0.1 0.2 0.8 0.9 2.0 2.1 0.9 1.9 2.8 4.9 7.0 2.3 Note: totals may not reflect sum of individual line items due to rounding. * GWh and MW at generator (i.e. line losses are included). 10 2.4
Domestic Hot Water Pilot The Domestic Hot Water (DHW) pilot is a new demand response pilot, which aims to test and roll-­‐out both Ecopeak and Smart DHW heaters in a New Brunswick residential setting. The program, which partly builds on the findings of the PowerShift Atlantic R&D initiative, is expected to begin in Fall 2015. This combined initiative is a pilot in support of NB Power’s long-­‐term vision for a highly connected utility. The pilot touches on two domestic hot water heater technologies: Ecopeak DHW heaters, and Smart DHW heaters. Ecopeak domestic hot water heaters make use of three elements instead of the typical two, which leads to a reduction in electrical capacity without affecting customer comfort nor installing remote load control equipment, as is done with Smart water heaters. Smart domestic hot water heaters, much like smart thermostats, make use of two-­‐way communication technology to provide NB Power with the ability to control volunteer loads during the critical winter peak periods. This load control functionality allows DHW heaters to act as a distributed "battery” for storing electric energy, enabling greater integration of intermittent renewable energy resources such as solar and wind into the grid. KEY FEATURES & BENEFITS Building on the experience of other utilities in North America, the pilot consists of the following key features: • Ecopeak DHW •
o
60-­‐gallon Ecopeak DHW equipment would be offered in the context of NB Power’s Hot Water Heater Leasing Program, instead of the current model, at no additional costs to consumers. o
This initiative is expected to lead to the leasing of 250 units by end of FY2016, 1,000 units in FY2017, and 2,000 units in FY2018. Smart DHW o
The technical capabilities of these devices will be tested during the 2015-­‐16 winter season. 40-­‐gallon smart DHW equipment will be used. o
Load control functionality will be directly installed on existing DHW heaters for select customers, free of charge, through a pilot starting in 2016-­‐17 winter, aimed at testing program design features in the NB context. o
NB Power’s Hot Water Heater Leasing Program and Smart Grid infrastructure will be leveraged, in order to minimize pilot costs, increase the initiative’s cost-­‐effectiveness and increase the customer value proposition. o
It is projected that this initiative can achieve the installation of 6,200 load control, two-­‐
way communication equipment over the FY2016-­‐18 horizon. o
Similar to smart thermostats, a wider roll-­‐out could be initiated in time for the 2017-­‐18 fiscal year, assuming positive pilot results. 11 SAVINGS AND INVESTMENTS The table below presents the energy and capacity savings for this pilot over the FY2016-­‐18 timeframe, along with associated investments: Table 8: Savings and investments for domestic hot water heater pilot FY2016 METRIC Energy savings Annual incremental energy savings Annual cumulative energy savings Peak capacity savings Annual incremental winter peak savings Annual cumulative winter peak savings Pilot budget FY2018 Ecopeak Smart Ecopeak Smart Ecopeak Smart 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.0 0.0 0.2 0.2 0.0 0.0 0.0 1.3 1.3 0.8 0.0 0.0 0.3 0.5 0.1 0.0 0.0 3.0 4.3 1.8 GWh* GWh* MW* MW* $M Note: totals may not reflect sum of individual line items due to rounding. * GWh and MW at generator (i.e. line losses are included). FY2017 UNITS 12 2.5
Residential Home Retrofit + Direct Install The Residential Home Retrofit (+Direct Install) program is an existing energy efficiency program, which offers financial support to homeowners for the evaluation, planning, and undertaking of energy efficiency retrofit projects. In addition, the program offers free installation of highly cost-­‐effective products while the pre-­‐upgrade evaluation is conducted. KEY FEATURES & BENEFITS The program consists of the following key features: • Energy efficiency advice: prior to beginning its upgrades (i.e. at the stage of the pre-­‐upgrade evaluation), the homeowners will receive valuable information from NB Power’s Energy Advisor on the levels of insulation and air leakage present in their home, as well as on the energy savings opportunities suitable for their home. Once the upgrades are completed (i.e. at the stage of the post-­‐upgrade evaluation), the Energy Advisor will provide an estimate of energy savings achieved. • Home retrofit: incentives will be provided for a number of retrofit measures, including basement, attic and wall insulation as well as air sealing. • Direct installation: as pre-­‐upgrade evaluations are conducted in a participating home, cost-­‐
effective energy efficient products will be installed free of charge to homeowners. Products installed include low-­‐flow showerheads, LED lights, and water heater pipe wrap. • Participation: it is expected that 2500 electric-­‐heated homes will be evaluated for each year of the FY2016-­‐18 horizon, and that about 2000 evaluations will result in home retrofits, annually. • Cross-­‐promotion: the program will also promote the installation of ENERGY STAR Most Efficient ductless heat pumps (see Section 2.6), a sister program. Over the next three years, various activities will be undertaken by NB Power to ensure ongoing success and uptake of this home retrofit program, including marketing campaigns. SAVINGS AND INVESTMENTS The table below presents the energy and capacity savings for this program over the FY2016-­‐18 timeframe, along with associated investments. Table 9: Savings and investments for residential home retrofit + direct install program* METRIC UNITS FY2016 FY2017 FY2018 Energy savings Annual incremental energy savings Annual cumulative energy savings Peak capacity savings Annual incremental winter peak savings Annual cumulative winter peak savings Program budget*** GWh** GWh** MW** MW** $M 6.8 6.8 3.0 3.0 3.8 6.8 13.6 3.0 6.1 3.8 6.8 20.4 3.0 9.1 3.8 Note: totals may not reflect sum of individual line items due to rounding. * Only electric budgets and savings are shown here. ** GWh and MW at generator (i.e. line losses are included). *** The insulation portion of the program is funded by the New Brunswick government for the year FY2016 only. 13 2.6
ENERGY STAR Most Efficient Ductless Heat Pump The ENERGY STAR Most Efficient Ductless Heat Pump (DHP) program is a new energy efficiency program, which offers financial incentives for the purchase of highly efficient DHP. This program represents an extension to the Smart Habits Rebate program, and offers discounts at time of purchase via contractors. The program is expected to be launched in Fall 2015. Heat pump technology has progressed rapidly in the past several years, including notably cold-­‐climate ductless heat pumps more suited to New Brunswick’s predominantly baseboard-­‐heated homes. High efficiency DHPs extract heat from the outdoor air at temperatures well below freezing, and distribute that heat through wall-­‐mounted units that require no internal duct work. These units also function as high efficiency air conditioners during summertime. Given the high market share of baseboard-­‐heated homes in the province, DHPs are of particular interest as they represent a much more efficient alternative to standard electric heating systems. KEY FEATURES & BENEFITS The program consists of the following key features: • Financial incentive: NB Power will offer a financial incentive to cover a portion of the incremental cost of a new ENERGY STAR Most Efficient DHP, to overcome market barriers to the adoption of this technology. • Collaboration: NB Power will work closely with DHP installers and distributors, to encourage the deployment of this equipment, while also leveraging the Residential Home Energy Retrofit program. • Participation: it is projected that the program can achieve the installation of 7,500 ENERGY STAR Most Efficient DHPs over the FY2016-­‐18 horizon. Over the next three years, NB Power will launch marketing campaigns and create collateral aimed at increasing awareness of the value of certified, high-­‐efficiency DHPs. SAVINGS AND INVESTMENTS The table below presents the energy and capacity savings for this program over the FY2016-­‐18 timeframe, along with associated investments: Table 10: Savings and investments for ENERGY STAR Most Efficient HP program METRIC UNITS FY2016 FY2017 FY2018 Energy savings Annual incremental energy savings Annual cumulative energy savings Peak capacity savings Annual incremental winter peak savings Annual cumulative winter peak savings Program budget GWh* GWh* MW* MW* $M 2.0 2.0 0.2 0.2 1.0 4.1 6.1 0.4 0.5 1.8 4.1 10.2 0.4 0.9 1.8 Note: totals may not reflect sum of individual line items due to rounding. * GWh and MW at generator (i.e. line losses are included). 14 2.7
Home Energy Report The Home Energy Report program is a new energy efficiency program, whereby select customers will receive a personalized energy report, starting in 2016. The report will help customers better understand their electricity usage and compare it with that of their peers. The program is expected to be launched in Spring 2016. This type of report has proven, in many provinces and U.S. states, to successfully inform and empower households to adopt more energy-­‐conserving behaviour and measures. This program could also potentially be used as a springboard for promoting other energy efficiency and demand response programs, thus improving synergies among the various initiatives. KEY FEATURES & BENEFITS The program consists of the following key features: • Participation: starting in 2016, NB Power will offer a home energy report to about 125,000 households. • Savings: it is projected that an average homeowner would achieve savings of 120 kWh per year upon making changes in response to their personalized home energy report. This program approach has been deployed across other jurisdictions, and has met with considerable success. The ultimate goal is to extend the program to the entire customer base. SAVINGS AND INVESTMENTS The table below presents the energy and capacity savings for this program over the FY2016-­‐18 timeframe, along with associated investments: Table 11: Savings and investments for home energy report program METRIC UNITS FY2016 FY2017 FY2018 Energy savings Annual incremental energy savings Annual cumulative energy savings Peak capacity savings Annual incremental winter peak savings Annual cumulative winter peak savings Program budget GWh GWh MW MW $M 0.0 0.0 0.0 0.0 0.1 16.1 16.1 3.7 3.7 1.7 16.5 28.2 3.5 6.2 1.7 Note: totals may not reflect sum of individual line items due to rounding. * GWh and MW at generator (i.e. line losses are included). 15 2.8
Demand Response Alerts Pilot The Demand Response Alerts Pilot is a new demand response pilot. Building on the energy literacy focused “Beat the Peak” campaign initiated during winter 2014-­‐15, it will test residential customers’ response to alerts sent during critical winter periods. The program is expected to be launched in Fall 2016. In designing this initiative, NB Power will leverage the experience and results of similar pilots that have recently been deployed across North America. This pilot will test the technical capabilities and consumer acceptance of DR alerts sent through various communications channels in the New Brunswick context. KEY FEATURES & BENEFITS The program consists of the following key features: • Signals: by using smart grid technologies, pilot participants would receive a customized message 24 hours before a demand response event, encouraging them to take action in reducing and/or deferring their electricity consumption during a critical period. A post-­‐event notification (24-­‐48 hours after) would be sent to pilot participants with the goal of providing them feedback on the dollars and energy saved, and to compare their consumption with that of their peers. • Communication: various communication means would be used to notify customers, including e-­‐
mails and SMS. This pilot would be complementary to the Home Energy Report program. • Participation: this pilot would match the smart meter roll-­‐out, and is expected to enlist 1,000 and 8,900 new participants in FY2017 and FY2018, respectively. SAVINGS AND INVESTMENTS The table below presents the energy and capacity savings for this initiative over the FY2016-­‐18 timeframe, along with associated investments: Table 12: Savings and investments for demand response alerts pilot METRIC UNITS FY2016 FY2017 FY2018 Energy savings Annual incremental energy savings Annual cumulative energy savings Peak capacity savings Annual incremental winter peak savings Annual cumulative winter peak savings Pilot budget GWh* GWh* MW* MW* $M 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.1 0.0 0.0 1.9 2.1 0.1 Note: totals may not reflect sum of individual line items due to rounding. * GWh and MW at generator (i.e. line losses are included). 16 2.9
Time-­‐Based Pricing Pilot The Time-­‐Based Pricing Pilot is a new demand response pilot, which will test a time-­‐based pricing schedule for a select group of customers, in order to assess their responsiveness. The pilot is expected to be launched in Fall 2017. Experience in other provinces and states has shown that a well-­‐designed time-­‐based pricing model can be an effective strategy for changing consumer behaviour. This is particularly the case when operating in conjunction with deployment of “smart” thermostats, appliances and other technologies, which can automate usage times based on pricing signals. Smart Grid technologies greatly facilitate the introduction of time-­‐based pricing, which reflects the fact that the costs of generating and delivering electricity change continuously during the day in order to meet fluctuating demand. That said, given New Brunswick’s predominance of electric heating systems, peak demand coincides with winter heating needs. This creates a somewhat unique challenge, insofar as heating is a more difficult load to displace on a short-­‐term basis than, say, air conditioning and appliances. For this reason, NB Power is taking a cautious approach, including sufficient time to design a responsible strategy adapted to our province’s unique needs, and a pilot to test responsiveness before broader deployment. KEY FEATURES & BENEFITS The program consists of the following key features: • Pricing Options: Time-­‐based pricing can take many forms, and NB Power is currently considering two options for pilot testing: Under Time-­‐of-­‐Use (TOU) pricing, different prices are set in advance for certain periods of the day (e.g. the afternoon, evening, and night) and of the year (e.g. summer and winter). Under Critical-­‐Peak pricing (CPP), prices can adjust in near-­‐real time during periods of exceptionally high electricity demand. In both cases, high peak prices should be offset by lower off-­‐peak prices, thus providing customers an opportunity to lower their bills by shifting demand. • Participation: this pilot is expected to enlist 600 participants by the end of the FY2016-­‐18 horizon. It is expected that the pilot will be launched in Fall 2017. If the pilot is successful, time-­‐based pricing would be offered to all residential customers on a voluntary basis. SAVINGS AND INVESTMENTS The table below presents the energy and capacity savings for this pilot over the FY2016-­‐18 timeframe, along with associated investments: Table 13: Savings and investments for time-­‐based pricing pilot METRIC UNITS FY2016 FY2017 FY2018 Energy savings Annual incremental energy savings Annual cumulative energy savings Peak capacity savings Annual incremental winter peak savings Annual cumulative winter peak savings Pilot budget GWh* GWh* MW* MW* $M 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.2 0.2 0.7 0.7 0.4 Note: totals may not reflect sum of individual line items due to rounding. * GWh and MW at generator (i.e. line losses are included). 17 3 COMMERCIAL & INDUSTRIAL STRATEGY 3.1
OVERVIEW The Commercial & Industrial (C&I) Strategy consists of a portfolio of standardized and custom programs aimed at non-­‐residential customers. C&I customers require services tailored to their particular needs and barriers. Typically, small and medium sized C&I customers (“SMBs”) in New Brunswick have different needs and face different barriers than large customers. For example, high up-­‐front costs, limitations on time and knowledge, and limited access to capital are particularly difficult barriers for SMB customers. The table below lists each program, along with its broad type (EE or DR), the total budget associated with it for the FY2016-­‐18 period, the cumulative energy savings (GWh) for the FY2016-­‐18 period, and the cumulative peak savings (MW) for the FY2016-­‐18 period1. Savings from the Large Industrial Custom initiative account for about half of the C&I sector’s energy savings. Similarly, the sector’s winter peak savings are largely dominated by the Large Commercial Fast DR Pilot. Table 14: Overview of commercial & industrial DSM initiatives INITIATIVES Commercial initiatives LED Street Lighting Commercial Retrofit** *** SMB Commercial Direct Install SMB Commercial Smart Devices Pilot Large Commercial Fast DR Pilot Industrial initiatives SMB Industrial Prescriptive SMB Industrial Fast DR Pilot Large Industrial Custom TOTAL C&I INITIATIVES Energy efficiency Demand response Type Status EE EE EE DR DR EE DR EE EE DR Existing Existing New Pilot Pilot New Pilot New Existing, New Pilots Total Budget FY2016-­‐18 ($M) 15.1 2.4 3.0 0.6 1.4 0.7 0.2 3.7 27.0 24.9 2.1 Annual Cumulative Energy Savings in FY2018 (GWh*) 12.8 9.5 5.7 0.0 3.5 2.2 0.2 32.6 66.4 62.7 3.7 Annual Cumulative Winter Peak Savings in FY2018 (MW*) 3.0 1.2 0.8 1.0 11.6 0.5 0.7 3.9 22.7 9.4 13.3 * GWh and MW at generator (i.e. line losses are included). ** Only electric budgets and savings are shown here. *** Fully funded by the New Brunswick government for only the year FY2016. Definitions: SMB commercial: < 300 MWh / yr; SMB industrial: < 2MW Note: totals may not reflect sum of individual line items due to rounding. Key features and benefits for each of these initiatives are described on the following pages, along with associated annual savings and investments. 1
It is worth noting that NB Power currently offers an emergency demand response initiative (“Interruptible Load Rates”) to its large industrial customers, aimed at encouraging these customers to curtail their load during system emergencies. 18 3.2
LED Street Lighting The LED Street Lighting program is an existing energy efficiency program launched in 2012, which replaces high pressure sodium (HPS) street lights (currently rented out from NB Power) with more efficient LED lights. KEY FEATURES & BENEFITS The program consists of the following key features: • Participation: NB Power currently rents out 72,000 street lights. It is expected that all rented street lights will have been converted to LED by the end of FY2017, following a balanced schedule of planned maintenance cycles, new installations, and strategic change-­‐outs. • Energy Savings: LED street lights use 50 to 60% less energy than their HPS counterparts. • Annual maintenance savings: Since LED street lights have a longer useful life than HPS lights, this results in lower maintenance costs for NB Power. SAVINGS AND INVESTMENTS The table below presents the energy and capacity savings for this program over the FY2016-­‐18 timeframe, along with associated investments: Table 15: Savings and investments for LED street lighting program METRIC UNITS FY2016 FY2017 FY2018 Energy savings Annual incremental energy savings Annual cumulative energy savings Peak capacity savings Annual incremental winter peak savings Annual cumulative winter peak savings Program budget GWh* GWh* MW* MW* $M 6.6 6.6 1.5 1.5 7.6 6.2 12.8 1.4 3.0 7.6 0.0 12.8 0.0 3.0 0.0 Note: totals may not reflect sum of individual line items due to rounding. * GWh and MW at generator (i.e. line losses are included). 19 3.3
Commercial Retrofit The Commercial Retrofit program (commonly known as “Energy Smart”) is an existing energy efficiency program, which assists existing commercial building owners and operators in making their buildings more energy efficient and reducing operating and maintenance costs. The program supports a comprehensive list of measures since all proven energy savings measures are eligible for financial assistance. KEY FEATURES & BENEFITS The program consists of the following key features: • Financial incentives are offered to help offset the costs of an energy audit and resulting eligible upgrades. The program was run by Efficiency NB, now part of NB Power since April 2015. • Energy Audits are performed by qualified Energy Management Service Providers. • Participation: it is projected that about 60 buildings will be retrofitted per year over the FY2016-­‐
18 horizon. Over the coming months, NB Power will review this program as part of the design of the new SMB Commercial Direct Install program (section 3.4), in order to ensure that both initiatives are complementary. SAVINGS AND INVESTMENTS The table below presents the energy and capacity savings for this program over the FY2016-­‐18 timeframe, along with associated investments: Table 16: Savings and investments for Commercial Retrofit program* METRIC UNITS FY2016 FY2017 FY2018 Energy savings Annual incremental energy savings Annual cumulative energy savings Peak capacity savings Annual incremental winter peak savings Annual cumulative winter peak savings Program budget GWh** GWh** MW** MW** $M 3.2 3.2 0.4 0.4 0.8 3.2 6.3 0.4 0.8 0.8 3.2 9.5 0.4 1.2 0.8 Note: totals may not reflect sum of individual line items due to rounding. * Only electric budgets and savings are shown here. Note that the provincial government is funding this program until and including FY2016. ** GWh and MW at generator (i.e. line losses are included). 20 3.4
SMB Commercial Direct Install The SMB Commercial Direct Install program is a new energy efficiency program, which offers low-­‐cost energy efficient lighting retrofits after having conducted a simple “walk-­‐through” audit. The program is expected to be launched in Spring 2016, and applies to commercial customers consuming less than 300 MWh/yr. KEY FEATURES & BENEFITS The program consists of the following key features: • Free energy audit: NB Power offers a simple walk-­‐through audit, free of charge to the customer, to identify relevant efficient lighting measures. Based on this audit, customers are presented with a suggested set of efficient lighting measures for implementation, along with a detailed explanation of the measure cost before and after NB Power’s incentives. • Incentives: Given lessons learned from experience elsewhere, significant incentives are required to overcome market barriers to adoption in this segment. Consistent with best practices elsewhere, NB Power anticipates paying 80% of measure costs, with the remainder to be paid by the customer. NB Power will also consider offering an on-­‐bill repayment option for the customer’s portion. • Turnkey solution: NB Power will directly install the energy efficient measures and handle the entire process, from material procurement to installation and quality control. • Participation: The program is expected to be launched in the fall of 2016, with 230 and 555 lighting installations projects in the first two years of the program. Based on program design best practices for smaller commercial businesses, relatively generous incentive payments and turn-­‐key services are paramount to surmounting the financial and transactional barriers faced by this hard-­‐to-­‐reach clientèle and, thus, to the program’s success. As the utility gains more experience in delivering this initiative, other energy efficiency measures, such as electronic thermostats and energy-­‐efficient reach-­‐in refrigerators and freezers, may be added beyond FY2018. SAVINGS AND INVESTMENTS The table below presents the energy and capacity savings for this program over the FY2016-­‐18 timeframe, along with associated investments: Table 17: Savings and investments for SMB Commercial Direct Install program METRIC UNITS FY2016 FY2017 FY2018 Energy savings Annual incremental energy savings Annual cumulative energy savings Peak capacity savings Annual incremental winter peak savings Annual cumulative winter peak savings Program budget GWh* GWh* MW* MW* $M 0.0 0.0 0.0 0.0 0.2 1.6 1.6 0.2 0.2 0.9 4.0 5.7 0.6 0.8 1.8 Note: totals may not reflect sum of individual line items due to rounding. * GWh and MW at generator (i.e. line losses are included). 21 3.5
SMB Commercial Smart Devices Pilot The SMB Commercial Smart Devices Pilot is a new demand response pilot, which—akin to similar Residential programs—aims to test the technical capabilities of smart domestic hot water (DHW) heaters and smart thermostats in small & medium businesses. The program is expected to be launched in Fall 2017, and applies to commercial customers consuming less than 300 MWh / yr. KEY FEATURES & BENEFITS Building on the experience of other utilities in North America, the pilot consists of the following key features: • Direct installation of smart thermostats and DHW heaters to select customers, free of charge. • Testing the technical capabilities of these devices during the winter season, especially the potential additional energy and peak savings that this new equipment can generate compared to standard equipment • Smart grid technologies (two-­‐way communication devices) will be leveraged by NB Power during this program. • Participation: up to 150 participants are expected in FY2018. Based on the findings from this initiative and similar Residential programs, wider roll-­‐out may be considered for the year FY2019. SAVINGS AND INVESTMENTS The table below presents the energy and capacity savings for this initiative over the FY2016-­‐18 timeframe, along with associated investments: Table 18: Savings and investments for SMB Commercial Smart Devices Pilot METRIC UNITS FY2016 FY2017 FY2018 Energy savings Annual incremental energy savings Annual cumulative energy savings Peak capacity savings Annual incremental winter peak savings Annual cumulative winter peak savings Pilot budget GWh* GWh* MW* MW* $M 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.0 1.0 0.6 Note: totals may not reflect sum of individual line items due to rounding. * GWh and MW at generator (i.e. line losses are included). 22 3.6
Large Commercial Fast DR Pilot The Large Commercial Fast DR Pilot is a new demand response pilot, whereby NB Power will support large commercial customers—technically and financially—in designing and implementing pre-­‐
programmed winter peak savings strategies that could be automatically activated by DR event signals during critical system periods. The program is expected to be launched in Fall 2016, and applies to commercial customers consuming at least 300 MWh / yr. Smart Grid technologies play an important role in this program’s success. The automation of DR strategies make it easier for customers to participate in DR events and realize bill savings, while at the same time being beneficial to NB Power by having a pool of customers that can respond rapidly (within seconds) to DR events, thus reducing capacity needs. Although more complex to implement, recent experiences in North American have demonstrated that Fast DR has led to better results for larger C&I customers compared to traditional load control methods. In designing this innovative initiative, NB Power will leverage the experience and results of similar initiatives that have recently been deployed in North America, in order to build a program suited to its unique circumstances. This pilot will test both the performance and consumer acceptance of automatically activated DR strategies in the New Brunswick context. This initiative is similar to the SMB Industrial Fast DR Pilot (see Section 3.8). KEY FEATURES & BENEFITS The pilot consists of the following key features: • Case-­‐by-­‐case: NB Power will develop custom peak saving strategies, tailored to each participant’s circumstances. • Incentives: NB Power will offer financial assistances for DR-­‐focused audits and the installation of energy management systems and peak shifting measures. We will also provide pay-­‐for-­‐play type rewards. • Program synergies: NB Power plans to leverage its Commercial Retrofit (“Energy Smart”) program (see Section 3.3) infrastructure to provide greater value to customers and reduce overhead costs through an integrated EE-­‐DR approach. • Participation: The pilot is expected to be launched in late 2016, and have enlisted 25 participants by the end of the FY2016-­‐18 plan horizon. 23 SAVINGS AND INVESTMENTS The table below presents the energy and capacity savings for this initiative over the FY2016-­‐18 timeframe, along with associated investments: Table 19: Savings and investments for Large Commercial Fast DR pilot METRIC UNITS FY2016 FY2017 FY2018 Energy savings Annual incremental energy savings Annual cumulative energy savings Peak capacity savings Annual incremental winter peak savings Annual cumulative winter peak savings Pilot budget GWh* GWh* MW* MW* $M 0.0 0.0 0.0 0.0 0.1 0.7 0.7 2.3 2.3 0.3 2.8 3.5 9.3 11.6 0.9 Note: totals may not reflect sum of individual line items due to rounding. * GWh and MW at generator (i.e. line losses are included). 24 3.7
SMB Industrial Prescriptive The SMB Industrial Prescriptive program is a new energy efficiency program, which offers a pre-­‐defined list of products that are eligible for financial support. The program is expected to be launched in Fall 2016, and applies to industrial customers with loads of less than 2 MW. The program aims to encourage SMB Industrial customers to choose high-­‐efficiency products where purchases are planned. This type of “prescriptive” approach is designed to minimize “lost opportunities”, thus preventing the locking-­‐in of inefficient equipment for years to come. KEY FEATURES & BENEFITS The program consists of the following key features: • Participation: The program is slated for launch in FY2017 (September 2016), and is projected to reach 40 projects by FY2018. • Incentives: Incentives will be offered to overcome incremental measure costs of a suite of products, such as energy efficient pumps and motors. SAVINGS AND INVESTMENTS The table below presents the energy and capacity savings for this program over the FY2016-­‐18 timeframe, along with associated investments: Table 20: Savings and investments for SMB Industrial Prescriptive program METRIC UNITS FY2016 FY2017 FY2018 Energy savings Annual incremental energy savings Annual cumulative energy savings Peak capacity savings Annual incremental winter peak savings Annual cumulative winter peak savings Program budget GWh* GWh* MW** MW** $M 0.0 0.0 0.0 0.0 0.1 0.4 0.4 0.1 0.1 0.2 1.7 2.2 0.4 0.5 0.4 Note: totals may not reflect sum of individual line items due to rounding. * GWh and MW at generator (i.e. line losses are included). 25 3.8
SMB Industrial Fast DR Pilot Similar to the Large Commercial Fast DR program (section 3.6), the SMB Industrial Fast DR Pilot is a new demand response pilot, whereby NB Power will support small and medium industries—technically and financially—in designing and implementing pre-­‐programmed peak savings strategies that could be automatically activated when the utility sends DR event signals during critical system periods. The program is expected to be launched in Fall 2016, and applies to industrial customers having a load of less than 2 MW2. KEY FEATURES & BENEFITS The pilotconsists of the following key features: • Case-­‐by-­‐case: NB Power will develop custom peak saving strategies with each participant, such that they are tailored to the participant’s circumstances. • Incentives: NB Power will offer financial incentives for DR-­‐focused audits and the installation of peak shifting measures and will also provide pay-­‐for-­‐performance rewards. • Program synergies: in order to improve the pilot’s cost-­‐effectiveness from the participants’ and the utility’s perspectives, the customers would be encouraged to install energy efficiency measures that are incentivized under the SMB Industrial Prescriptive Program (see Section 3.7). • Participation: the program is expected to be launched in late 2016, and enlist 20 participants (cumulative) by the end of the FY2016-­‐18 horizon. SAVINGS AND INVESTMENTS The table below presents the energy and capacity savings for this initiativeover the FY2016-­‐18 timeframe, along with associated investments: Table 21: Savings and investments for SMB Industrial Fast DR pilot METRIC UNITS FY2016 FY2017 FY2018 Energy savings Annual incremental energy savings Annual cumulative energy savings Peak capacity savings Annual incremental winter peak savings Annual cumulative winter peak savings Pilot budget GWh* GWh* MW* MW* $M 0.0 0.0 0.0 0.0 0.1 0.1 0.1 0.2 0.2 0.1 0.2 0.2 0.5 0.7 0.1 Note: totals may not reflect sum of individual line items due to rounding. * GWh and MW at generator (i.e. line losses are included). 2
As stated previously, NB Power is currently offering an emergency demand response initiative (“Interruptible Load Rates”) to its large industrial customers, aimed at encouraging these customers to curtail their load during system emergencies. 26 3.9
Large Industrial Custom The Large Industrial Custom program is a new energy efficiency program, whereby NB Power will work closely with eligible customers to identify and implement cost-­‐effective electrical energy saving measures on a case-­‐by-­‐case basis. Targeted opportunities may involve both comprehensive, operations-­‐
focused measures (e.g. Energy Management and Information Systems, or EMIS), as well as specific, high-­‐efficiency equipment such as pumps and motors. The program is expected to be launched in Fall 2016, and applies to industrial customers with electric loads of at least 2 MW. KEY FEATURES & BENEFITS The program consists of the following key features: • Case-­‐by-­‐case: NB Power will develop custom energy efficiency strategies with each participant. • Participation: The program is expected to be launched in late 2016, and is projected to lead to 2 EMIS projects with large industrial customers, and about 20 equipment projects, by the end of the FY2016-­‐18 horizon. It is worth noting that, while the number of participants remains small, the savings potential (and cost-­‐
effectiveness ratio) is large, given the considerable energy consumption of large industrial customers in the province. SAVINGS AND INVESTMENTS The table below presents the energy and capacity savings for this program over the FY2016-­‐18 timeframe, along with associated investments: Table 22: Savings and investments for Large Industrial Custom program METRIC UNITS FY2016 FY2017 FY2018 Energy savings Annual incremental energy savings Annual cumulative energy savings Peak capacity savings Annual incremental winter peak savings Annual cumulative winter peak savings Pilot budget GWh* GWh* MW* MW* $M 0.0 0.0 0.0 0.0 0.2 9.6 9.6 1.2 1.2 1.1 23.0 32.6 2.8 3.9 2.5 Note: totals may not reflect sum of individual line items due to rounding. * GWh and MW at generator (i.e. line losses are included). 27 4 ENABLING STRATEGIES 4.1
OVERVIEW Enabling strategies involve activities that either cut across individual programs, supporting and enhancing portfolio-­‐wide outcomes, or that extend beyond programs, sustaining longer-­‐term energy savings. Enabling activities can include both supporting initiatives – such as program planning, systematic evaluation, measurement and verification (EM&V) processes, and broad education and awareness campaigns – as well as more market transforming initiatives like innovative financing, support for enhanced codes and standards and building labelling policies, and trade ally partnerships. Figure 1: Impact overview of enabling strategies Short-­‐Term: Support and enhance Enabling DSM Strategies program acwvity Mid-­‐Term: Lock in program-­‐
driven savings with policy and market changes (e.g. Long-­‐Term: Transform markets by changing consumer and market knowledge, norms and pracwces advanced building codes) As part of its DSM Plan, NB Power has allocated a budget, totalling $5.2M over the FY2016-­‐18 period, for three types of enabling activities: • Planning & Regulatory: planning for and designing the portfolio of programs, working through the regulatory process, crafting policies and addressing issues, assessing savings potential, etc. • Market Transformation: cross-­‐cutting activities such as education and awareness. • Evaluation: measurement, verification, and evaluation of the programs and their impacts. The following table lists the budgets for each category: Table 23: Enabling strategy budgets STRATEGY FY2016 0.3 0.6 0.4 1.3 Planning & Regulatory Market Transformation Evaluation TOTAL ENABLING BUDGET ($M) FY2017 0.3 1.0 0.6 1.9 FY2018 0.3 1.0 0.7 2.0 Note: totals may not reflect sum of individual line items due to rounding. 28 4.2
PLANNING & REGULATORY NB Power has allocated funds for planning activities and in support of the regulatory process. Specifically: • Planning & design: the development of the plan and design of its associated programs, along with other enabling activities. • Opportunities assessment: the assessment of potential savings opportunities, in support of the planning function • Regulatory process: funds required to support the regulatory process, including regulatory hearing planning and support and stakeholder engagement activities. • Policy development: the development of policy positions pertaining to the DSM Plan and its activities, such as cost-­‐effectiveness screening, multi-­‐fuel mandates, and other critical issues. A total of $0.9 million was allocated for Planning & Regulatory activities over the FY2016-­‐18 timeframe. 4.3
MARKET TRANSFORMATION NB Power allocated funds for cross-­‐cutting enabling activities that provide broad support to programs, while also enhancing our ability to transform markets, in the long-­‐term, toward sustained energy efficiency: • Education & Awareness: The development of marketing and outreach campaigns (e.g. Beat the Peak campaign, web-­‐based energy savings tips), in order to foster an EE/DR-­‐oriented relationship with customers. • Information & Tips: NB Power will continue to provide its residential customers with energy savings tips and information on our programs. • Partnerships: NB Power will maintain and foster partnerships with a wide range of market actors, such as retailers, contractors, distributors and engineering firms, with the twin goals of supporting deployment of our DSM programs and enhancing the province’s home-­‐grown DSM service industry. • Codes & Standards: NB Power will provide technical and other expertise in support of opportunities to enhance building codes & equipment standards, in partnership with government. • Others: NB Power has allocated some funds to study other tools to support EE/DR programs, such as potential innovative financing mechanism (e.g. on-­‐bill financing for the SMB Commercial Direct Install program) and a potential Innovation Fund to support promising technologies. A total of $2.6 million was allocated for Market Transformation activities over the FY2016-­‐18 timeframe. 29 4.4
EVALUATION, MEASUREMENT & VERIFICATION (EM&V) The utility allocated funds for the development and implementation of the FY16-­‐18 EM&V Plan. While details of the Plan can be found in Appendix B, highlights are provided below: • EM&V Plan: This plan lays out all EM&V activities to be conducted over the FY2016-­‐2018 period. The bulk of financial resources will be directed towards impact and process evaluations, as well as to the market assessment of existing energy efficiency programs (i.e. Home Retrofit, Low-­‐
Income, Mass-­‐Market Products, LED Street Lighting, and Commercial Retrofit). Additional funds have been set aside for EM&V activities to be determined more precisely in next year’s EM&V plan, for new programs and pilot projects. To ensure transparency and independence in program evaluation, many evaluation activities will be conducted by third-­‐party evaluators. A total of $1.7 million was allocated for EM&V over the FY2016-­‐18 timeframe. This budget is equivalent to approximately 3% of total DSM Plan expenditures, which is in line with best practices in North America. 30 5 COST-­‐EFFECTIVENESS ANALYSIS 5.1
METHODOLOGY In order to assess the DSM Plan’s cost-­‐effectiveness, NB Power considered a variety of standard tests, including the three most common ones used for primary screening: the Program Administrator Cost (PAC) test, the Total Resource Cost (TRC) test, and the Societal Cost Test (SCT). While each test can offer value, NB Power chose the PAC for its primary screening test. The PAC reflects the utility’s least-­‐cost planning perspective, by comparing the lifetime benefits NB Power will derive from its DSM plan (e.g. avoided generation costs) against the investment it must make to implement the plan (the total budget). By using the PAC, NB Power and its stakeholders are provided with a clear measure of cost-­‐effectiveness; one that is directly comparable with supply-­‐side options and consistent with the least-­‐cost planning exercise undertaken through its Integrated Resource Plan. NB Power considered but ultimately chose not to retain the TRC and SCT tests, for several reasons. First, while conceptually interesting, both the TRC and SCT suffer from fundamental accuracy challenges, notably in the quantification of key costs and benefits3. Second, in part because of those challenges, certain benefits are often neglected (while corresponding costs are accounted for), leading to charges of systemic bias. Third, because they are inconsistent with the way in which NB Power currently treats supply resources for planning purposes. And fourth, because they ignore a critical perspective that is commonly at the core of stakeholder concerns, that of maximizing value for ratepayer dollars. In addition to the PAC test, NB Power also computes the Participant Test (PT), in order to provide an indication of the value of programs and pilots to participating customers. While the PAC was computed for each program, it was used as a decision-­‐making screen at the sector level. This level addresses equity between sectors by avoiding cross-­‐subsidization). We note that doing so also minimizes the temptation to game the framework when defining the scope of individual “programs”. Beyond sector-­‐level screening, the reader can access program-­‐level PAC results, presented for information purposes, in section 5.4. 3
Both the TRC and SCT ought to include the value of participant non-­‐energy benefits, or NEBs, which can similarly be extremely difficult to quantify with reasonable accuracy, and which can lend themselves to protracted regulatory debate. The SCT further requires quantification of societal benefits such as air quality improvements or climate change mitigation, which can be difficult, especially in the absence of clear policy direction. 31 5.2
TEST VARIABLES The key variables used for computing both PAC and PT for each program are presented in more detail in the table below: Table 24: Variables for cost-­‐effectiveness analysis PAC (NB Power’s Perspective) PT (Participants’ Perspective) Benefits • Net annual energy and capacity savings • Electric interactive effects for electric DSM measures • Energy and peak avoided costs • Peak period shifting values* • Transmission and distribution losses • Net annual energy and capacity savings • Electric interactive effects for electric DSM measures • Electric energy and capacity rates Costs • Incentive costs • Non-­‐incentive costs (e.g. administration, marketing, technical support) • Net DSM measure costs (i.e. incremental measure costs minus incentives) • Non-­‐electric interactive effects from electric DSM measures • Non-­‐electric energy prices Others • Discount rate • Effective useful life of DSM measure savings • Discount rate • Effective useful life of DSM measure savings * Shifting values are based on moving energy from the peak period to the off-­‐peak period. 5.3
KEY ASSUMPTIONS Calculating program cost-­‐effectiveness requires making a number of assumptions. Key assumptions are briefly discussed below: • Net annual program energy and capacity savings: Net savings are the portion of program savings that can be attributed to the program. This means removing the portion of the initial “gross” savings estimates that were not caused directly by the program because customers would have taken action even in the absence of the program (“free riders (FR)”), and adding savings from customers who, inversely, were influenced by the program but did not participate (“spillover (SO)”). The net-­‐to-­‐gross (NTG) ratio (i.e. the relation between gross and net savings) can be expressed as follows: NTG = 1 – FR + SO. An NTG ratio was assumed for each program based on a combination of program evaluation reports from elsewhere, including from neighbouring Nova Scotia, and professional judgment. It is important to note that the NTG ratio assumptions will be replaced by results of the planned impact evaluations of NB Power programs as they come in. Details on future EM&V activities can be found in Appendix B. • Electric and non-­‐electric interactive effects for electric DSM measures: Assumptions are based largely on work conducted by Hydro-­‐Quebec on heating and cooling interactive effects of energy-­‐efficient lighting, appliances and pipe insulation. • Electricity rates: Current energy and capacity electricity rates in New Brunswick were assumed to increase by 2.0% per year. 32 •
•
•
•
Measure savings (energy, peak), costs and effective useful lives: A series of assumptions were made based on various sources, including past programs results in New Brunswick, Nova Scotia and Maine. Nominal discount rate: NB Power’s weighted average cost of capital (WACC) of 5.65% was used. Transmission and distribution losses: A T&D loss rate of 8.0% was assumed. Avoided costs: NB Power’s avoided energy and capacity costs, as well as peak period shifting values, are presented in Table 27 below: Table 25: Avoided costs and peak period shifting values Year 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 Energy Avoided Costs ($/kWh) -­‐ Baseload -­‐ 0.0450 0.0464 0.0477 0.0492 0.0506 0.0522 0.0537 0.0553 0.0570 0.0587 0.0605 0.0623 0.0642 0.0661 0.0681 0.0701 0.0722 0.0744 0.0766 0.0789 0.0813 0.0837 0.0862 0.0888 0.0915 0.0942 0.0970 0.1000 0.1030 0.1060 Energy Avoided Costs ($/kWh) -­‐ Peak -­‐ 0.0700 0.0721 0.0743 0.0765 0.0788 0.0811 0.0836 0.0861 0.0887 0.0913 0.0941 0.0969 0.0998 0.1028 0.1059 0.1091 0.1123 0.1157 0.1192 0.1227 0.1264 0.1302 0.1341 0.1382 0.1423 0.1466 0.1510 0.1555 0.1602 0.1650 Capacity Avoided Costs ($/kW) 19.9209 21.0464 22.2355 23.4918 24.8191 26.2214 27.7029 29.2681 30.9218 32.6689 34.5147 36.4647 38.5250 40.7017 43.0013 45.4309 47.9977 50.7096 53.5747 56.6017 139.1853 144.7527 150.5429 156.5646 162.8272 169.3402 176.1138 183.1584 190.4847 198.1041 Peak Period Shifting Values ($/MWh) 33.0 34.0 35.0 36.1 37.1 38.2 39.4 40.6 41.8 43.0 44.3 45.7 47.0 48.4 49.9 51.4 52.9 54.5 56.2 57.8 59.6 61.4 63.2 65.1 67.1 69.1 71.1 73.3 75.5 77.7 33 5.4
RESULTS The program administrator cost test (PAC) results are presented in the table below: Table 26: Cost-­‐effectiveness analysis: the Utility & Ratepayers Perspective (PAC) PRESENT VALUE INITIATIVES RESIDENTIAL* EE Mass-­‐Market Energy Efficient Products Residential Home Retrofit + Direct Install ENERGY STAR Most Efficient Ductless Heat Pumps Home Energy Report DR Smart Thermostats Pilot Domestic Hot Water Pilot Demand Response Alerts Pilot Time-­‐Based Pricing Pilot COMMERCIAL & INDUSTRIAL EE LED Street Lighting Commercial Retrofit SMB Commercial Direct Install SMB Industrial Prescriptive Large Industrial Custom DR SMB Commercial Smart Devices Pilot SMB Industrial Fast DR Pilot Large Commercial Fast DR Pilot TOTAL Total EE Total DR BENEFITS ($M) COSTS ($M) NPV ($M) 72.1 22.0 32.9 8.1 4.2 3.5 1.0 0.0 0.4 46.1 10.1 8.3 3.1 1.0 16.2 0.6 0.4 6.4 118.2 105.8 12.4 34.8 5.4 10.9 4.3 3.2 5.4 4.8 0.1 0.7 16.2 3.1 2.3 2.7 0.6 3.2 0.7 0.3 3.3 51.0 35.7 15.3 37.3 16.6 22.0 3.8 0.9 -­‐1.8 -­‐3.8 -­‐0.1 -­‐0.3 29.9 7.0 6.0 0.4 0.4 13.0 -­‐0.1 0.1 3.1 67.2 70.1 -­‐2.9 RATIO PAC Ben,/Cost Ratio 2.1 4.1 3.0 1.9 1.3 0.7 0.2 0.3 0.6 2.8 3.3 3.6 1.2 1.6 5.1 0.8 1.2 2.0 2.3 3.0 0.8 * Excluding Low Income program, which is fully funded by the New Brunswick government. Note: totals may not reflect sum of individual line items due to rounding. As the reader will see, both Residential and Commercial & Industrial program portfolios are cost-­‐
effective as a whole, yielding a PAC ratio of 2.1 and 2.8 for the residential and commercial & industrial sectors, respectively. This result indicates that NB Power (and through it, ratepayers as a whole) stand to benefit from cost savings that are worth more than twice the investment, over the lifetime of the measures, on a present value basis. Achieving cost-­‐effectiveness at the sectoral level was a key priority for NB Power, in order to achieve positive benefits but also to allow pilots to grow. The reader will also note that while energy efficiency programs are broadly cost-­‐effective, a number of demand response pilots do not appear cost-­‐effective at this time This is not surprising, as these pilots represent early-­‐stage initiatives that are intended to pave the way for cost-­‐effective savings in the longer-­‐term, thanks to the learnings they will generate, as well as economies of scale and/or technology improvements. Ultimately, NB Power sought to strike a balance between tried-­‐and-­‐true programs and more innovative initiatives that will pave the way to a more efficient, sustainable future. 34 For information purposes, the participant test (PT) results are similarly presented in the table below: Table 27: Cost-­‐effectiveness analysis: the Participants’ Perspective (PT) PRESENT VALUE INITIATIVE RESIDENTIAL* EE Mass-­‐Market Energy Efficient Products Residential Home Retrofit + Direct Install ENERGY STAR Most Efficient Ductless Heat Pumps Home Energy Report DR Smart Thermostats Pilot Domestic Hot Water Pilot Demand Response Alerts Pilot Time-­‐Based Pricing Pilot COMMERCIAL & INDUSTRIAL EE LED Street Lighting*** Commercial Retrofit SMB Commercial Direct Install SMB Industrial Prescriptive Large Industrial Custom DR SMB Commercial Smart Devices Pilot SMB Industrial Fast DR Pilot Large Commercial Fast DR Pilot TOTAL Total EE Total DR BENEFITS ($M) COSTS ($M) NPV ($M) 90.0 30.0 32.6 10.0 8.3 5.6 3.1 0.0 0.5 35.9 4.6 10.7 5.7 1.0 9.6 0.5 0.2 3.7 125.9 112.4 13.5 21.8 10.5 8.5 2.8 0.0** 0.0 0.0 0.0 0.0 7.9 0.0 4.9 1.0 0.1 1.5 0.0 0.0 0.3 29.7 29.4 0.3 68.2 19.5 24.1 7.2 8.3 5.6 3.1 0.0 0.5 28.0 4.6 5.7 4.7 0.9 8.1 0.5 0.2 3.4 96.2 83.1 13.1 RATIO PT Ben./Costs Ratio 4.1 2.9 3.8 3.6 N/A N/A N/A N/A N/A 4.6 N/A 2.2 5.5 7.4 6.6 N/A 13.6 12.0 4.2 3.8 41.8 * Excluding Low Income program, which is fully funded by the New Brunswick government. ** No capital costs are associated with behaviour-­‐based measures. *** The benefits are only those related to a lower renting rate for municipalities and no capital costs are bared by municipalities since the lighting equipment is owned by NB Power. Definition: “N/A” was added in cases where the participant bears no cost, and the benefit/cost ratio cannot be computed (cannot divide by zero). Note: totals may not reflect sum of individual line items due to rounding. NB Power’s DSM offering is clearly cost-­‐effective for participants. This is critical, as significant net cost savings are needed to overcome multiple and pervasive market barriers. We note in particular the high participant cost-­‐effectiveness ratios for DR initiatives as a whole. These higher values are by design, as North American experience strongly suggests that customers are often even more reluctant to adopt certain DR practices, insofar as they require a change in behaviour (as opposed to equipment) and/or a voluntary transfer of control, during winter peak periods. 35 APPENDIX A: NB Government Low-­‐Income Program The Low-­‐Income Energy Efficiency program is an existing multi-­‐fuel energy efficiency program which offers fully-­‐funded home retrofits for low-­‐income homeowners. Efficiency NB, which officially joined NB Power in April 2015, has been managing this program since the fall of 2013. The program is fully funded by the New Brunswick government, rather than NB Power. This program was specifically designed to address the particular needs of low income homeowners. The program carries out fully funded and facilitated retrofits for energy efficiency. It will target homes in need of major efficiency upgrades, especially insulation and heating systems, resulting in significant energy savings for homeowners who have difficulty meeting their household financial obligations. KEY FEATURES & BENEFITS The program consists of the following key features: • Fully funded and facilitated: the program undertakes home energy retrofits from scratch, by auditing the home, purchasing energy efficient equipment, and retrofitting the home, at no charge to the customer. • Focus on high-­‐saving measures: the program targets homes in need of major efficiency upgrades, most notably in terms of insulation and heating systems. Such measures help lower energy bills for low-­‐income customers. • Participation: about 100 electric-­‐heated homes are expected to be retrofitted in each of the three years over the FY2016-­‐18 timeframe. SAVINGS AND INVESTMENTS The table below presents the electrical energy and capacity savings for this program over the FY2016-­‐18 timeframe, along with associated investments: Table 28: Savings and investments for low-­‐income energy efficiency program* METRIC UNITS FY2016 FY2017 FY2018 Energy savings Annual incremental energy savings Annual cumulative energy savings Peak capacity savings Annual incremental winter peak savings Annual cumulative winter peak savings Pilot budget GWh** GWh** MW** MW** $M 0.4 0.4 0.3 0.3 0.8 0.4 0.8 0.3 0.5 0.8 0.4 1.2 0.3 0.8 0.8 * Only electric budgets and savings are shown here. ** GWh and MW at generator (i.e. line losses are included). 36 APPENDIX B: EM&V PLAN See attached EM&V Plan. 37 APPENDIX C: COMPARISON BETWEEN FINAL DSM PLAN BUDGETS AND DSM BUDGETS USED TO DETERMINE THE REVENUE REQUIREMENT The following 3 tables compare final FY16-­‐18 DSM Plan budgets (finalized on November 30, 2015) with FY16-­‐17 DSM budgets used to determine the revenue requirement (RR). Table 29: FY15-­‐16 DSM Plan versus the FY15-­‐16 Budget NBP DR PROGRAM BUDGETS ($M) 2 NBP EE PROGRAM BUDGETS ($M) FY15-­‐16 FY15-­‐16 FY15-­‐16 1
Plan Budget Plan Budget (RR) Budget 7.6 9.1 0.4 Residential Residential 0.8 2.0 0.2 Low Income Smart Thermostat Pilot Home Retrofit (incl. DI) Most Efficient Energy Star DHP 3.8 1.0 0.3 Mass-­‐Market Products 1.9 2.0 Home Energy Report Commercial & Industrial LED Street Lighting
3 Commercial Retrofit DI S&M Commercial SMI Prescriptive Large Ind. Custom 4.2 0.1 8.9 FY15-­‐16 Budget (RR) 0.6 0.2 DR Alerts Pilot 0.0 0.0 Time-­‐Based Pricing Pilot 0.0 0.2 Ecopeak DHW 0.0 0.0 0.6 Smart DHW Pilot 0.2 0.2 9.2 0.2 0.2 0.0 0.0 0.1 0.1 0.1 Commercial & Industrial S&M Com. Smart Equip. Pilot Large Com. Fast DR Pilot 7.6 7.6 0.8 1.0 0.2 0.2 S&M Ind. Fast DR Pilot 0.1 0.2 0.2 0.3 0.5 0.2 0.2 0.1 0.2 Enabling Awareness & partnership 0.9 1.1 Planning 0.1 0.2 Planning 0.2 0.3 Evaluation 0.0 0.1 Enabling Strategies 0.4 0.4 Evaluation 0.3 0.4 19.4 TOTAL 0.9 Enabling TOTAL 17.4 1.3 Note: totals may not reflect sum of individual line items due to rounding. 1) FY15-­‐16 budgets for Home Retrofit, Low-­‐Income, and Commercial Retrofit program include funding for all-­‐fuels implementation 2) Some Demand Response program budgets include a combination on OM&A and capital budgets 3) LED Street Lighting is included in the capital budget but is reflected in the DSM budget table since NBP is counting the kWh and kW savings towards its DSM goals. DSM Plan FY15-­‐16 ($M) 18.3 DSM Budget 15-­‐16 ($M) 20.7 Variance ($M) -­‐2.4 38 Table 30: FY16-­‐17 DSM Plan versus the FY16-­‐17 Budget NBP EE PROGRAM BUDGETS ($M) FY16-­‐17 FY16-­‐17 Plan Budget Budget (RR) 10.0 7.2 Residential Low Income Home Retrofit (incl. DI) Most Efficient Energy Star DHP Mass-­‐Market Products Home Energy Report Commercial & Industrial LED Street Lighting 2 Commercial Retrofit DI S&M Commercial SMI Prescriptive Large Ind. Custom Enabling 0.8 1.7 NBP DR PROGRAM BUDGETS ($M) 1 FY16-­‐17 Plan Budget 1.9 Residential 0.9 Smart Thermostat Pilot 3.8 1.7 DR Alerts Pilot FY16-­‐17 Budget (RR) 2.8 1.1 0.1 0.3 0.1 0.5 1.8 0.3 1.9 2.0 Ecopeak DHW 0.0 0.1 1.5 Smart DHW Pilot 0.8 0.8 10.6 0.4 0.7 0.0 0.3 0.3 0.3 0.1 1.7 10.6 Time-­‐Based Pricing Pilot Commercial & Industrial S&M Com. Smart Equip. Pilot Large Com. Fast DR Pilot 7.6 7.6 0.8 0.8 0.9 0.9 S&M Ind. Fast DR Pilot 0.1 0.2 1.1 0.6 0.8 0.4 0.4 0.2 1.1 Enabling Awareness & partnership 1.4 Planning 0.1 0.2 Evaluation 0.1 0.2 1.3 Planning 0.2 0.3 Enabling Strategies 0.6 0.6 Evaluation 0.5 0.5 21.9 19.2 TOTAL TOTAL 2.9 4.3 Note: totals may not reflect sum of individual line items due to rounding. 1) Some Demand Response program budgets include a combination on OM&A and capital budgets 2) LED Street Lighting is included in the capital budget but is reflected in the DSM budget table since NBP is counting the kWh and kW savings towards its DSM goals. DSM Plan FY16-­‐17 ($M) 24.8 DSM Budget 16-­‐17 ($M) 23.5 Variance ($M) +1.3 39 Table 31: FY17-­‐18 DSM Plan versus the FY17-­‐18 Budget NBP EE PROGRAM BUDGETS ($M) FY17-­‐18 FY17-­‐18 Plan Budget Budget (RR) 10.0 8.0 Residential Low Income Home Retrofit (incl. DI) Most Efficient Energy Star DHP Mass-­‐Market Products Home Energy Report Commercial & Industrial LED Street Lighting 2 Commercial Retrofit DI S&M Commercial SMI Prescriptive Large Ind. Custom Enabling 0.8 1.7 NBP DR PROGRAM BUDGETS ($M) 1 FY17-­‐18 Plan Budget 4.7 Residential 2.3 Smart Thermostat Pilot 3.8 2.0 DR Alerts Pilot 2.3 0.1 0.6 0.4 0.7 1.8 0.5 1.9 2.1 Ecopeak DHW 0.1 0.3 1.7 Smart DHW Pilot 1.8 1.8 5.6 1.6 2.1 0.6 1.1 0.9 0.9 0.1 1.7 5.5 Time-­‐Based Pricing Pilot Commercial & Industrial S&M Com. Smart Equip. Pilot Large Com. Fast DR Pilot 0.0 0.0 0.8 0.8 1.8 1.8 S&M Ind. Fast DR Pilot 0.1 0.4 2.6 0.7 0.9 0.4 0.4 0.4 2.5 Enabling Awareness & partnership 1.4 Planning 0.1 0.2 Evaluation 0.2 0.3 1.3 Planning 0.2 0.3 Enabling Strategies 0.6 0.6 Evaluation 0.5 0.5 16.8 15.0 TOTAL TOTAL FY17-­‐18 Budget (RR) 5.7 7.0 8.7 Note: totals may not reflect sum of individual line items due to rounding. 1) Some Demand Response program budgets include a combination on OM&A and capital budgets 2) LED Street Lighting is included in the capital budget but is reflected in the DSM budget table since NBP is counting the kWh and kW savings towards its DSM goals. DSM Plan FY17-­‐18 ($M) 23.8 DSM Budget 17-­‐18 ($M) 23.7 Variance ($M) +0.1 As the DSM Plan was refined and finalized, budgetary figures were also adjusted to reflect the latest information in terms of participation figures, incremental measure costs, and other factors. Key differences between the DSM Plan and the DSM budget used to determine the revenue requirement are noted below: -­‐ Residential Home Retrofit + Direct Install program: participation numbers for this program—
and, with it, the total incentive costs—were revised upward to i) put more emphasis on electric heated homes (2500 vs 1200 pre-­‐upgrade evaluations per year) and ii), to a much lesser extent, allow non-­‐electric heated homes to have access to the Direct Install of electric measures. 40 -­‐
-­‐
-­‐
-­‐
-­‐
-­‐
ENERGY STAR Ductless Heat Pumps program: participation numbers for this program were revised upward from 5100 to 7500 over the FY16-­‐18 period to i) provide a higher level of incentive ($500 vs $100) as a result of revised measure costs, and ii) implement an improved marketing strategy. (Cancelled) Energy Efficient Domestic Hot Water program: this program was discontinued by NB Power due to the challenge of measuring the savings from the Residential Customer Advisors since their role with respect to DSM is to conduct education and awareness activities. However, these activities remain in the DSM Plan and are now part of the enabling strategies (market transformation). Demand Response Alerts pilot: participation numbers for this program were revised downward to match pilot participation with residential smart meter roll-­‐out. Time-­‐Based Pricing pilot: the launch of this program was postponed by one year following a prioritization exercise, resulting in lower costs in the FY16-­‐18 timeframe. SMB Commercial Smart Devices pilot: the launch of this program was postponed by one year, due to a longer time than expected in designing this initiative, resulting in lower costs in the FY16-­‐18 timeframe. Enabling initiatives: as a result of an optimization exercise, the budgets for the planning, regulatory and evaluation activities were reduced. The following two tables compare final FY16-­‐18 sectoral energy and winter peak savings (September 28, 2015) with the savings associated with the FY16-­‐18 DSM budget used to determine the revenue requirements. Table 32: Comparison of Annual Cumulative Energy and Winter Peak Savings Annual Cumulative Energy Savings in FY18 (GWh @ generator) DSM Plan Budget DSM Budget (RR) Residential Initiatives* 85.7 71.3 C&I Initiatives 66.4 65.0 Enabling Initiatives N/A N/A Total DSM Plan 152.1 136.3 * Excludes the low-­‐income program, which is funded by the New Brunswick government. Annual Cumulative Winter Peak Savings in FY18 (MW @ generator) DSM Plan Budget DSM Budget (RR) Residential Initiatives* 38.0 48.0 C&I Initiatives 22.7 24.0 Enabling Initiatives N/A N/A Total DSM Plan 60.7 72.0 * Excludes the low-­‐income program, which is funded by the New Brunswick government. The higher cumulative energy savings in the residential sector result mainly from the revised participation in two initiatives, namely the Residential Home Retrofit + Direct Install and ENERGY STAR Ductless Heat Pumps programs, whereas the increased cumulative energy savings in the C&I sector stem 41 from updated assumptions on participation and unitary energy savings for the LED Street Lighting initiative. The reduction in the cumulative winter peak savings in the residential sector is mainly due to the revision downward of the Demand Response Alerts pilot participation. In the C&I sector, reduction in the cumulative winter peak savings the SMB Commercial Smart Devices pilot was offset by the LED Street Lighting initiative. 42 43