Ten Year Conservation Potential 2016‐2025 Biennial Conservation Target 2016‐2017 Using the Utility Target Calculator Modified for Non‐Utility programs Prepared by: Utility Consulting Table of Contents Summary Methodology Conservation Target Development Requirements Changes affecting the Target Development Process Modifying the Target Calculator Figure 1 – Pacific Northwest Energy Efficiency savings Codes and Standards Figure 2 – Savings Forecast from Federal Standards Market Transformation ‐ NEEA Savings Ten Year Potential and Biennial Target Recommendation Table 1 – Ten Year Potential and Biennial Target Recommendation Appendices Appendix A – Federal Standards in 6th Plan Baseline Appendix B – Federal Standards taking effect in 2015 Appendix C – Code Changes analyzed by NEEA Appendix D – 6th Plan Table E‐1, Estimated Cost‐Effective Potential Peninsula Light I‐937 Compliance Plan 2016‐2025 Ten Year Potential/2016‐2017 Biennial Target
Page 1 Summary As a Washington electric utility serving more than 25,000 customers (a “Qualifying Utility”), Peninsula Light Company (PLC) is subject to the Energy Independence Act (EIA), more commonly known as Initiative 937. The statute is codified in the Revised Code of Washington (RCW) 19.285 and the implementation rules are contained in the Washington Administrative Code (WAC) 194‐37. The EIA requires that beginning in 2010, a Qualifying Utility must identify its ten year cost effective conservation potential and establish the amount of conservation it will acquire each biennium (biennial target). The EIA also mandates that beginning in 2012 a Qualifying Utility must purchase a percentage of its load from specified renewable resources. If either the renewable energy or conservation targets are not met, the Qualifying Utility is subject to a fine for each megawatt‐hour of shortfall. A Qualifying Utility must develop its conservation potential consistent with the methodologies used by the Northwest Power and Conservation Council (Council) and also have the conservation potential adopted by its governing Board. The Plan must be updated at least every two years. Utility Consulting was retained by PLC to develop its Ten Year Conservation Potential for 2016‐2025 and Biennial Target for 2016‐2017. Using the methods and procedures described below, PLC has identified a Ten Year Potential of 2.7209 aMW and a Biennial Target of 0.5442 aMW. Methodology The EIA requires a utility to identify its achievable, cost‐effective conservation potential using methodologies consistent with those in the Council’s Plan. PLC’s determination of its potential is based on the assumptions and measures in the Council’s 6th Power Plan. Since the Council’s original 6th Plan targets were adopted, new Federal Standards and State Building Code changes have been implemented, providing savings that would have otherwise required utility programs to achieve them. The Target Calculator was adjusted for the savings achieved from these revisions. Peninsula Light I‐937 Compliance Plan 2016‐2025 Ten Year Potential/2016‐2017 Biennial Target
Page 2 Conservation Target Development Requirements Changes affecting the Target Development Process Since the last target setting process, both the statute and rules have been modified. The statute revisions clarify that a utility Board has the final authority to determine the utility target was set in a manner consistent with the Council’s methodologies. The rule revisions have removed the three specific target development options in favor of a general requirement to document that the process a utility used to develop its target is consistent with the statute. The Attorney General also issued an opinion on several questions related to the EIA target setting process. While specific use of the Council’s Target Calculator or Modified Calculator were removed from the rules, the Attorney General’s Opinion states: “use of the Sixth Power Plan calculator...would be consistent with the Act’s requirements.”1 Modifying the Target Calculator The Council’s 6th Power Plan estimates the amount of conservation available in the region, including measures that may, at some point, be covered by codes or standards, then assumes the savings will be accomplished by either utility programs or codes.2 Figure 1 1
http://www.atg.wa.gov/ago‐opinions/identification‐cost‐effective‐energy‐conservation‐potential‐consumer‐owned‐
utilities ‐ Page 11 2
http://www.nwcouncil.org/media/6365/SixthPowerPlan_Ch4.pdf – Page 4‐23 Peninsula Light I‐937 Compliance Plan 2016‐2025 Ten Year Potential/2016‐2017 Biennial Target
Page 3 Codes and Standards Over the last several years, resources other than utility programs have accounted for a large portion of regional energy conservation. The Council estimates that several new Federal Standards adopted since the development of the original 6th Power Plan target will save 780 aMW over the life of the Plan. Figure 2 Also, a series of upgrades to building codes for all four states in the region is planned. The Northwest Energy Efficiency Alliance (NEEA) estimates these code upgrades will save 237 aMW of energy during the 6th Plan time period. Market Transformation ‐ NEEA Savings NEEA works to affect market transformation by accelerating the adoption of energy‐
efficient products, services and practices. A utility is allowed to count its proportionate share of NEEA’s program savings; because NEEA savings are treated in the same manner as utility program savings, this allows a utility to also deduct these savings from its ten year potential. Peninsula Light I‐937 Compliance Plan 2016‐2025 Ten Year Potential/2016‐2017 Biennial Target
Page 4 Ten Year Potential and Biennial Target Recommendation The Target Calculator produces an initial ten year conservation potential for PLC of 12.0893 aMW and a biennial target of 2.4179 aMW. By then modifying the Target Calculator for non‐utility savings, PLC has identified its ten year potential as 2.7209 aMW and its 2016‐
2017 biennial target as 0.5442 aMW. Ten Year Potential Biennial Target 12.0893 aMW 2.4179 aMW 2.7209 aMW 0.5442 aMW 2016‐2025 6th Plan Baseline Target Unadjusted Utility Target Calculator 2016‐2025 6th Plan Modified Calculator Adjusted for Non‐utility Savings Table 1 Peninsula Light I‐937 Compliance Plan 2016‐2025 Ten Year Potential/2016‐2017 Biennial Target
Page 5 Appendices Appendix A – Federal Standards in 6th Plan Baseline Appendix B – Federal Standards taking effect in 2015 Appendix C – Code Changes analyzed by NEEA Appendix D – 6th Plan Table E‐1, Estimated Cost‐Effective Potential Peninsula Light I‐937 Compliance Plan 2016‐2025 Ten Year Potential/2016‐2017 Biennial Target
Page 6 Appendix A – Federal Standards in 6th Plan Baseline “Baseline conditions are estimated from a combination of surveys of new buildings, state and local building energy codes and federal and state appliance efficiency standards…Codes and standards are continually being upgraded. The baseline assumptions used in the Sixth Power Plan are those that were adopted at the end of 2008”3 4
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Sixth Power Plan Appendix E: Conservation Supply Curve Development – Page E‐19 Sixth Power Plan Chapter 4: Conservation Supply Assumptions – Page 4‐4 Peninsula Light I‐937 Compliance Plan 2016‐2025 Ten Year Potential/2016‐2017 Biennial Target
Page 7 Appendix B – Federal Standards taking effect in 2015 Council Staff Presentation at the Conservation Resources Advisory Committee meeting on June 4, 2014 Peninsula Light I‐937 Compliance Plan 2016‐2025 Ten Year Potential/2016‐2017 Biennial Target
Page 8 Appendix C – Code Changes analyzed by NEEA From ‘Code Savings Forecast.xlsx’ provided by Ken Baker, Senior Manager, Codes and Standards for NEEA Peninsula Light I‐937 Compliance Plan 2016‐2025 Ten Year Potential/2016‐2017 Biennial Target
Page 9 Appendix D – 6th Power Plan Table E‐1, Estimated Cost‐Effective Potential5 5
Sixth Power Plan Appendix E: Conservation Supply Curve Development – Page E‐8, 9 & 10 Peninsula Light I‐937 Compliance Plan 2016‐2025 Ten Year Potential/2016‐2017 Biennial Target
Page 10 Peninsula Light I‐937 Compliance Plan 2016‐2025 Ten Year Potential/2016‐2017 Biennial Target
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