THE NATIONAL ASSOCIATION OF
STATE UTILITY CONSUMER ADVOCATES
RESOLUTION 2009 – 02
PRINCIPLES FOR ENERGY EFFICIENCY PROGRAMS OF THE
NATIONAL ASSOCIATION OF
STATE UTILITY CONSUMER ADVOCATES
Whereas, energy efficiency programs can effectuate a reduction in energy load;
Whereas, when energy efficiency is fairly projected to be the least cost resource, it should be the preferred resource in a prudent resource planning and acquisition practice;
Whereas, energy efficiency benefits can be enhanced by effective and efficient processes for program development, administration, and delivery;
Whereas, energy efficiency can achieve tangible and measurable economic and societal benefits and produce reliable and quantifiable results to benefit ratepayers;
Whereas, greater energy efficiency can help in addressing environmental concerns; and
Whereas, energy efficiency programs can supplement other policies and mechanisms that promote energy efficiency objectives irrespective of funding source;
NOW THEREFORE, NASUCA RESOLVES:
To continue its long tradition of support for the adoption of cost-effective energy efficiency programs as a means to reduce customer utility bills, help mitigate the need for new utility infrastructure, and provide important environmental benefits; and
BE IT FURTHER RESOLVED:
That NASUCA supports the following principles to ensure that all energy efficiency program efforts are cost-effective, efficiently administered, and include reasonable policies and procedures for the fair and equitable treatment of all consumers:
1. That energy efficiency programs should clearly define criteria, determine baselines, and set measureable benchmarks that reflect program goals, recognizing that states may have goals for energy efficiency beyond resource goals.
2. That energy efficiency program savings should be evaluated, measured and verified in a scientific, research-based manner, including the following:
- Energy efficiency programs should be evaluated by independent entities having no financial or other conflict of interest, and program managers should not be participants in the evaluation process beyond the provision of necessary information to the evaluator;
- Energy efficiency program evaluations should be based on clearly defined protocols with a focus on impact analysis including data such as billing analysis and measured load shapes;
- To the extent advanced metering is available, it should be used to gather data for verification of savings and provide usage and cost information to customers;
- Energy efficiency program evaluation results should provide feedback to improve programs;
- Energy efficiency program evaluation resources should be targeted toward categories, programs, and projects that are largest or with the most uncertainty in savings estimates;
- Energy efficiency programs should have comprehensive evaluations and audits every two to three years;
- Budgets for evaluation, measurement and verification should be sufficient but reasonable.
3. That development, implementation, and administration of energy efficiency programs should be done in a cost-effective and highly efficient manner, including the following:
- Independently evaluate, on a periodic basis, the least cost alternatives for administering and delivering energy efficiency programs, where possible through a competitive bidding process;
- Develop and implement uniform guidelines and best practices for managing energy efficiency program administrative costs, which should facilitate a transparent determination of the extent to which energy efficiency programs satisfy least-cost criteria and efficiency goals.
4. That the following means should be actively promoted to increase energy efficiency program efforts that provide optimal solutions to meet customer needs:
- Provide appropriate and targeted education to consumers about energy efficiency and how they can manage their energy bills and get more value;
- Provide access to accurate information about consumer energy efficiency investment options, including conservation practices, consideration of fuel choices, associated energy and bill savings, and environmental impacts.
- While recognizing that some localities may require programs that are unique to their own needs, support the continued development of consistent statewide energy efficiency programs that address all major fuel types; consider implementing a collaborative process for utilities and other stakeholders to further coordinate and improve program design and program delivery;
- Where customer subsidies for clean and renewable energy are available, cost-effective energy efficiency measures should be implemented in a lest cost manner to leverage the value of those subsidies and ratepayer dollars.
5. That market transformation, the strategic and deliberate intervention in a market to remove barriers to energy efficiency adoption, is a tool to ensure that ratepayer-funded energy efficiency programs have long-term value so that when ratepayer subsidies are removed, permanent customer adoption of energy efficiency behaviors remain:
- Energy efficiency programs should, therefore, articulate a transition from ratepayer subsidies to market-based EE;
- Market transformation is relevant to both opportunities to pursue shorter-term and easier to achieve measures as well as EE programs that choose to pursue more innovative, comprehensive long-term solutions.
6. Where shareholder financial incentive mechanisms for energy efficiency programs are mandated, incentive mechanisms must, at a minimum, adhere to best practices such as:
- Precisely define the nature of the incentive program;
- Ensure that rewards paid are commensurate with savings actually achieved
- When considering incentive options, evaluate the cost of proposed incentives alongside energy efficiency savings projections to assure that incentives are directly related to achievements;
- For each measure and the entire energy efficiency portfolio, periodically identify all costs including incentives, identify all savings, evaluate the reasonableness of costs versus savings, and publish results;
- Utilize a smooth earnings curve to avoid sharp, sudden increases in penalties or profits;
- Ensure that all desired end-goals are incented to avoid an imbalance in program focus;
- Avoid incentive mechanisms, such as performance earnings basis (PEB) shared savings rate, that shift program strategic focus to incentives rather than to energy savings.
BE IT FURTHER RESOLVED that NASUCA authorizes its Executive Committee to develop specific positions and to take appropriate actions consistent with the terms of this resolution. The Executive Committee shall advise the membership of any proposed action prior to taking such action, if possible. In any event, the Executive Committee shall notify the membership of any action taken pursuant to this resolution.
Approved by NASUCA: Submitted by:
Place: Boston, MA NASUCA Electricity Committee
Date: June 30, 2009