Our curious readers might be itching to know if MEEA is at the forefront of the distributional equity analysis (DEA) implementation effort, so I’m happy to share that we are participating in a DEA case study taking place in Illinois! The case study, funded by the Joyce Foundation and E4TheFuture, consists of team members from E4TheFuture, Synapse Energy Economics and MEEA.
In October, I shared a panel at ACEEE’s Energy Efficiency as a Resource conference in Philadelphia with Mohit Chhabra of NRDC. I spoke about how states and utilities in the Midwest have started to apply the principles of the NSPM Benefit Cost Analysis (BCA) framework to cost-effectiveness testing. Mohit spoke about a metric in use in California called the Total System Benefit (TSB), which measures the economic value of efficiency programs for the electric grid.
Since 2017, MEEA has been promoting the National Standard Practice Manual for Energy Efficiency (NSPM for EE) around the Midwest. We’ve held webinars, spoken on conference panels and included information from it in numerous presentations. The NSPM for EE provided the collective expertise of nationwide experts to create a framework for benefit-cost analysis (BCA) that incorporated the lessons we have learned from using the old California cost-effectiveness testing models for three decades.
In the 36 years since the California Standard Practice Manual (CaSPM) was first released, cost-effectiveness testing has spread across the country following the growth of utility customer-funded energy efficiency. The California tests have been adopted by utilities, consultants, regulatory commissions and legislators to determine whether an energy efficiency measure or program is worth pursuing and whether a completed program performed as expected. Fundamentally, a cost-effectiveness test measures the total benefits divided by the total costs, and passes if the ratio is greater than or equal to 1.0.
E4TheFuture interviewed various regional energy efficiency organizations (REEOs) about their reflections on the National Standard Practice Manual (NSPM). MEEA's Greg Ehrendreich spoke with E4TheFuture about the NSPM's uptake in the Midwest, and their conversation is excerpted below. To see responses from the other REEOs, read their full blog.
Cost-effectiveness testing is an important part of energy efficiency planning, reporting and evaluation. Utilities use cost-effectiveness tests to demonstrate that their investments in energy efficiency are in the best interests of the utility, their customers and society in general. The traditional tests come from a California Public Utility Commission manual that was developed in the early 1980s and last updated in 2001.
"Using energy efficiency as an energy resource" similar to supply-side resources is a phrase often repeated by those working in the efficiency industry. That sounds good, but how exactly do we capture the value of energy efficiency? And what policy and regulatory practices are used to do this? Three regulatory constructs are at the forefront of the answer to these questions: cost-effectiveness tests, integrated resource planning (IRP) and technical reference manuals (TRMs). As with many great meetings of the minds, MEEA members congregated in Rosemont, Illinois on June 15 to explore these questions and topics in a workshop titled “Valuing Energy Efficiency.”
Over the last year, MEEA launched an initiative aimed at helping members better understand the intelligent efficiency revolution now upon us. This effort, which began as a simple collaborative for meeting and sharing knowledge, revealed that many stakeholders have both a strong interest in learning more about the application of intelligent efficiency concepts and technology, but also reluctance about technical details, new products and vendors, EM&V and other challenges.