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What does the future hold for utility electricity efficiency programs?

Here, this study develops projections of future spending and savings from electricity efficiency programs funded by electric utility customers in the United States through 2030 based on three scenarios. Our analysis relies on detailed bottom-up modeling of current state energy efficiency policies, demand-side management and integrated resource plans, and regulatory decisions. The three scenarios represent a range of potential outcomes given the policy environment at the time of the study and uncertainties in the broader economic and state policy environment in each state. We project spending to increase to $8.6 billion in 2030 in the medium scenario, about a 45 percent increase relative to 2016 spending. In the high case, annual spending increases to $11.1 billion in 2030 and remains relatively flat in the low case ($6.8 billion in 2030). Our analysis suggests that electricity efficiency programs funded by utility customers will continue to impact load growth significantly at least through 2030, as savings as a percent of retail sales are forecast at 0.7 percent in the medium scenario and 0.98 percent in the high scenario.

32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATI↗

Peak Demand Savings from Efficiency: Opportunities and Practices [Slides]

Electricity systems are designed to meet peak demand - the maximum load during a specified period, typically in summer - even if that demand occurs only a few hours in a year. Yet most evaluations of electricity efficiency programs focus on reductions in annual energy use. However, these efficiency programs are also delivering peak demand savings at an affordable cost. A new study by the Department of Energy’s Lawrence Berkeley National Laboratory (Berkeley Lab) explores the program administrator (PA) cost - or the cost to implement an energy efficiency program to a utility or third party administrator - of saving peak demand through efficiency programs for electric utility customers. Berkeley Lab collected data on costs, annual energy savings, and peak demand savings for electricity efficiency programs for 52 utilities and other program administrators in 15 states between 2014 and 2018. The analysis focused on eight program types that represent 68% of the peak demand savings for the utilities and program administrators studied. The findings improve our understanding of which energy efficiency programs produce the most peak demand savings and their cost performance.

32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATI↗

The Cost of Saving Electricity: A Multi-Program Cost Curve for Programs Funded by U.S. Utility Customers

This study analyzed the cost performance of electricity efficiency programs implemented by 116 investor-owned utilities between 2009 and 2015 in 41 states, representing about three-quarters of the total spending on U.S. efficiency programs. We applied our typology to characterize efficiency programs along several dimensions (market sector, technology, delivery approach, and intervention strategy) and report the costs incurred by utilities and other program administrators to achieve electricity savings as a result of the programs. Such cost performance data can be used to compare relative costs of different types of efficiency programs, evaluate efficiency options alongside other electricity resources, benchmark local efficiency programs against regional and national cost estimates, and assess the costs of meeting state efficiency policies. The savings-weighted average cost of saved electricity for the period was $0.025/kilowatt-hour (kWh). The cost of saved electricity for programs that targeted residential customers was $0.021/kWh, compared to $0.025/kWh for programs for commercial and industrial customers. Ultimately, we developed an aggregate program savings “cost curve” for the actual electricity efficiency resource during the period that provides insights into the relative costs of various types of efficiency programs and the savings contribution of each program type to the efficiency resource at a national level.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Predicting the Impact of Utility Lighting Rebate Programs on Promoting Industrial Energy Efficiency: A Machine Learning Approach

Implementation costs are a major factor in manufacturers’ decisions to invest in energy-efficient technologies. Emerging technologies in lighting systems, however, typically require small investment costs and offer short, simple payback periods, due, in part, to federal, state, and utility incentive programs. Recently, however, certain state and federal mandates have reduced the support for and efficacy of electricity utility incentivizing programs. To determine the impact of such support programs, this study examined historical data regarding lighting retrofit savings, implementation costs, and utility rebates gathered from 13 years of industrial energy audits by a U.S. Department of Energy Industrial Assessment Center in a midwestern state. It uses a machine learning approach to evaluate the industrial energy and cost-saving opportunities that may have been lost due to decisions attributable to legislative mandates, utility policies, and manufacturers’ calculations and to evaluate the potential effect of lighting rebates on manufacturers’ decisions to implement industrial energy-efficient lighting retrofits. The results indicate that the decision not to implement lighting energy efficiency recommendations resulted in a loss of more than USD800,000 in potential rebates by industries during the study period and that the implementation of lighting energy assessment recommendations could have increased by about 50% if electric utility rebates had been available. These findings can help industries evaluate the benefits of implementing lighting efficiency improvements, and help utilities determine feasible lighting retrofit rebate values for incentivizing such changes by the industries they serve.

32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATI↗

National Electric Vehicle Infrastructure Formula Program (NEVI) Brief for State Public Utility Commissions

The National Electric Vehicle Infrastructure (NEVI) Formula Program (NEVI program) is a funding opportunity for all 50 U.S. states, the District of Columbia, and Puerto Rico, established by the Bipartisan Infrastructure Law (BIL). The NEVI program instructs states to “strategically deploy electric vehicle (EV) charging infrastructure and to establish an interconnected network to facilitate data collection, access, and reliability.” The NEVI program allocates more than $\$$5 billion to states from Fiscal Year (FY) 2022 to 2026 on a formula basis. NEVI funds are available to private entities, including utilities, to build EV Supply Equipment (EVSE)1 and associated EV grid infrastructure.

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Estimating the Drivers of the Cost of Saved Electricity in Utility Customer-Funded Energy Efficiency Programs

Energy efficiency programs funded by utility customers provide an electricity resource in most U.S. states, but their scale and cost of saving electricity varies significantly by state. In this paper, we explore the drivers of the cost of saved electricity in these programs with an econometric model and nearly a decade of data reported by efficiency program administrators. We found strong evidence for economies of scale and weak evidence for diseconomies of scale, which suggests that states with low levels of efficiency savings relative to retail sales can increase the size of their efficiency programs without large increases to the cost of saved electricity. We discuss examples of energy efficiency forecasting and potential modeling in light our econometric analysis and identify methodological improvements relevant to utilities and grid operators. This paper provides insights into the economics of customer-funded efficiency programs that will support regulators, utilities, and policymakers to utilize energy efficiency as a resource.

32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATI↗

Winners are not keepers: Characterizing household engagement, gains, and energy patterns in demand response using machine learning in the United States

Demand-response programs can help utilities manage rapidly evolving electric grids, but these programs are subject to the complexities of human behavior. This paper explores a novel method for uncovering heterogeneity in households. In this work, we use a machine-learning method known as a Conditional Inference Tree (c-tree) algorithm to categorize households based on their energy behavior characteristics collected via smart meters, and explore how this translates through into heterogeneity in their real-world response to a DR program. Using data from randomized controlled trial, we generate estimates of the changes in energy use caused by the program within each household group. Our results show that the c-tree approach differentiates households by their energy-use characteristics in a way that increases the spread in enrollment rates and critical peak reduction among household groups, compared with the spreads achieved via several conventional segmentation methods. Thus, the c-tree analysis enables the most tailored targeting of major potential energy savers and could provide the greatest increase in cost-effectiveness of household recruitment into DR programs. Our results also offer fresh insights into the relationships between household energy behavior characteristics – such as peak energy use and “structural winningness” (the ability to save money under a DR program without changing energy-use behaviors) – and household decisions about enrolling in DR programs and reducing energy use. Our research also demonstrates the potential of smart meter data, combined with machine learning and econometric methods, to provide significant value to utilities, program implementers, researchers, and other stakeholders.

32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATI↗

Utility Combined Heat and Power (CHP) Programs

This issue brief provides an overview of energy efficiency portfolios offered by electric and gas utilities that include CHP incentive programs, with examples of program drivers, structures, and eligibility criteria. The document discusses best practices for designing and administering a utility CHP incentive program, including cost-effectiveness tests and market outreach strategies.

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Who is participating in residential energy efficiency programs? Exploring demographic and other household characteristics of participants in utility customer-funded energy efficiency programs

In addition to benefiting all customers by reducing the total electric system cost, utility customer-funded energy efficiency programs provide direct benefits to the participants. Understanding the current demographic and household characteristics of participants will help assess the extent of inequities in program participation and figure out what characteristics need to be targeted to achieve equitable outcomes. This report describes how 11 demographic and household characteristics including income, race and ethnicity, and education affect participation in residential utility customer-funded energy efficiency programs. It compiles previous work on this topic and adds new primary analysis of four datasets with different levels of detail from the Residential Energy Consumption Survey (RECS), two New England states, and a Midwestern state.

32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATI↗

Improving the Cyber and Physical Security Posture of the Electric Sector (Final Report)

Cooperative electric utilities represent an integral part of the larger electric grid and are part of the nation’s critical infrastructure. The National Rural Electric Cooperative Association (NRECA) has a unique relationship with approximately 900 cooperatively owned and operated electric utilities and engaged in a program with the Department of Energy (DOE) to promote a culture of cybersecurity and resiliency within the electric cooperative community. The Rural Cooperative Cybersecurity Capabilities (RC3) Program, funded under a Cooperative Agreement with DOE (Project DE-OE-0000807), focused on improving the cybersecurity and resiliency capabilities of small and mid-sized electric distribution cooperatives. This segment of electric utilities faces many challenges, but also embraces a culture of cooperation that presents opportunities. A customized approach is needed to reach these utilities – one that emphasizes collaboration, more focused and personalized training, use of trusted and familiar experts that can be deployed as needed, software security services that require limited in-house cybersecurity expertise, and shared resource models that enable access to more expensive cybersecurity options.

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Utility Programs Supporting Customer-Sited Battery Storage: Program Design to Ensure Mutual Benefits

Behind-the-meter (BTM) battery storage, when paired with solar, can benefit customers, utilities, and the electric grid. Some utility-sponsored programs have been implemented offset the cost of customer-owned batteries and recognize the value of batteries to the utility and the grid. This factsheet summarizes existing utility-sponsored battery programs and the value to the stakeholders. It then highlights Wattsmart, the customer-owned battery program offered by Rocky Mountain Power in Utah, and provides lessons-learned from a close look at the impact of the program design on commercial customer participation.

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Will Consumers Really Pay for Green Electricity? Comparing Stated and Revealed Preferences for Residential Programs in the United States

Public support is growing for policy initiatives to spur a transition from a fossil to renewable energy portfolio in the electricity sector. Some utilities in the United States offer programs that allow consumers to voluntarily pay premiums (0.1-7.0 cents/kWh) for electricity from renewable sources. However, it is unclear whether public support translates to paying for green electricity if given the option. Our analysis employs data from two national, longitudinal surveys on energy attitudes and willingness to pay for renewables to investigate whether environmental concerns and stated preferences for renewable energy translate to consumer behavior as measured through ratepayer participation in voluntary utility renewable energy programs known as utility green pricing. We find higher green pricing program participation rates in areas where consumers have stronger feelings about the environmental impacts of energy. Consumers in high-participation areas also have a higher stated willingness to pay for renewable energy, on average, than consumers in low-participation areas. We also find income, homeownership, and home value explain some of the difference between high- and low-participation programs. Further, program participation is lower in areas where utilities charge higher green pricing program premiums. These findings suggest that green power programs - such as utility green pricing - offer a market-based mechanism for consumers to realize their desire to purchase renewable energy. Policymakers may use these results to support further expansion of green power programs in areas where customers currently lack accessible and affordable options to act on their environmental beliefs and concerns.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Opportunities and Challenges to Capturing Distributed Battery Value via Retail Utility Rates and Programs

Distributed battery deployment is increasing with advanced metering, control, and communication technologies, leaving electric utilities with an under-utilized, flexible grid resource in aggregate. Rates can reflect locational and temporal prices while utility incentive-based programs allow DERs to provide direct grid services. However, utilities must balance accurately reflecting dynamic grid conditions versus simple and feasible design that encourages customer participation. Currently, most rates and incentive-based programs are simple, but as penetration of DER and advanced controls increase, dynamic designs could become prevalent. Utilities could encourage providing multiple services to optimize distributed battery dispatch and value streams, however, challenges persist when stacking services across distribution and bulk systems. A DER committed to multiple discrete services concurrently necessitates coordination between operators and a clear hierarchy of commitments. One way to address this is to separate commitments by time or capacity. For services that follow cyclic, predictable patterns, or those that are peak driven with predictability, an operator could ensure sufficient state of charge for participation, leaving time where a distributed battery could otherwise provide different services by segmenting participation temporally. To provide continuous or unexpected services, a battery operator may use state of charge management to reserve some percentage of the battery and segment participation by capacity. Macroeconomic trends, load patterns, generation profiles, and grid configurations drive variation in value and the subsequent implications for utility offerings and how a customer might participate. As distributed battery adoption increases, both regulators and utilities will need to ensure no adverse grid impacts and encourage provision of societal value beyond the customer domain.

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Low-Income Energy Affordability: Conclusions From A Literature Review

This paper examines the persistent problem of high energy burdens among low-income households, based on a review of more than 180 publications that pointed to several promising opportunities to address energy affordability including inclusive solar programs, leveraged health care benefits, and behavioral economics. using an equity and affordability lens. Even after decades of weatherization and bill-payment programs, low-income households, on average, continue to spend a higher share of their income on electricity and natural gas bills than any other income group. Energy burden for low-income households is not declining, and it remains persistently high, particularly in the South, in rural America, among minority households, and those with children and elderly residents. On a per household basis, utility companies spend less on energy-efficiency programs for low-income households than for other income groups. In addition, government and utility programs that promote rooftop solar power, electric vehicles, and home energy storage are largely inaccessible to low-income households. Our review identifies promising opportunities to address energy affordability including inclusive solar programs, leveraged health care benefits, behavioral economics, data analytics, advanced information and communication technologies, and grid resiliency. Scalable approaches require linking implementing agencies, programs and policies to tackle the complex web of causes and impacts on low-income households with high energy burdens.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

The State of Demand Flexibility Programs and Rates

This report provides foundational data on programs and rates that promote demand flexibility in residential and commercial buildings in the United States. Leveraging a dataset of 148 programs and 94 rates collected through a review of utility websites, published electricity tariffs, and a database of demand-side programs, we describe the structure of demand flexibility events and the types and levels of incentives offered. For the two most common program types in our dataset—Wi-Fi thermostat and battery storage programs—we provide additional details on program designs. We also report data on program outcomes, including enrollment and participation, energy and demand savings, and costs. Furthermore, we describe the structure of dynamic rate events, report prices for critical peak pricing and variable peak pricing rates, and describe features of technology rates.

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State Technical Assistance - New Mexico Energy and Conservation Management Division Report [Slides]

The New Mexico Energy and Conservation Management Division (ECMD) sought technical assistance to enhance their ability to evaluate program impacts using the Low-Income Energy Affordability Data (LEAD) tool. NLR assisted ECMD in leveraging the LEAD tool to calculate and analyze energy burden across electric utility service areas, enabling them to assess program outcomes more effectively. To meet ECMD's goals, NLR developed a customized methodology to calculate utility-specific energy burden metrics using census tract data and available utility service area information from the Energy Information Administration (EIA). While acknowledging some limitations in the EIA dataset, NLR estimated the percentage of households within each service territory and incorporated relevant filters such as income, housing characteristics, and other demographics from the LEAD tool. The analysis provided ECMD with a new capability to evaluate program success based on energy savings, reductions in energy burden, and other performance indicators. The data and methodology also support discussions with utilities to improve the accuracy of service territory datasets. ECMD can use the outputs to track program effectiveness and plan future initiatives. NLR offered the possibility of follow-on work, including capacity-building for ECMD to repeat the analysis independently and the option to refine the analysis with updated service.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Advancing Grid Resilience through Smart Charge Management: Findings from Maryland’s Pilot

This report presents research findings from a four-year Smart Charge Management (SCM) pilot program conducted by Maryland’s largest electric utilities—Baltimore Gas and Electric (BGE), Potomac Electric Power Company (Pepco), and Delmarva Power & Light (DPL)—to evaluate strategies for optimizing electric vehicle (EV) charging loads and enhancing grid stability. Supported by the U.S. Department of Energy (DOE), Argonne National Laboratory collaborated with all project partners and examined the effectiveness of Time-of-Use (TOU) and Load Balancing (LB) strategies in managing peak demand, deferring costly infrastructure upgrades, and reducing grid constraints at the feeder level.

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