Demand-Side Management Models & Practices in California

Innovating for Sustainable Results: Integrated Approaches for Energy, Climate, and the Environment

Demand-Side Management Models & Practices in California

Innovating for Sustainable Results: Integrated Approaches for Energy, Climate, and the Environment

Presented by Gene RodriguesDirector of Energy Efficiency

Southern California Edison January 8, 2008

2008 Symposium on Innovating for Sustainable Results – Chapel Hill, North Carolina

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One of the country’s largest investor-owned utilities 50,000 sq. miles / 13 million

customers, including over 5,000 large industrial/commercial customers / 430 cities, including 5 of the 25 fastest growing U.S. cities

Environmental leadership We partner with our customers to

save more electricity through energy efficiency than any U.S. utility for the last 6 years

Largest private EV fleet in the country

Edison SmartConnect wins industry leadership award

Largest DR portfolio in California

Utility Total MWh Saved

Southern California Edison

8,901,686

Pacific Gas & Electric 6,232,939

Northern States Power 3,787,182

Florida Power & Light 3,663,877

Connecticut Light & Power

2,118,687

Puget Sound Energy 2,086,208

PacifiCorp 2,052,368

Massachusetts Electric 1,990,984

Boston Edison 1,346,101

Interstate Power & Light 1,136,646

Minnesota Power 892,802

MidAmerican Energy 657,216

Top U.S. Utility Energy-Efficiency Programs, 92-05Savings shown in megawatt-hours (MWh) or thousands of kWh.

Introduction: About Southern California Edison

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World’s 6th largest economy California’s Energy Action

Plan first adopted in 2003, specifies energy efficiency and demand response as the first resource in California’s energy “loading order”Cost-effective EE and DR

must be pursued before supply-side options

After EE and DR, renewable resources are California’s first supply-side options

Three-point business modelRecovery of reasonably-incurred program costDecoupling = Cuts link between sales and revenuesReinstatement of a shareholder earnings mechanism for EE

California’s DSM Models & Practices: Establishing California’s Policy Objectives

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World’s 12th largest source of carbon dioxide

California Global Warming Solutions Act = Reduce California GHG levels to:2000 levels by 2010 (11%

below business as usual)1990 levels by 2020 (25%

below “business as usual”)

California’s DSM Models & Practices: Establishing California’s Policy Objectives

5*Source: Arthur H. Rosenfeld, California Energy Commission, April 22, 2005

California Per Capita Electricity Consumption*

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Resource Gap

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

MW

Generation Resources and Purchased Power Contracts(expiring contracts and retiring plants reduce the level of committed resources over time)

Electric Demand Plus Reserves(demand increases over time due to customer/usage growth)

Energy Efficiency Reductions

GAP (the resource gap is filled through competitive solicitations, bilateral negotiations, and utility generation)

Illustrative

Demand Response Reliability Programs

Demand Response Economic Programs

“ ”

• Reduces purchase requirements for base load energy, peak demand, and associated reserve requirements

• Price responsive programs are used as load modifiers

• Programs which lack sufficient operating experience are not counted at full value.

• Reliability programs are treated as a supply resource.

• Reduces purchase requirements for capacity and associated reserve requirements.

DSM in the Long-Term Resource PlanResource Planning Is The Process of Identifying And Filling The Future Resource Need

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EE Public Goods Charge Legislatively-mandated, non-

bypassable systems benefits chargeSets “floor” amount for

energy efficiencyLow income EE levels set

on “needs” basis

EE Procurement Funding Goals and amounts established

in Long-Term Resource PlanUtilities apply for funding

based on ability of EE to meet resource need

Amount recovered in rates along with other generation-related expense

=

DSM in the Long-Term Resource Plan:

Adopting Funding Levels

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EfficientBuildingSystems

UtilityCommunications

DynamicSystemsControl

DataManagement

DistributionOperations

DistributedGeneration& Storage

Plug-In Hybrids

SmartEnd-UseDevices

ControlInterface

AdvancedMetering

Consumer Portal& Building EMS

Internet Renewables

PV

All new residential construction in California will be zero net energy by 2020

All new commercial construction in California will be zero net energy by 2030

Heating, Ventilation, and Air Conditioning (HVAC) industry will be reshaped to ensure optimal equipment performance

Maximize Savings by Integrating DSM Offerings for the Customer

Implement “Next Generation” California EE Programs

“Big & Bold” Long-Term Initiatives

Leading the Way: Next Generation Programs

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Resource Acquisition Benefits of California Investor-Owned Utilities’ 2006-08 EE Programs “The utilities project that ratepayer investment in energy

efficiency will be capable of avoiding three giant (500 MW) power plants over the next three years.”

Over the 2006-08 timeframe, the California utilities’ energy efficiency programs are expected to save over 7 billion kWh and reduce peak load by over 1,500 MW

California Results: EnergyCalifornia Results: Energy

2000

4000

6000

8000

10000

12000

14000

16000

1960 1965 1970 1975 1980 1985 1990 1995 2000

Year

kW

h

U.S.

California

Western U.S. (less CA)

*Source: EIA, CEC

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Environmental Benefits of California Investor-Owned Utilities’ 2006-08 EE Programs

“[T]he lifetime electricity savings that result from measures installed during that period will reduce global warming pollution by an estimated 3.4 million tons of carbon dioxide in 2008, equivalent to taking about 650,000 cars off the road.”

California Results: EnvironmentCalifornia Results: Environment

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Facts: “The total investment in energy

efficiency during 2006-08 is projected to produce $2.8 billion in net resource benefits (resource benefits minus costs).”

“Projected total resource savings to ratepayers (avoided utility generation and electric power and natural gas purchases, transmission and distribution costs) are over $5.4 billion over the life of the measures.”

“Total costs estimated at $2.7 billion (including customers’ out-of-pocket expenditures for energy efficiency measures/equipment).”

California Results: EconomyCalifornia Results: EconomyRatepayer Benefits of Investor-Owned Utilities’ EE Programs

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Conclusion

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Thank You! For more information, please contact:

Gene RodriguesDirector of Energy EfficiencySouthern California Edisongene.rodrigues@sce.com

Additional information about energy efficiency in California available at:

Southern California Edisonwww.sce.com/

California Public Utilities Commissionwww.cpuc.ca.gov/

California Energy Commissionwww.energy.ca.gov/

Flex Your Powerwww.fypower.org/