National Action Plan for Energy Efficiency

www.epa.gov/eeactionplan

NCSL Smart Grid Forum:The National Action Plan for Energy Efficiency

Stacy AngelClimate Protection Partnerships DivisionU.S. Environmental Protection Agency

Larry MansuetiOffice of Electricity Delivery & Energy Reliability

U.S. Department of EnergyApril 24, 2008

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Agenda

• Why are EPA are DOE involved?

• What & Who is the National Action Plan for Energy Efficiency?

• The Action Plan’s Vision and the Smart Grid

• Smart Grid Considerations

EPA & DOE EffortsEngage end-users, retailers, manufacturers, others in energy efficient products and services

Engage state decision-makers• Develop policy guidance and

tools• Catalogue best practices• Foster collaborative efforts

Provide assistance tostates when asked

• Document key policies• Demonstrate co-benefits• Sponsor peer exchange

EPA & DOE: Long History with Programs to address Persistent Barriers to Clean Energy

End-user / market barriers• Lack of information & funding• Competing vendor claims• Split incentives• Transaction costs

Utility barriers• Lack of knowledge on policy options• Policies may financially discourage

utilities from investing in efficiency• Perception that energy efficiency a

not reliable, cost effective resource • Concern efficiency will raise rates • Lack of good documentation and

knowledge on good programs

State decision-makers• Seeking good documentation on

clean energy policies, benefits• Integrating air-energy issues

www.epa.gov/cleanenergy & www.oe.energy.gov

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Quick, cheap, sizable, and clean resource

Action Plan MotivationEfficiency Helps Meets Today’s Challenges

• Environmental – Lower carbon emissions and

criteria pollutants– Lower water use

• Economic– Savings to customers– Lower cost (about half)

compared to new G&T – Downward pressure on natural

gas prices and volatility– Improved local economy, using

local labor– Benefits low–income, seniors

• Utility System Benefits– Near-term tool with persistent, long-

term benefits – Improved security of systems– Lower baseload and peak demand – Reduce need for “hard to site” G&T

assets– Targeted, modular, manageable

• Risk Management– Diversifies utility resource portfolios– Zero carbon emissions

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Action Plan MotivationPersistent Barriers Hinder EE Investments

• Market barriers– Split incentives – Transaction costs

• Customer barriers– Lack of information– Competing vendor claims– Lack of funding

• Public policy and utility regulatory barriers– Lack of good documentation on energy efficiency policy options– Misperception that energy efficiency is not a guaranteed, reliable cost effective

resource– Ratemaking policies may financially discourage utilities from investing in

efficiency– Resources planning processes may not consider energy efficiency resources

• Program barriers– Lack of good documentation and education on demand-side programs– Lack of knowledge about the most effective and cost-effective program portfolios

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• Released on July 31, 2006 at the National Association of Regulatory Utility Commissioners meeting

• Goal: To create a sustainable, aggressive national commitment to energy efficiency through gas and electric utilities, utility regulators, and partner organizations

• 60 member public-private Leadership Group developed five recommendations and commits to take action

• Commitments to energy efficiency by over 120 organizations

• Releases key resources to help parties meet commitments, including its Vision for 2025

• DOE & EPA only facilitate

National Action Plan for Energy Efficiency Recommendations

1. Recognize energy efficiency as a high-priority energy resource.

2. Make a strong, long-term commitment to implement cost-effective energy efficiency as a resource.

3. Broadly communicate the benefits of and opportunities for energy efficiency.

4. Provide sufficient, timely and stable program funding to deliver energy efficiency where cost-effective.

5. Modify policies to align utility incentives with the delivery of cost-effective energy efficiency and modify ratemaking practices to promote energy efficiency investments.

National Action Plan for Energy Efficiency Addresses Policy Barriers

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• Sets tone and overall direction of the Action Plan

• Released Action Plan Report and Recommendations

• Co-Chaired by:– Commissioner Marsha Smith, NARUC First Vice President and Member

of Idaho Public Utility Commission

– Jim Rogers, Chairman, President and CEO of Duke Energy

• Includes 60 leading electric and gas utilities, state utility commissioners, state air and energy agencies, energy services providers, energy consumers, and energy efficiency and consumer advocates– US DOE and US EPA only facilitate

Action Plan Leadership Group

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Leadership Group Members

– Entergy Corporation – Environmental Defense– Exelon – Food Lion – Great River Energy – Idaho Public Utilities Commission– ISO New England Inc. – Johnson Controls – Long Island Power Authority– MidAmerican Energy Company – Minnesota Public Utilities

Commission – National Grid– Natural Resources Defense

Council – New Jersey Board of Public Utilities – New Jersey Natural Gas – New York Power Authority – New York State Public Service

Commission– North Carolina Air Office – North Carolina Energy Office – Ohio Consumers' Counsel – Pacific Gas and Electric – Pepco Holdings, Inc.

– Alliance to Save Energy – American Council for an Energy-

Efficient Economy – Ameren– American Electric Power– Arkansas Electric Cooperative

Corporation– Arkansas Public Service

Commission– Austin Energy– Baltimore Gas and Electric – Bonneville Power Administration – California Energy Commission– California Public Utilities

Commission – Servidyne Systems– Connecticut Consumer Counsel– Connecticut Department of

Environmental Protection – Connecticut Department of Public

Utility Control – Delaware General Assembly – District of Columbia Public Service

Commission – Duke Energy

– PJM Interconnection– PNM Resources– Public Advocate State of Maine – Puget Sound– Sacramento Municipal Utility

District – Santee Cooper – Seattle City Light – Servidyne Systems– Southern California Edison – Southern Company – Tennessee Valley Authority – Texas State Energy

Conservation Office– The Dow Chemical Company – Tristate Generation and

Transmission Association, Inc. – USAA Realty Company – Vectren Corporation – Vermont Energy Investment

Corporation – Wal-Mart Stores, Inc. – Washington Utilities and

Transportation Commission – Waverly Light and Power – Xcel Energy

The Leadership Group includes 30 electric and gas utilities, 18 state agencies, and 13 other organizations:

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Observers to the Action Plan

– American Gas Association– American Public Power

Association– Association of Energy Engineers– Business Council for Sustainable

Energy– Consortium for Energy Efficiency– Council of Energy Resource

Tribes– Demand Response Coordinating

Committee– Edison Electric Institute– Electric Power Research Institute– Energy Programs Consortium– Gas Appliance Manufacturers

Association– Gas Technology Institute

– National Association of Energy Service Companies

– National Association of Regulatory Utility Commissioners

– National Association of State Energy Officials

– National Conference of State Legislatures

– National Council on Electricity Policy

– National Electrical Manufacturers Association

– National Rural Electric Cooperative Association

– North American Insulation Manufacturers Association

– Steel Manufacturers Association

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Commitments to Energy Efficiency

63Stakeholder education

26Aggressive energy savings goals

24Efficiency in resource planning

5Policies to align utility incentives

17New and expanded efficiency programs

4Additional energy efficiency spending

15State-level collaborative processes

No. of Orgs.Type of Commitment (sampling)

• Commitments from 122 organizations – 6 Governors– 15 Utility Commissions– 10 Other State Agencies– 11 Local Governments– 35 Utilities– 7 Large-end Users

– 38 Others

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Organizations That Endorsed the Five Action Plan Recommendations and/or Made Commitments to Energy Efficiency

• Advantage IQ• Alliance to Save Energy• Ameren• American Council for an Energy-

Efficient Economy • American Electric Power• American Gas Association• American Public Power Assoc.• Arkansas Public Service Com.• Arlington County, Virginia• City of Aurora, Colorado• Austin Energy• Bonneville Power Administration• Building Owners and Managers

Association International• Connecticut Departments of

Public Utility Control, Environmental Protection, and Office of Consumer Counsel

• Costco Wholesale• Delaware Public Service Com.• City of Denver, Colorado• Dominion Virginia Power• Dow Chemical Company

• EnerNOC, Inc. • Entergy Corporation• Exelon• Florida Public Service

Commission• Food Lion• Great River Energy• Hawaii Department of Business,

Economic Development & Tourism

• Hawaii Public Utilities Commission

• HTS Enterprise EERE Institute• Idaho’s Governor, PUC, Energy

Division, Depart. of Environmental Quality

• Indianapolis Power & Light • City of Indianapolis, Indiana• Iowa Governor, Utilities Board• ISO New England• Iowa Utility Association• Johnson Controls• Kankakee County Housing

Authority, Illinois

• California MOU Signatories: Governor Arnold Schwarzenegger, Public Utilities Commission, Energy Commission, Anaheim Public Utilities, Burbank Water & Power, Gridley Municipal Utilities, LA Department of Water & Power, Natural Resources Defense Council, Northern California Power Agency, Pacific Gas & Electric Company, City of Palo Alto Utilities, Pasadena Water & Power, Sacramento Municipal Utility District, San Diego Gas & Electric Company, Southern California Edison Company, Southern California Gas Co., Silicon Valley Power, City of Shasta Lake Electric Utility

• Duke Energy• Eastman Kodak• Edison Electric Institute• Efficiency Texas• Electric Power Research Institute• Energetics Incorporated• EnergySolve Companies

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Organizations That Endorsed the Five Action Plan Recommendations and/or Made a Commitment to Energy Efficiency

• Kansas Corporation Commission• King County, Washington• Large Public Power Council• Louisville Metro Gov’t, KY• Maryland Governor, Maryland

Energy Administration• City of Medford, MA• Mid-America Regulatory

Conference• MidAmerican Energy Company• Midwest Energy Efficiency Alliance• Midwest Independent Transmission

System Operator• Minnesota Public Utilities

Commission, Department of Commerce

• Town of Mountain Village, CO• National Association of Energy

Service Companies• National Rural Electric Cooperative

Association• National Association of State

Energy Officials• Natural Resources Defense Council

• New England Conference of Public Utilities Commissioners

• New Jersey Board of Public Utilities• New Jersey Natural Gas • New York State Public Service

Commission• North American Insulation Manufacturers

Association• Northeast Energy Efficiency Partnerships • Ohio Consumers’ Counsel Office• Oregon Governor, Public Utility

Commission, Department of Energy,Energy Trust of Oregon

• Orion Energy Systems• Pepco Holdings, Inc.• PNM Resources• Public Service Electric and Gas Co.• San Miguel County, Colorado• Santee Cooper• Seattle City Light• City of Somerville, Massachusetts• Southeastern Association of Regulatory

Utility Commissioners

• Southern Company • Stop & Shop/Giant Foods• Tennessee Valley Authority• Tri-State Generation and

Transmission Association• United Cooperative Services• United Technologies Corp.• USAA Realty• Utah Governor’s Office• Vectren Corporation• Vermont Energy Investment

Corporation • Vermont Public Service Board• Wal-Mart Stores, Inc.• Washington Utilities and

Transportation Commission• Waverly Light and Power• Western Conference of Public

Service Commissioners• Whole Foods Market• Public Service Commission of

Wisconsin• Xcel Energy • Xerox Corporation

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Action Plan Offers Resources To Help Parties Meet Their Commitments

• Papers:– National Action Plan for Energy

Efficiency Report -- 2006

– Vision for 2025: Developing a Framework for Change

– Aligning Utility Incentives with Energy Efficiency

• How-To Guides:– Model Energy Efficiency Program

Impact Evaluation

– Resource Planning with Energy Efficiency

– Conducting Energy Efficiency Potential Studies

• Regional Implementation Meeting Materials

• Education and Outreach:– Online Resource database

– Energy Efficiency Benefits Calculator

– Communications Kit

– Building Codes and Energy Efficiency Fact Sheet

– Consumer Energy Efficiency Fact Sheet

– Sample Educational Presentations

• Sector Collaborative on Energy Efficiency Materials:– Background Paper on Utility Data

Availability

– Commercial Customer Energy Consumption Profiles

www.epa.gov/eeactionplan

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The Action Plan’s Vision for 2025

• Released November 12, 2007• Long-term Aspirational Goal: To achieve all cost-effective energy efficiency

by the year 2025• Framework for implementing Action Plan recommendations

– Puts the 5 recommendations into Action– Is a living document; open to new ideas; will be refined– Is a plan – need to know where you want to go in order to get there– A challenge for new thinking

• 10 Implementation Goals– Action needed over next 10-15 years to help lay policy foundation by 2025– Action encouraged by various parties, utilities, utility regulators, state legislatures, governors,

energy offices, air offices, and all stakeholders

• Offers initial approach to measure progress– Measuring progress is vital to success– Currently being refined by Leadership Group

• Not a mandate; respects state processes – not one size fits all

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Vision’s 10 Implementation Goals

1. Establishing Cost-Effective Energy Efficiency as a High-Priority Resource

2. Developing Processes to Align Utilities Incentives Equally for Efficiency & Supply Resources

3. Establishing Cost-Effectiveness Tests

4. Establishing Evaluation, Measurement, and Verification Mechanisms

5. Establishing Effective Energy Efficiency Delivery Mechanisms

6. Developing State Policies to Ensure Robust Energy Efficiency Practices

7. Aligning Customer Pricing and Incentives to Investment in Efficiency

8. Establishing State of the Art Billing Systems

9. Implementing State of the Art Efficiency Information Sharing and Delivery Systems

10. Implementing Advanced Technologies

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Vision’s 10 Implementation Goals Address “Smart Grid”

4. Establishing Evaluation, Measurement, and Verification Mechanisms8. Establishing State of the Art Billing Systems

Consistent information on energy use & costs to customers9. Implementing State of the Art Efficiency Information Sharing and Delivery

SystemsExplore development and implementation of state of the art efficiency delivery information, including smart grid infrastructure, data analysis, two-way communication programs, etc.Explore methods of integrating advanced technologies to help curb demand peaks and monitor efficiency upgrades to prevent equipment degradation, etc.Coordinate demand response and energy efficiency programs to maximize value to customers

10. Implementing Advanced TechnologiesReview advanced technologies such as batteries, strategically integrated solar facilities, and other clean DG; ensure their adaptation into a broader resource plans for efficiency achievementsWork collectively to review advanced technologies and determine rapid integration time lines

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Achieving All Cost-Effective Energy Efficiency: Key Perspectives

• Efficient home envelope• Efficient windows, lighting, appliances• Efficient, properly sized/installed HVAC• Low-standby energy use• Verification of home energy efficiency• Grid-connected controls and appliances• Good information • Whole-building design

• Lower energy bills• Environmental benefits• Lower greenhouse gas emissions• Enhanced reliability• Low-income and elderly assistance• New jobs/growing local services• Increased fuel diversity

• Pursue all cost-effective EE resources• Universal efficiency services acrossall customer classes• Enhanced use of clean DG• Modernized grid supports greaterdata analysis, customer control,utility control of peak-drivingequipment, self-healing capabilities

• Energy-efficient equipment• Low-standby energy• Efficient lighting systems • Properly sized, efficient HVAC• Commissioning/recommissioning• Routine assessment of performance• Grid-connected controls/equipment• Good information• Whole-building design

• Efficient equipment/motor systems• Efficient lighting systems usinggood design, controls, daylighting,and efficient technology• Processes tuned for efficiency• Waste heat recovered and utilized• Good information

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Additional Discussion of Smart Grid in Vision for 2025

• Considering measuring progress in “investments in advanced metering, smart grid infrastructure, data analysis, and two-way communication to enhance energy efficiency”

• Identified among evolving technologies and practices to watch

• Related policies discussion will monitor PHEVs and smart appliances for how to effectively incorporate energy efficiency

• New technologies, such as advanced meters and smart appliances/controls

• Data collection networks and data analysis to enhance energy efficiency

• New customer interfaces • Increased interoperability

• Consistent energy use and energy cost information available to all customers

• Customers connected with two-way electricity grid

• Delivery of energy efficiency enhanced through diagnostics

• Customer energy use is not routinely linked to the energy system

Demand response,advancedmetering,and smartgrids

Changes to WatchLong TermNowPolicy Area

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Action Plan Next Steps Touch on Smart Grid-Related Issues

• Outreach, Training and Recognition – Broad outreach including periodic newsletter to share information / spotlight efforts– Increased outreach to key stakeholder groups

• Additional resources to assist in meeting Vision implementation goals– Coordination between energy efficiency and demand response– Initiative to promote standardized energy cost and use information to customers– State and Local government lead-by-example energy efficiency efforts– Customer incentives for energy efficiency*– Additional guidance on defining cost-effectiveness of programs*– More detailed work on codes and standards*– Energy efficiency program design and implementation*

• Additional resources to assist in linking/addressing emerging issues/related policies– Energy efficiency workforce planning issues– Efficiency to assist in meeting carbon goals*– Outlining the most energy efficient economy in the world*

• Refinement of Measuring Progress toward the 2025 Vision* = Further scoping underway

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Issue Paper: Efficiency as a Low-Cost Resource for Achieving GHG Reductions

• Objectives– Summarize EE programs and policy approaches used in GHG

strategies across the U.S.– Show (through state/regional examples) the benefits of cost-

effective EE on reducing costs of achieving greenhouse gas reductions.

– Show price signals are insufficient to fully realize the cost-effective EE resource in the U.S.

• Persistent market barriers that hinder investment in EE

– Outline suite of EE policies/programs that address key market barriers and help capture available cost-effective potential (drawing on existing Action Plan work)

• Status– High priority for Leadership Group– Work likely to begin shortly and be completed in ‘09

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Legislators are Key to Advancing Energy Efficiency

• Across the country, legislators both independently and through teaming with other key stakeholders (state agencies, NGO’s) are advancing energy efficiency

• How to get involved in the Action Plan:– Look into energy efficiency in your state. Key questions include:

• Does your state have an energy plan?

• Is cost-effective energy efficiency a high priority resource?

• Is your state leading by example on energy efficiency?

• Are your state’s utilities supporting cost-effective energy efficiency programs?

– Help to spread the word on the benefits and opportunities of efficiency

– Make a commitment to energy efficiency under the Action Plan

• Multiple federal programs/tools are available to help advance the Action Plan recommendations.

Smart Grid Opportunities to Watch

• Enabling technology for clean energy, including energy efficiency, renewables, and clean distributed generation • Enables clean energy as a resource to meet load and grid support

• Energy efficiency and clean energy critical to low-cost carbon reductions

• Potential for robust, consistent measurement and verification (M&V) of energy efficiency efforts• Critical to ensure reliability and quantify savings

• Provide information to customers • Critical to supporting customer investments in energy efficiency

and clean energy

• Need to continue to think critically on how to maximize reliability, security, affordability, environmental benefits when pursuing the smart grid

DOE