Center for Energy and Environment

Development of Utilities Conservation Programs and Cost

Effective Analysis

Sheldon Strom Russ Landry, PE, LEED® AP Executive Director Mechanical Engineer

Center for Energy and Environment212 North 3rd Ave, Suite 560

Minneapolis, MN 55401612-335-5858

www.mncee.org

June 15, 2009

Center for Energy and Environment

June 15, 2009

Excerpts from SB 2030 Legislation216B.241 Subd. 9: Cost Effectiveness

“A performance standard must not be established or increased absent a conclusive engineering analysis that it is cost-effective based upon established practices used in evaluating utility conservation improvement programs.”

Center for Energy and Environment

June 15, 2009

Cost Effectiveness Analysis for SB 2030:Recently Compiled Results

Key Observations Savings in ballpark of SB2030 can be cost-

effective for a variety of buildings, although less so for some

No clear patterns of reduced cost-effectiveness as % savings increases

Utility programs could make SB2030 standards more cost-effective to building owners (& still cost-effective to utilities) with larger incentives

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15

30

45

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5.0

10.0

15.0

Societal Ben-Cost Ratio

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5.0

10.0

15.0

Participant Ben-Cost Ratio w/Utility Discount Rate

0.0

5.0

10.0

15.0

Electric Utility Ben-Cost Ratio

Center for Energy and Environment

June 15, 2009

Excerpts from SB 2030 Legislation216B.241 Subd. 9: CIP Programs

“(e) The commissioner shall require utilities to develop and implement conservation improvement programs that are expressly designed to achieve energy efficiency goals consistent with the Sustainable Building 2030 performance standards. These programs must include offerings of design assistance and modeling, financial incentives, and the verification of the proper installation of energy-efficient design components in new and substantially reconstructed buildings.”

Center for Energy and Environment

June 15, 2009

CIP Program Design & Support

Major goals/challenges for CIP programs related to SB 2030 standard Creating incentives for reaching SB2030

standards within existing design assist-ance programs

Building comprehensive design assistance programs for additional service territories

Establishing comprehensive & effective CIP program(s) for small buildings

Center for Energy and Environment

June 15, 2009

Ideas for Possible CIP Program Elements

1) For large buildings, create or enhance comprehensive design assistance

2) Bonus incentive for SB2030 buildings (e.g. >$/kWh)3) Incentives for meeting whole building “prescriptive”

approach for small building (SB2030 Steering Committee will evaluate options further)

4) Incentives to offset increased design team fees for participating projects

5) Bonus incentives based on measured energy use6) Incentives for commissioning7) Incentives for operator training8) Partnerships between utilities

Center for Energy and Environment

June 15, 2009

Next Steps Related to CIP Programs

Research & development of small building program template

Work with utilities on new strategies and pilot programs

Submit supportive CIP plan comments

Cooperate with utilities on filings & modifica-tions for 2010 & beyond

How can our team help utilities?