A number of factors are leading to more regular discussion among policymakers as to how energy efficiency can be integrated into multiple policy objectives, including system planning.
NEEP has this past quarter been actively following and participating in various events to advocate for the inclusion of energy efficiency into system planning in New England. For example, at the Annual New England Conference of Public Utility Commissioners (NECPUC) Symposium (May 23-26), NEEP arranged for Tom Eckman, manager of conservation services at the Northwest Power and Conservation Council (NWPCC), to speak about the NWPCC experience of effectively integrating energy efficiency into the system planning process, and the impact of energy efficiency in helping the region meet its resource adequacy needs. Eckman spoke as part of a panel on Regional State Committees (RSC) where he compared the role of an RSC to that of the NWPCC (to download his presentation, click here). In a separate panel on the topic of "Interrelationship of Natural Gas and Electric Generation," Bill Prindle, deputy director of the American Council for an Energy Efficient Economy (ACEEE) discussed the value of gas efficiency in helping reduce the demand for natural gas in New England for both end-use purposes as well as electric generation (download his presentation by clicking here).
Following the NECPUC Symposium, NEEP hosted a meeting on Integrating Energy Efficiency into System Planning, where Eckman discussed the same topic with a group of key stakeholders from throughout New England. With generous assistance from the Massachusetts Technology Collaborative (MTC), the meeting featured representatives from the MTC, National Grid, NSTAR, Northeast Utilities, United Illuminating, several energy service companies, the New England Governors' Conference, Conservation Law Foundation, Regulatory Assistance Project, and Northeast States for Coordinated Air Use Management (NESCAUM), who heard Eckman share the Northwest's experiences with integrating energy efficiency into system planning, including the creation of a Regional Technical Forum that has served as a venue for establishing, among other things, regional monitoring and verification protocols for reporting energy efficiency program savings for system planning purposes, and how energy efficiency is increasingly being used as a hedging strategy to reduce risks associated volatile electricity prices (see his presentation by clicking here). In addition, Paul Peterson of Synapse Energy Economics, gave the local perspective in his presentation on Where Does Energy Efficiency Fit into the Planning Process at ISO-New England? Peterson focused on how ISO-NE (now known as a Regional Transmission Organization, or RTO) currently integrates energy efficiency into its Regional Transmission Expansion Planning (RTEP) process as well as in its energy and capacity forecasts. He also discussed future developments that can serve as venues for better integrating energy efficiency into system planning, including the future role of a Regional State Committee, and changes to Demand Response programs (his presentation is available by clicking here).
More recently, Susan Coakley, NEEP's executive director, spoke at the Massachusetts Restructuring Roundtable on the topic of Regional State Committees - now being referred to as the New England States Committee on Electricity (NESCOE). The June 18 Roundtable began with a presentation by David O'Connor, commissioner of the Massachusetts Division of Energy Resources, who provided an overview of the NESCOE proposal that is about to be filed with the Federal Energy Regulatory Commission (FERC). The NESCOE proposal, developed by energy and environmental regulators in New England (as directed by the state governors) proposes to create a regional state committee whose role would be address several key policies related to the system, including the amount and type of generation a region wants to maintain to preserve a reliable electric system (resource adequacy) and the manner in which improvements to the transmission system are considered and funded (known as system planning and expansion). Other policy goals on which the committee may advise the system operator could include security, fuel diversity, conservation and environmental impacts of power generation, according to O'Connor. The NESCOE would be a non-profit corporation with full-time staff, and would be funded by a regional tariff collected by RTO-NE from transmission providers, who would recover these costs from all New England electricity customers. NEEP and other efficiency advocates are hoping that the creation of this NESCOE will serve as a key opportunity to better integrate energy efficiency (and other demand side and clean energy resources) into the regional planning process. To view the speakers' presentations from the Restructuring Roundtable, go to http://www.raabassociates.org/main/roundtable.asp?sel=56.
Another important development this past quarter in New England is that energy efficiency was selected by ISO-NE to meet a small part of the Southwest Connecticut emergency demand response need. Among the proposals selected by ISO-NE was one submitted by Conservation Services Group and NXEGEN which will help meet up to 2 percent of emergency demand needs over a five-year period in the Southwest Connecticut region, acknowledged by FERC to be among the most congested electric transmission and distribution areas in the nation. For more information, see a summary of the RFP results at http://www.iso-ne.com/committees/demand_response_wg/DRWG_Meeting_Material_05-05-2004/DRWG%20RFP%20Intro%2005-05-2004.ppt and a press release issued by CSG at http://www.csgrp.com/corporate/news/releases.html titled "For First Time, Energy Efficiency Contract Awarded to Help Reduce Energy Use."
Finally, NEEP has been an active participant in discussions of the New England Power Pool (NEPOOL) Governance Committee Working Group regarding the creation of a new sixth voting sector for Alternative Energy Resources that will be market participants in the revamped RTO governance process. Following FERC's RTO order in March, ISO-NE deferred to NEPOOL the determinations for determining the criteria for composition of the new sixth voting sector. Beginning in April, the NEPOOL Governance Committee tapped Paul Peterson of Synapse Energy Economics (representing the Union of Concerned Scientists and others in NEPOOL governance) was tapped to chair a "caucus" of those interested in the new sector. A group of stakeholders have met and/or conferenced over the past few months to discuss the creation of this sector, and a draft proposal is in circulation for discussion. While a filing on the new sector was due to FERC by June 22, an extension has been sought following very complicated discussions concerning, among other things, criteria for qualification, expense share and voting share. Key to these discussions has been a contention of whether FERC intended for the new sector to be populated by as broad and inclusive a group of alternative resource providers - demand response, load response, energy efficiency, renewable energy and distributed generation resources and providers - without barrier to entry, or if only larger, established market forces should be included.
For more information on the role of energy efficiency in system planning, contact Jim O'Reilly (joreilly@neep.org) or Julie Michals (jmichals@neep.org) of NEEP.
