Procurement strategies involve approaches to capturing more energy efficiency by requiring that distribution utilities obtain a mandated amount of energy efficiency in their distribution portfolio. There are various procurement policies that can be implemented. Least cost procurement policies, for example, require that a distribution company obtain ALL cost effective energy efficiency up to the electric supply cost. Another procurement policy is an energy efficiency portfolio standard. This approach sets a minimum percentage of energy efficiency that must be obtained by utilities in their energy portfolio before they utilized standard electricity. Because least cost procurement ensures that all cost effective energy efficiency will be obtained, allowing states to reach their achievable energy efficiency potential, it is the preferred policy. This section contains:
Background Information and Reports
Environmental Protection Agency Clean Energy Action Plan Resources
Energy Efficiency Resource Standards: Experience and Recommendations ACEEE- February 2006
In this report, ACEEE recommends that states implement EEPS that include both electric and natural gas utilities. They also suggest that states begin at a modest procurement percentage and gradually ramp up the program until the state achieves its desired EEPS goal.
Ohio Integrated Portfolio Management in a Restructured Supply Market Resource Insight, Inc, and Synapse Energy Economics, Inc Report to the Office of the Ohio Consumers’ Counsel- June 2006
This report was done for the Ohio Consumers’ Counsel in order to identify how the state may minimize cost and risk to ratepayers as well as create a competitive electric market in a restructured power market. Resource Insight and Synapse point to portfolio standards as being an effective tool for ensuring that the utilities are advancing environmental protection, grid reliability, and price stability.
Best Practices in Procurement of Default Electric Service: A Portfolio Management Approach Amy Roschelle and William Steinhurst. October 2004.
This article uses the examples of Massachusetts, Connecticut, Washington, D.C., and New Jersey to discuss the relationship between portfolio management strategies and default electric service procurement.
Portfolio Management: How to Procure Electricity Resources to Provide Reliable, Low-Cost, and Efficient Electricity Services to All Retail Customers.
Prepared by Synapse Energy Economics for The Regulatory Assistance Project and The Energy Foundation- October 2003
This report supplies a thorough background on portfolio standards, their benefits, and how a state can go about development and implementation.
Portfolio Management: Looking After the Interests of Ordinary Customers in an Electric Market That Isn't Working Very Well. The Regulatory Assistance Project (RAP)- July 2002
In this report, RAP identifies the implementation of portfolio management as necessary for reducing market power in a deregulated state. They state its ability to do so by creating a market that relies more on long- and medium- term contracts rather than short-term. They state that “the use of portfolio management may be the greatest leverage state regulators have to influence the actual operations of wholesale markets.”
State Procurement Legislation and Regulations
Connecticut
"An Act Concerning Electricity and Energy Efficiency" (Jan 2007)
Class III Portfolio Standard (June 2006)
Maine
Public Law Chapter 677 Section C (2006)
Massachusetts
Green Communities Act 4373
New York
Public Service Commission Policy Statement on Portfolio Management (August 2004)
EEPS Proceeding- Docket 07-M-0548
Rhode Island
“The Comprehensive Energy Conservation, Efficiency and Affordability Act of 2006” (Jan 2006)
Vermont
Public Service Board Order Re: Energy Efficiency Utility Budget for 2006, 2007, 2008 (August 2006)
Act 61, "An Act Relating to Renewable Energy, Efficiency, Transmission and Vermont's Energy Future"
