Case Background
On August 11,
2015, the Commission issued an order approving Tampa Electric Company’s (TECO
or Utility) Demand-Side Management (DSM) Plan. The plan included the Utility’s Energy
Education, Awareness and Agency Outreach Program (Education Program), which had
an original start date of March 2010. The Education Program includes three
conservation initiatives: public energy education, energy awareness, and agency
outreach. The energy education and awareness initiatives are aimed toward
engaging groups of customers and students in discussions related to energy efficiency.
The agency outreach initiative allows for delivery of energy efficiency kits
that will help educate ratepayers on practices that help reduce energy
consumption. These kits contain the following: (1) four compact fluorescent
lamps; (2) two low-flow faucet aerators; (3) an air filter whistle to remind
residents to clean or change their filter monthly; (4) a hot water temperature
card to check the water heater’s temperature setting for opportunity for turn
down; (5) a wall plate thermometer to check the accuracy of their existing
thermostat setting; and (6) no-cost energy efficiency recommendations that can
be immediately adopted. In 2016, these kits produced an estimated annual energy
savings of 166,491 kilowatt-hours (kWh) at the generator and contributed towards
TECO’s conservation goals set by the Commission.
On January 10,
2017, TECO filed a petition to amend its Education Program to offer energy
education to select high school students on electric vehicles (EVs) including
ownership considerations, operation, and maintenance. The Utility proposed to
provide six EVs, three charger stations, and other supplemental supplies to
each participating high school as a part of the driver’s education program. The
estimated total cost for this amendment was approximately $1.8 million through
the year 2020.
On April 10,
2017, staff held an informal meeting with the Utility to discuss the proposed
amendment to its Education Program. During the meeting, staff expressed its
concerns that the proposed amendment was initially a load building program that
contained a relatively large amount of capital costs which are not normally associated
with an education program. In addition, the Utility provided additional
information regarding the proposed amendment and discussed a conservation Research
& Development (R&D) project to assert the benefits of EVs that is
currently in the works.
On April 19,
2017, the Utility filed a revised petition for its proposed amendment. This
revision substantially reduced the capital cost previously associated with the proposed
amendment to the Education Program. As a part of the revision, the Utility reduced
the number of EVs and charging stations to one at each school, and will only
fund the incremental costs to lease or purchase the EV for each school’s
driver’s education program. The estimated total cost of the revised amendment
to the Education Program is $439,800 through the year 2020. The Utility has
requested a decision by May 4, 2017, so that the amended program can be
implemented by the fall 2017 school year.
The Commission
has jurisdiction over this matter pursuant to Sections 366.80 through 366.83
and 403.519, Florida Statutes (F.S.), collectively known as the Florida Energy
Efficiency and Conservation Act (FEECA).
Discussion
of Issues
Issue 1:
Should the Commission approve TECO’s revised petition
to amend its Energy Education, Awareness and Agency Outreach Program?
Recommendation:
Yes. The proposed amendment to the Education Program
will educate future ratepayers regarding the impact of EVs on the electrical
system and the importance of reducing the total energy usage consumed while
owning an EV. The Program Participation Standards were submitted concurrently
with the program description. Staff has reviewed these standards and believes
that they are sufficient. Therefore, staff recommends that the costs associated
with the amended Education Program are eligible for cost recovery through the Energy
Conservation Cost Recovery (ECCR) clause.
While the amendment to the Education Program advances the
policy objectives of FEECA and its implementing rules, the provision of an EV
will initially increase overall energy consumption. The potential for future
energy savings resulting from the proposed amendment to the Education Program
is speculative and should be carefully considered before expansion of this
program or similar programs. (Thompson, Whitchurch)
Staff Analysis:
The criteria used by the Commission to review the
appropriateness of DSM programs are: (1) whether the program advances the
policy objectives of FEECA and its implementing rules; (2) whether the program
is directly monitorable and yields measurable results; and (3) whether the
program is cost-effective. However,
education programs are behavioral programs and, therefore, it may not be
possible for the program to pass the Commission’s cost-effectiveness tests due
to the difficulty of measuring the savings. Staff reviewed TECO’s revised
petition to amend its Education Program and associated Program Participation
Standards and recommends that the proposed amendment meets the criteria of an
education program.
Program
Description
TECO is proposing to amend its Education Program to offer
energy education on the operation, maintenance, and ownership considerations of
EVs to select high school students within its service territory. The Utility will
partner with a limited number of high schools’ driver’s education training
programs (one in the fall semester of 2017, expanding to a maximum of five through
2020). In its petition, TECO states that:
This new aspect of the company’s program will offer
students the opportunity to learn: the proper driving skills needed to maximize
energy efficient driving with EV; types, characteristics and operations of
different EV charging technologies; considerations of EV ownership which will
help reduce the anxiety of maintaining and operating an EV; about electric
rates and when charging the EV is the least expensive; and the importance of
reducing the total energy usage consumed while owning an EV.
TECO originally proposed to provide six EVs, three charger
stations, and other supplemental supplies to each participating high school as
a part of the driver’s education program. On April 19, 2017, the Utility filed
a revised petition that substantially reduced the capital cost previously
associated with the proposed amendment to the Education Program. As a part of
the revision, the Utility reduced the number of EVs and charging stations to
one at each school, and will only fund the incremental costs to lease or
purchase the EV for each school’s driver’s education program. The Utility seeks
to recover the incremental costs, above the cost of a traditional
gasoline-fueled vehicle, necessary to lease or purchase one EV and the total
cost to purchase and install one charging station. This revision substantially
reduced the cost of the amendment to the minimum level required to fully
implement the proposed amended Education Program. The Utility estimates that
the amended program will cost approximately $439,000 through the year 2020. The
Program Participation Standards were submitted concurrently with the program
description.
Program
Advancement of FEECA Objectives
The Utility states in paragraph 3 of its amended petition
that the amended program is:
. . . consistent with the Commission’s past practice
of focusing on energy education and making customers aware of energy efficient
technologies while expanding it to place emphasis on decreasing the energy
consumption from the resultant use of an EV as well as educating the driver
when to charge the EV to minimize any concurrent peak demand impacts to the
company.
Education programs seek to inform ratepayers about the
impact of electric consuming devices and appliances on the electric system,
their role as consumers of electricity, and behaviors or actions that could
help conserve energy or reduce peak demand. The Utility’s revised petition
addresses this by providing education associated with EVs and the associated
components discussed above. While staff has some concerns regarding the
potential load building role of EVs as discussed later in this recommendation,
providing general information regarding the impact of EVs on the electric system
and efficient use of appliances is consistent with the policy objectives of the
FEECA.
Program Cost
While the costs of implementing the revised proposed
amendments to the Education Program appear to include more capital items than other
educational programs, TECO’s revised petition seeks to minimize the capital
needed for implementation of its Education Program. As shown in Table 1-1
below, of the incremental costs of the amended program, 26.3 percent is
allocated to educational purposes. Capital projects and their maintenance make
up 57.5 percent of the proposed amended program’s incremental costs which
includes the lease of EVs, installation of chargers, and annual inspections.
Table 1-1
Amended Program Cost
Breakdown
|
|
2017
|
2018
|
2019
|
2020
|
Total
|
% of Grand Total
|
|
Electric Vehicles
|
$3,000
|
$18,000
|
$24,000
|
$24,000
|
$69,000
|
15.7%
|
|
Charger
|
$8,000
|
$32,000
|
$0
|
$0
|
$40,000
|
9.1%
|
|
Charger Installation
|
$27,000
|
$108,000
|
$0
|
$0
|
$135,000
|
30.7%
|
|
Charger Inspections
|
$0
|
$800
|
$4,000
|
$4,000
|
$8,800
|
2.0%
|
|
Program Manager
|
$10,000
|
$15,000
|
$15,000
|
$15,000
|
$55,000
|
12.5%
|
|
Materials
|
$8,000
|
$16,000
|
$16,000
|
$16,000
|
$56,000
|
12.7%
|
|
Program Curriculum
|
$60,000
|
$0
|
$0
|
$0
|
$60,000
|
13.6%
|
|
Advertising
|
$4,000
|
$4,000
|
$4,000
|
$4,000
|
$16,000
|
3.6%
|
|
Annual Total
|
$120,000
|
$193,800
|
$63,000
|
$63,000
|
|
|
|
Projected Grand Total
|
$439,800
|
100%
|
Source: Staff’s Analysis, TECO’s revised petition to amend
its Education Program.
At the April 10, 2017, informal meeting with staff, the
Utility stated that it expects approximately 350 program participants for the
first year and 1,750 program participants each year thereafter for a total of
5,600 drivers over three years. Given the projected $439,800 in total costs,
this equates to a cost of approximately $79 per participating student. By
comparison, the Utility’s projected 2016 costs for its existing Education
Program was $75,632,
which equates to approximately $99 per energy kit provided.
Also at the informal meeting with staff, the Utility
stated that it intends to pursue a partnership with an EV manufacturing
company, after the first year of the program, in hopes that the capital costs
of the EVs could be eliminated. Staff encourages the Utility to pursue these
partnerships in order to reduce ratepayer expenses while maintaining the amended
Education Program.
Staff agrees that educating ratepayers on energy efficient
technologies and energy conservation is important, but notes that the amendment
to the Education Program may result in load building and may increase overall
energy consumption. The potential for future energy savings resulting from the
proposed amendment is speculative and should be carefully considered before
expansion of this program or similar programs.
Program
Monitoring and Evaluation
In order to monitor the effectiveness of the proposed amended
program, TECO states, in response to Staff’s First Data Request, that it plans
regular collaboration with the schools, teachers and students during the amended
program. It also plans, as part of the curriculum, to conduct surveys of both
the teachers and students. As
the Utility does not expect annual energy consumption savings immediately with
the amended program, no verification of savings data would be necessary.
Cost-Effectiveness
Review
As stated above, there are no demand or energy savings
associated with the proposed amendment to the Education Program. As an
educational program, it may not be possible for the program to pass the Commission’s
cost-effectiveness tests due to the difficulty of measuring the results. The current
program passed the Total Resource Cost (TRC) and Participant Tests and complied
with the requirements to assist and educate low-income customers. The current program
failed the Rate Impact Measure (RIM) Test but includes minimal costs associated
with energy efficiency kits. Upon request, TECO provided a cost-effectiveness
analysis of the proposed amended program which showed a reduction in all three
cost-effectiveness tests but still maintained passing results for the TRC and
Participant Tests.
Conclusion
The proposed
amendment to the Education Program will educate future ratepayers regarding the
electrical system and the importance of reducing the total energy usage
consumed while owning an EV. Therefore, the proposed amendment advances the
policy objectives of FEECA and its implementing rules. Staff recommends that
the costs associated with the Education Program are eligible for cost recovery
through the ECCR clause. Staff has also reviewed the Program Participation
Standards and recommends that they are sufficient and should be approved as
well.
While the
amendment to the Education Program advances the policy objectives of FEECA and
its implementing rules, the provision of an EV will initially increase overall
energy consumption. The potential for future energy savings resulting from the
proposed amendment to the Education Program are speculative and should be
carefully considered before expansion of this program or similar programs.
Issue 2:
Should this docket be closed?
Recommendation:
Yes. If no person whose substantial interests are
affected by the proposed agency action files a protest within 21 days of the
issuance of the PAA Order, a Consummating Order should be issued and the docket
should be closed. (Murphy, Cuello)
Staff
Analysis:
Yes. If no person whose substantial interests are
affected by the proposed agency action files a protest within 21 days of the
issuance of the PAA Order, a Consummating Order should be issued and the docket
should be closed.
