Case Background
Enacted
in 1980, Sections 366.80 through 366.83, and 403.519, Florida Statutes (F.S.),
known collectively as the Florida Energy Efficiency and Conservation Act
(FEECA), requires the Florida Public Service Commission (Commission or PSC) to
adopt conservation goals to increase the efficiency of energy consumption.
Additionally, FEECA emphasizes reducing the growth rates of weather-sensitive
peak demand, reducing and controlling the growth rates of electricity
consumption, reducing the consumption of expensive resources such as petroleum
fuels, and encouraging demand-side renewable energy resources. The Commission
most recently
established
conservation goals by Order No. PSC-2019-0509-FOF-EG, issued November 26, 2019
(2019 Goalsetting Order).[1] The
Commission found that it was in the public interest to continue with the goals
established in the prior FEECA goalsetting proceeding for the period 2015
through 2024, which were established by Order No. PSC-14-0696-FOF-EU (2014
Goalsetting Order).[2]
Pursuant to Section 366.82(7),
F.S., after goals are established, the Commission must require each utility to
develop Demand-Side Management (DSM) Plans to meet the conservation goals. Rule
25-17.0021(4), Florida Administrative Code (F.A.C.), requires that DSM Plans be
filed within 90 days of the order establishing goals. Therefore, new DSM Plans
were required to be filed by February 24, 2020.
On February 24, 2020, Orlando
Utilities Commission (OUC) filed a petition requesting approval of its DSM Plan.
As part of this filing, OUC provided a cost-effectiveness analysis of the
proposed programs pursuant to Rule 25-17.008, F.A.C. These include the Rate
Impact Measure (RIM) Test, the Total Resource Cost (TRC) Test, and the
Participants Test.
The Commission has jurisdiction over this matter pursuant
to Sections 366.80 through 366.83 and 403.519, F.S.
Discussion
of Issues
Issue 1:
Is OUC’s DSM Plan projected to meet the annual
numeric conservation goals established by the Commission in the 2019
Goalsetting Order?
Recommendation:
Yes.
The DSM Plan proposed by OUC is projected to meet or exceed the annual numeric
conservation goals approved by the Commission in the 2019 Goalsetting Order.
OUC’s 2020 DSM Plan is a continuation, with some modifications and additions,
of its DSM plan approved by the Commission in 2015. OUC’s DSM Plan is not
projected to be cost-effective based upon the RIM Test. However, the Commission should allow OUC to
continue programs considering OUC’s status as a municipal utility, where the
local governing body is given the latitude to make decisions regarding local
community investment in energy efficiency. OUC’s local governing body will make
its own determination as to whether expenditures are reasonable and prudent and
will decide if it is necessary to modify and or remove programs.
Staff also recommends that OUC file its administrative
program standards for all programs within 30 days of the Consummating Order
being issued in this docket. Staff further recommends that the Commission grant
staff administrative authority to review and approve these standards.
(Phillips)
Staff Analysis:
The
criteria used to review the appropriateness of the conservation programs were
as follows: (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.[3]
Staff has reviewed OUC’s DSM Plan, including its demand and energy savings,
cost-effectiveness, and rate impact. OUC’s DSM Plan meets or exceeds the goals
set in the 2019 Goalsetting Order.
Description of DSM Plan
OUC’s DSM
Plan consists of 16 programs in total, eight residential and eight commercial.
OUC has proposed to cancel two existing programs, continue two existing
programs as is, continue ten existing programs with modifications to reflect
current market conditions, and add four new programs. As required by Rule
25-17.003, F.A.C., OUC’s DSM Plan continues to offer energy audits to
residential customers, and OUC also continues to voluntarily offer audits to
commercial/industrial customers. Table 1-1 provides a complete list of the
programs and a brief description of each can be found in Attachment A.
OUC proposes
to end the residential and commercial Window Film/Solar Screen Rebate Program.
In this program, OUC provided rebates for the installation of solar window
films in pre-existing homes and businesses. The solar window film reduces solar
heating resulting in less energy needed to cool the home or business.
The primary change made to the modified programs was
alterations to the rebate levels available within the program. For example, OUC
reduced the residential and commercial duct repair program rebate from a
maximum of $160 to a maximum of $100. While the residential and commercial
ceiling insulation program increased the available rebate from $0.05 per square
foot of attic insulation, to $0.10 per square foot of attic insulation.
Table
1-1
OUC DSM Plan Program Listing
|
Program Name
|
Program Status
|
|
Existing
|
Modified
|
New
|
|
Residential Programs
|
|
Home Energy Survey
|
X
|
|
|
|
Duct Repair/Replacement
|
X
|
X
|
|
|
Ceiling Insulation Upgrade
|
X
|
X
|
|
|
High Performance Windows
|
X
|
X
|
|
|
Efficient Electric Heat
Pump
|
X
|
X
|
|
|
New Home Rebate
|
X
|
X
|
|
|
Water Heater Heat Pump
|
|
|
X
|
|
Efficiency Delivered
|
X
|
X
|
|
|
Commercial/Industrial Programs
|
|
Energy Audits
|
X
|
|
|
|
Efficient Electric Heat
Pump
|
X
|
X
|
|
|
Duct Repair Rebate
|
X
|
X
|
|
|
Ceiling Insulation Rebates
|
X
|
X
|
|
|
Cool/Reflective Roof
|
X
|
X
|
|
|
Indoor Lighting Billed
Solution
|
|
|
X
|
|
Indoor lighting Rebate
|
|
|
X
|
|
Custom Incentive
|
|
|
X
|
Source: Document No. 01070-2020
Program Savings
Seasonal
peak demand and annual energy savings for the programs were reviewed. OUC
estimates and measures savings by a program using a combination of
methodologies, including site-specific engineering estimates as the most
cost-effective method of evaluating program impacts. As required by Rule
25-17.003(10), F.A.C., OUC will conduct inspections of at least 10 percent of
program installations to verify that installations were performed and meet
quality standards.
Comparison
of DSM Plan to Goals
Based on staff’s review, OUC’s DSM
Plan will meet or exceed the Commission’s established annual goals. The
seasonal demand and energy savings associated with OUC’s DSM Plan and the
Commission’s established goals are summarized in Table 1-2 and Table 1-3 for residential
and commercial/industrial sectors, respectively.
Table 1-2
Commission’s Residential Goals vs. OUC’s
DSM Plan
|
Year
|
Summer (MW)
|
Winter
(MW)
|
Annual Energy
(GWh)
|
|
Goal
|
DSM
Plan
|
Goal
|
DSM
Plan
|
Goal
|
DSM
Plan
|
|
2020
|
0.21
|
0.61
|
0.21
|
0.68
|
0.77
|
1.20
|
|
2021
|
0.21
|
0.61
|
0.22
|
0.69
|
0.80
|
1.20
|
|
2022
|
0.19
|
0.61
|
0.20
|
0.69
|
0.72
|
1.20
|
|
2023
|
0.19
|
0.61
|
0.18
|
0.69
|
0.66
|
1.20
|
|
2024
|
0.16
|
0.61
|
0.16
|
0.70
|
0.57
|
1.21
|
|
Total[4]
|
0.96
|
3.04
|
0.97
|
3.45
|
3.52
|
6.01
|
Source: Document No. 01070-2020
Table 1-3
Commission’s Commercial/Industrial Goals
vs. OUC’s DSM Plan
|
Year
|
Summer
(MW)
|
Winter
(MW)
|
Annual Energy
(GWh)
|
|
Goal
|
DSM
Plan
|
Goal
|
DSM
Plan
|
Goal
|
DSM
Plan
|
|
2020
|
0.39
|
1.50
|
0.70
|
1.40
|
0.85
|
7.68
|
|
2021
|
0.40
|
1.50
|
0.78
|
1.40
|
0.86
|
7.68
|
|
2022
|
0.37
|
1.47
|
0.78
|
1.37
|
0.85
|
7.50
|
|
2023
|
0.39
|
1.44
|
0.74
|
1.34
|
0.82
|
7.40
|
|
2024
|
0.36
|
1.31
|
0.70
|
1.20
|
0.80
|
6.62
|
|
Total[5]
|
1.91
|
7.24
|
3.70
|
6.72
|
4.18
|
63.88
|
Source: Document No. 01070-2020
The values
presented above are projections based upon participation rates which may or may
not occur. OUC will be responsible for monitoring actual participation rates.
OUC is a municipal utility and its local governing body will decide if it is
necessary to modify, add, or remove programs.
Section
366.82(10), F.S., requires the Commission to provide an annual report to the
Governor and Legislature on the progress of each utility toward meeting the
established goals. Rule 25-17.0021(5), F.A.C., requires OUC to submit an annual
report no later than March 1 of each year summarizing the achieved results of
its DSM Plan. Staff will continue to monitor and report the actual amount of
DSM savings each year, on an annual and cumulative basis, as part of the FEECA
Report.
Based on
Table 1-2 and Table 1-3, OUC’s 2020 DSM plan is projected to exceed the
established FEECA policy goals set by the Commission. The programs are all
monitorable and the results are measurable.
Cost-Effectiveness Review
As required by Rule 25-17.008, F.A.C., OUC provided a cost-effectiveness
analysis of the proposed programs using the RIM Test, the TRC Test and the
Participants Test. The Commission’s last established goals were not based upon
any particular cost-effectiveness test. Rather, the Commission found that it
was in the public interest to continue with the goals established in the prior
FEECA goalsetting proceeding for the period 2015 through 2024, which were based
on an economic analysis conducted in 2015. Below, staff addresses the
assumptions associated with OUC’s avoided costs and the results of the
cost-effectiveness analysis.
Avoided
Costs
OUC does not
plan any additions to its generation fleet within the study period for its DSM
Plan. In addition, its avoided costs do not include capacity benefits
associated with deferring or delaying its next generating unit. OUC’s avoided
costs are therefore based on avoided energy only.
Cost-Effectiveness
Test Results
The cost-effectiveness analysis of OUC’s
demand-side programs shows that none are cost-effective under the RIM and
Participants Tests, and only one, the custom incentive program, is cost
effective under both the TRC and Participants Tests. For municipal utilities
such as OUC, local decisions fall within the jurisdiction of OUC’s governing
body regarding the investment in energy efficiency that best suits local needs
and values. Accordingly, as the Commission has recognized in prior proceedings,
it is appropriate to defer to municipal utilities’ governing bodies to
determine the level of investment if measures are not cost-effective.[6]
Table 1-4
OUC Cost-Effectiveness Test Results by
Program
|
Program Name
|
RIM Test
|
TRC Test
|
Participants Test
|
|
Residential Programs
|
|
Duct Repair/Replacement
|
0.20
|
2.14
|
0.32
|
|
Ceiling Insulation Upgrade
|
0.18
|
0.46
|
0.10
|
|
High Performance Windows
|
0.13
|
0.62
|
0.09
|
|
Efficient Electric Heat
Pump Seer
|
0.15 - 0.18
|
0.28 - 0.47
|
0.05 - 0.10
|
|
New Home Rebates
|
0.19
|
0.33
|
0.08
|
|
Heat Pump Water Heater
Rebates
|
0.20
|
0.62
|
0.14
|
|
Residential Efficiency
Delivered
|
0.14
|
1.29
|
0.17
|
|
Commercial Programs
|
|
Efficient Electric Heat
Pump Seer 15
|
0.23 - 0.26
|
0.29 - 0.48
|
0.07 - 0.12
|
|
Duct Repair rebates
|
0.29
|
1.10
|
0.32
|
|
Ceiling Insulation Upgrade
rebates
|
0.25
|
0.48
|
0.12
|
|
Cool/Reflective Roof
Rebates
|
0.52
|
0.69
|
0.37
|
|
Indoor Lighting Billed
Solution
|
0.43
|
1.86
|
0.77
|
|
Indoor Lighting Rebates
|
0.51
|
1.55
|
0.76
|
|
Custom Incentive
|
0.39
|
3.67
|
1.28
|
Source: Document No. 01070-2020
Rate Impact
The costs to
implement the programs within OUC’s DSM Plan would be established by the
municipal utility’s governing body. Overall, the DSM programs are a small
amount of the customer’s bill. Table 1-5 below is an estimate of the monthly
bill impact on the typical residential and commercial customer over a five-year
period. The estimated costs are based upon participation rates and
administrative costs used in the cost-effectiveness analysis. Much like
investments in generation, transmission, and distribution, investments in
energy efficiency have an immediate rate impact, but may produce savings over
time.
Table 1-5
OUC Estimated Monthly Bill Impact of
Proposed DSM Plan
|
Year
|
Residential Customer
1,200 kWh/mo
|
|
Monthly Bill Impact ($)
|
|
2020
|
0.43
|
|
2021
|
0.44
|
|
2022
|
0.44
|
|
2023
|
0.44
|
|
2024
|
0.44
|
Source:
Document No. 01936-2020
Conclusion
The DSM Plan proposed by OUC is
projected to meet or exceed the annual numeric conservation goals approved by
the Commission in the 2019 Goalsetting Order. OUC’s 2020 DSM Plan is a
continuation, with some modifications and additions, of its DSM plan approved
by the Commission in 2015. OUC’s DSM Plan is not projected to be cost-effective
based upon the RIM Test. However, the Commission should allow OUC to continue programs considering OUC’s
status as a municipal utility, where the local governing body is given the
latitude to make decisions regarding local community investment in energy
efficiency. OUC’s local governing body will make its own determination as to whether
expenditures are reasonable and prudent and will decide if it is necessary to
modify and or remove programs.
Staff also recommends that OUC
file its administrative program standards for all programs within 30 days of
the Consummating Order being issued in this docket. Staff further recommends
that the Commission grant staff administrative authority to review and approve
these standards.
Issue 2:
Should this docket be closed?
Recommendation:
No. 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. If the Commission approves any programs, the programs should
become effective on the date of the Consummating Order. However, if a protest
is filed within 21 days of the issuance of the PAA Order, the programs should
not be implemented until after the resolution of the protest. In either event,
the docket should remain open for staff’s verification that the program
standards have been filed by the utility and approved by staff. When the PAA
issues become final and the program standards have been approved, this docket
should be closed administratively. (Passidomo, Murphy)
Staff Analysis:
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. If the Commission approves any programs, the programs should
become effective on the date of the Consummating Order. However, if a protest
is filed within 21 days of the issuance of the PAA Order, the programs should
not be implemented until after the resolution of the protest. In either event,
the docket should remain open for staff’s verification that the program
standards have been filed by the utility and approved by staff. When the PAA
issues become final and the program standards have been approved, this docket
should be closed administratively.
OUC 2020 DSM Plan
Residential Programs
Home
Energy Survey Program
The home
energy walk-through surveys were designed to provide residential customers with
recommended energy efficiency measures and practices customers can implement,
and to encourage participation in various OUC rebate programs. OUC provides
participating customers specific tips on conserving electricity and water as
well as details on customer rebate programs.
Duct
Repair Rebates Program
The program
is designed to encourage residential customers to repair leaking ducts on
existing systems. Qualifying customers must have an existing central air
conditioning system, within certain limits and ducts must be sealed with mastic
and fabric tape or any other Underwriters Laboratory (UL) approved duct tape.
Maximum
Incentive: Up to $100
Ceiling
Insulation Rebates Program
The program
is designed to encourage customers to upgrade their attic insulation. The
program applies to conditioned areas only.
Maximum
Incentive: Up to $0.10/sq.-ft.
High
Performance Windows Rebates Program
The program
is designed to encourage customers to install windows that improve energy
efficiency in their homes by purchasing ENERGY STAR® rated energy efficient
windows.
Maximum
Incentive: $1.50/sq.-ft.
Efficient
Electric Heat Pump Rebates Program
The
residential program provides rebates to qualifying customers in existing homes
who install heat pumps having a seasonal energy efficiency ratio (SEER) of 15.0
or higher.
Maximum
Incentive: Up to $1,630
New
Home Rebates Program
Previously
known as the Residential Gold Ring Home Program, the program offers “a la
carte” rebates for a variety of items the builder or home buyer may choose. The
table below is an example of the incentives available.
|
Rebate
|
Rate of Rebate
|
Maximum Rebate
|
|
Ceiling
Insulation Upgrade
|
$0.03/sq.-ft.
|
$60
|
|
Heat
Pump
|
Up to $1,630
|
$500
|
|
Energy
Star Heat Pump Water Heater
|
$500
|
$500
|
|
Solar Water Heater
|
$900
|
$900
|
Heat
Pump Water Heater Rebates Program
The program
provides rebates for the heat pumps commonly known as hybrid electric heat pump
water heaters for qualifying installations.
Maximum
Incentive: $500
Residential
Efficiency Delivered Program
Formerly
known as the Home Energy Fix-Up, the program is available to residential
customers (single family homes) and provides up rebates for energy and water
efficiency upgrades based on the needs of the customer’s home after a
residential energy survey. The program is an income based program. The
participant’s income is also the basis for determining what maximum incentive
and percentage of costs OUC will contribute toward the improvements.
Specifically, OUC will contribute 85 percent, up to $2,000 for households with incomes
less than $40,000, and 50 percent, up to $1,000 for households with incomes up
to $60,000.
Maximum
Incentive: Up to $2,000
Commercial Programs
Energy
Audits Program
The program
is focused on increasing the energy efficiency of commercial buildings and
includes a free survey comprised of a physical walk-through inspection of the
commercial facility. Following the inspection the customer receives a written
report detailing cost-effective recommendations to make the facility more
energy and water efficient. Participating customers are encouraged to
participate in other OUC commercial programs and directly benefit from energy
conservation, which decreases their electric and water bills
Efficient
Electric Heat Pump Rebates Program
The program
provides rebates to qualifying customers in existing buildings who install heat
pumps having a SEER of 15.0 or higher.
Maximum
Incentive: Up to $1,630
Duct
Repair Rebates Program
The program
is designed to encourage commercial customers to repair leaking ducts on
existing systems. Qualifying customers must have an existing central air
conditioning system of within certain limits and ducts must be sealed with
mastic and fabric tape or any other UL approved duct tape.
Maximum
Incentive: Up to $100
Ceiling
Insulation Rebates Program
The program
is designed to increase a building’s resistance to heat loss and gain.
Participating customers receive a rebate for upgrading their attic insulation
up to R-30 or greater.
Maximum
Incentive: $0.10/sq.-ft.
Cool/Reflective
Roof Rebates Program
The program
is designed to reflect the sun’s rays and lower roof surface temperature while
increasing the lifespan of the roof. OUC will rebate customers for ENERGY STAR®
cool/reflective roofing that has an initial solar reflectance greater than or
equal to 0.70.
Maximum
Incentive: $0.12/sq.-ft.
Indoor
Lighting Billed Solution Program
The program
assists commercial customers with investments in new lighting technologies. Through
a competitive Request For Proposals process, OUC selects a qualified lighting
contractor to work with customers to develop proposals. Customers enter into an
Agreement with OUC to payback the cost of the project based on the expected
savings through monthly charges applied to their bill. The program is a cash-flow neutral billed
solution where the savings pay for the project’s cost over the pay-back period
or term. The term cannot exceed five
years.
Indoor
Lighting Rebates Program
The program
offers commercial customers that upgrade the efficiency of their indoor
lighting a rebate if they meet certain requirements. Participation is open to
facilities located within OUC’s service area that receive electric service
under an OUC commercial rate.
Maximum
Incentive; Up to $250/kW
Custom
Incentive Program
Through the
program, commercial customers receive incentives based on the reduction in peak
demand their projects achieve plus the first year energy savings. Incentives
and other program must meet program requirements and caps; including incentives
cannot exceed 50 percent of project costs and the project must have a greater
than a two-year payback. Incentives are split between project completion and
one year after project completion.
Maximum Incentive: Up to $550/kW ($250/kW for lighting)
and $0.032/kWh.
