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).
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, JEA filed
a petition requesting approval of its DSM Plan. As part of this filing, JEA
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.
On April 30, 2020, JEA filed an
amended petition for approval of its DSM Plan. The primary change was the
removal of the net metering programs for each customer class and the addition
of a commercial lightning program. This recommendation addresses the amended petition,
rather than the original February 24, 2020, petition.
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 JEA’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 JEA is projected to meet or exceed the
annual numeric conservation goals approved by the Commission in the 2019
Goalsetting Order. JEA’s 2020 DSM Plan is a continuation, with some
modifications, of its DSM Plan approved by the Commission in 2015 or voluntary
programs taken outside of its DSM Plan. JEA’s DSM Plan is not projected to be
cost-effective based upon the RIM Test. However, the Commission should allow JEA to continue programs
considering JEA’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. JEA’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 JEA 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 JEA’s DSM Plan, including its demand and energy savings,
cost-effectiveness, and rate impact. JEA’s DSM Plan meets or exceeds the goals
set in the 2019 Goalsetting Order.
Description of DSM Plan
JEA’s
DSM Plan consists of five programs in total, three residential and two
commercial. Each of the programs were previously offered through JEA’s 2015 DSM
Plan, except one, Commercial Prescriptive Lighting. The program was previously
offered voluntarily as a conservation program by JEA and did not count towards
achieving annual conservation goals. Several of these programs have been
modified to update values for participation and savings. Two noteworthy modifications
are: (1) the rebate for the residential solar water heating program is decreasing
from $800 to $400, which is the only program rebate being modified; and, (2) the
Neighborhood Energy Efficiency program is being expanded to include an
additional service whereby JEA provides blown-in attic insulation to bring the
home’s insulation value up to an R38-value at no cost to the owner, which
averages about 150 upgrades per year.
As required by Rule 25-17.003, F.A.C., JEA’s DSM Plan
continues to offer energy audits to residential customers, and JEA 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.
Table 1-1
JEA DSM Plan Program Listing
|
Program Name
|
Program Status
|
|
Existing
|
Modified
|
New
|
|
Residential Programs
|
|
Residential Energy Audits
|
X
|
|
|
|
Residential Solar Water
Heating
|
X
|
X
|
|
|
Neighborhood Efficiency
|
X
|
X
|
|
|
Commercial/Industrial Programs
|
|
Commercial Energy Audits
|
X
|
|
|
|
Commercial Prescriptive
Lightning
|
X
|
|
|
Source:
Document No. 02304-2020
Program Savings
Seasonal
peak demand and annual energy savings for the programs were reviewed. JEA
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., JEA will conduct inspections of at least 10 percent of
program installations to verify that installations were performed and meet
quality standards.
As part of
the 2014 Goalsetting Order, JEA’s goals were established by stipulation that
included JEA’s estimated savings from continuing its existing programs,
including behavioral savings for audits. While Staff does not recommend
behavioral savings be counted towards goals for the other FEECA Utilities,
consistent with the stipulation agreed to by the 2014 Goalsetting Order, JEA’s
audit behavioral savings should count towards its FEECA conservation
accomplishments.
Comparison of DSM Plan to Goals
Based on staff’s review, JEA’s DSM
Plan will meet or exceed the Commission’s established annual goals. The
seasonal demand and energy savings associated with JEA’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. JEA’s
DSM Plan
|
Year
|
Summer (MW)
|
Winter
(MW)
|
Annual Energy
(GWh)
|
|
Goal
|
DSM
Plan
|
Goal
|
DSM
Plan
|
Goal
|
DSM
Plan
|
|
2020
|
0.94
|
1.31
|
0.96
|
1.06
|
2.50
|
2.55
|
|
2021
|
0.94
|
1.31
|
0.96
|
1.06
|
2.50
|
2.55
|
|
2022
|
0.94
|
1.31
|
0.96
|
1.06
|
2.50
|
2.55
|
|
2023
|
0.94
|
1.31
|
0.96
|
1.06
|
2.50
|
2.55
|
|
2024
|
0.94
|
1.31
|
0.96
|
1.06
|
2.50
|
2.55
|
|
Total[4]
|
4.70
|
6.56
|
4.80
|
5.30
|
12.5
|
12.75
|
Source: Document No. 02304-2020
Table 1-3
Commission’s Commercial/Industrial Goals
vs. JEA’s DSM Plan
|
Year
|
Summer
(MW)
|
Winter
(MW)
|
Annual Energy
(GWh)
|
|
Goal
|
DSM
Plan
|
Goal
|
DSM
Plan
|
Goal
|
DSM
Plan
|
|
2020
|
0.140
|
0.180
|
0.007
|
0.093
|
0.08
|
0.093
|
|
2021
|
0.140
|
0.180
|
0.007
|
0.093
|
0.08
|
0.093
|
|
2022
|
0.140
|
0.180
|
0.007
|
0.093
|
0.08
|
0.093
|
|
2023
|
0.140
|
0.180
|
0.007
|
0.093
|
0.08
|
0.093
|
|
2024
|
0.140
|
0.180
|
0.007
|
0.093
|
0.08
|
0.093
|
|
Total[5]
|
0.700
|
0.900
|
0.035
|
0.465
|
0.04
|
0.465
|
Source: Document No. 02304-2020
The values
presented above are projections based upon participation rates which may or may
not occur. JEA will be responsible for monitoring actual participation rates.
JEA 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 JEA 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.
The Commission must also address JEA’s goal achievements if the Utility files a
determination of need for new generation pursuant to Section 403.519, F.S.
Based on
Table 1-2 and Table 1-3, JEA’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., JEA 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 JEA’s avoided costs and the results of the
cost-effectiveness analysis.
Avoided Costs
All avoided capacity additions
were modeled as a series of natural gas-fired simple cycle combustion turbines,
with projected in-service dates of 2036, 2038, 2040, and 2043. JEA’s avoided
units are consistent with the Utility’s filings in the 2019 Goalsetting
Proceeding in Docket No. 20190020-EG.
Cost-Effectiveness Test Results
The cost-effectiveness analysis of JEA’s demand-side programs shows that none
are cost-effective under the RIM and Participants Test combined, and only its commercial
programs are cost-effective under the TRC and Participants Tests combined. For
municipal utilities such as JEA, local decisions fall within the jurisdiction
of JEA’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
JEA Cost-Effectiveness Test Results by
Program
|
Program Name
|
RIM
Test
|
TRC
Test
|
Participants
Test*
|
|
Residential Programs
|
|
Residential Energy Audits
|
0.28
|
0.49
|
∞
|
|
Residential Solar Water
Heating
|
0.46
|
0.39
|
0.82
|
|
Neighborhood Efficiency
|
0.41
|
0.99
|
∞
|
|
Commercial Programs
|
|
Commercial Energy Audits
|
0.64
|
1.32
|
∞
|
|
Commercial Prescriptive
Lighting
|
0.69
|
1.69
|
2.91
|
* A Participants Test score may result in infinity
(∞) if there are no costs to participants.
Source: Document No. 02304-2020
Rate
Impact
The costs to
implement the programs within JEA’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
JEA Estimated Monthly Bill Impact of
Proposed DSM Plan
|
Year
|
Residential Customer
1,200 kWh/mo
|
|
Monthly Bill Impact ($)
|
|
2020
|
$0.05
|
|
2021
|
$0.08
|
|
2022
|
$0.10
|
|
2023
|
$0.13
|
|
2024
|
$0.15
|
Source: Document No. 02304-2020
Conclusion
The DSM Plan proposed by JEA is
projected to meet or exceed the annual numeric conservation goals approved by
the Commission in the 2019 Goalsetting Order. JEA’s 2020 DSM Plan is a
continuation, with some modifications, of its DSM Plan approved by the
Commission in 2015 or voluntary programs taken outside of its DSM Plan. JEA’s
DSM Plan is not projected to be cost-effective based upon the RIM Test.
However, the Commission
should allow JEA to continue programs considering JEA’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. JEA’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 JEA
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.
