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Anne Arquit Niederberger3/6/17 12:00 AM3 min read

Energy Efficiency Best Practices for NY

In its January 21, 2016 Order Authorizing the Clean Energy Fund Framework in Case 14-M-0094 (CEF Order), the Public Service Commission (Commission) directed the Clean Energy Advisory Council (CEAC) to develop a REV Energy Efficiency Best Practices Guide outlining energy efficiency program best practices under a REV (Reinventing the Energy Vision) framework.

This task was delegated to the 19-Member REV Energy Efficiency Best Practices Working Group, which included representatives from utilities, distributed energy resource providers, non-profits, and government entities. The Working Group issued its final report, “REV Energy Efficiency Best Practices Guide”, on February 22, 2017 — and the top five are presented below.

Beyond the bureaucratic details, what this means is that New York’s leadership is committed to shaking up the status quo.

Transitioning away from multi-year efficiency programs funded by ratepayer surcharges allocated by the Commission, REV is paving the way for market actors to experiment with innovative services and business models to ramp up energy efficiency investments.

Over the course of nine months, our Working Group researched energy efficiency programs across New York State program administrators, as well as programs from outside the State. We compiled an initial list of 49 best practice candidates, which included promising high-impact activities, innovative program and policy strategies, as well as pilots or demonstrations of REV-like approaches. We then assessed this draft list against high-level REV objectives:

  • Customer engagement with DER markets;
  • Ability to stimulate DER providers;
  • Potential for greater private sector investment;
  • Potential to deliver system benefits;
  • Potential to support new utility earnings opportunities;
  • Carbon reduction.

The initial list was whittled down to a short list of 19 best practice candidates, and a survey sent to Working Group members, utilities and program administrators was then used to select the final set of five best practices.

We faced challenges in identifying specific, actionable and importable “off the shelf” REV opportunities outside of the State, because New York — through the Clean Energy Fund and REV demos — is leading the way with market based approaches to delivering energy efficiency. And it’s still early days to try to evaluate the impact and performance of these new initiatives through a REV lens.

Despite these challenges, we managed to cull out five top-ranking policies, programs and practices to advance NY REV objectives:

  • Use data driven market segmentation to create customized offerings for customers;
  • Conduct utility specific assessments of both the long-term economic and achievable energy efficiency potential;
  • Build programs, policies, and market structures to reward a combination of energy efficiency and demand management;
  • Tie energy efficiency/demand management incentives to savings outcomes through a pay-for-performance (P4P) approach;
  • Create a one-stop-shop and bundled services/measures approach to energy efficiency.

Scattered among the descriptions of these best practices were several mentions of Con Edison’s Marketplace (proudly powered by Enervee), a key component of the utility’s Connected Homes REV demonstration project.

On data-driven market segmentation and targeted offerings for customers:

…the marketplace REV demos currently underway throughout the State, such as Con Edison’s Connected Homes demo and Avangrid’s Community Energy Coordination demo, rely heavily on segmentation and targeting to engage customers.

On creating a one-stop-shop:

A third example, which targets plug loads and individuals, rather than building retrofits and commercial and multi-family building owners, are utility-branded marketplaces that serve as virtual customer engagement platforms. ConEd’s REV Connected Homes demo is one example, but such marketplaces have been deployed elsewhere in the USA and in deregulated markets, such as the UK and FR. These platforms offer core infrastructure to help utilities maintain an ongoing relationship with their customers and enable them to provide customers with the full range of DER offers, targeted to their individual needs.

The Working Group called for the NY Public Service Commission to enable implementation of best practices in the Guide and utilize the Guide when evaluating portfolios and program proposals from Program Administrators.

The Working Group also noted that adoption of long-term, statewide energy savings targets and establishing energy efficiency as a resource and requiring that utility programs realize all available cost-effective energy efficiency have been successful in driving greater levels of energy efficiency in California, Rhode Island, Massachusetts, Connecticut, Maine, Vermont, and Washington — and are critically important considerations under REV.