"Treat Energy Efficiency Right!"

Nov 18, 2013, 08:00 ET from National Home Performance Council

New study on cost-effectiveness screening released by NHPC during NARUC Annual Meeting calls for treating and testing energy efficiency as a resource.

ORLANDO, Fla., Nov. 18, 2013 /PRNewswire-USNewswire/ -- At a national meeting of utility commissioners, the National Home Performance Council today released a groundbreaking proposal designed to ensure appropriate levels of public investment in energy efficiency programs. At present, many utility commissions make decisions about energy efficiency investments on the basis of cost-effectiveness screening methods that systematically ignore major program benefits. As a result, many states significantly underinvest in energy efficiency programs that could result in significant consumer bill savings as well as many other benefits.

The new proposal, advanced by NHPC and the new Energy Efficiency Screening Coalition, introduces a "Resource Value Framework" that provides guidance to commissions for conducting transparent, accurate tests that take energy-related public policy goals into consideration. 

"It is time to value energy efficiency – our cleanest, cheapest energy resource – correctly," said Kara Saul-Rinaldi, executive director of the National Home Performance Council who published the report.  "Tests that screen energy efficiency programs by accounting for all the costs but missing many of the program benefits provide inaccurate information to policymakers.  These tests need a thorough review by Public Utility Commissions and any administrators that use them."

The study makes a number of recommendations to ensure that states do not underinvest in energy efficiency, including:  

  • Provide sufficient information to determine whether proposed energy efficiency programs are in the public interest;
  • Explicitly account for the energy policy goals of the state, as articulated in legislation, commission orders, regulations, guidelines and other policy directives;
  • Explicitly account for all the relevant benefits associated with the screening test used in that state.  For example, a state that chooses to include participant costs in its screening test must also include participant non-energy benefits;
  • Not exclude relevant benefits because they are difficult to quantify and monetize; and
  • Provide a transparent framework for presenting the methodology, assumptions, inputs and outputs.

"Poorly designed or implemented screening tests are a barrier to full implementation of energy programs that can provide real energy savings to the American people," said Steve Cowell, CEO of Conservations Services Group and an NHPC Board Member.  "We need to reform the process that is getting in the way of good public policy.  By using the framework outlined in the paper, Public Utility Commissions will better understand if their tests are balanced and offering them the information they need to make decisions or not."

The report recommends that energy efficiency screening practices account for relevant benefits—even those that are difficult to quantify and monetize. This new framework's core recommendations are designed to ensure that the public interest, energy policy goals, and relevant benefits are considered in a transparent, consistent way.  By adopting the proposed framework, state efficiency screening practices will more accurately demonstrate the potential of energy efficiency programs and resources.  

The paper, coalition principles, and related materials are available at http://www.nhpci.org/campaigns.html.

The National Home Performance Council (NHPC) is a nonprofit working with governmental agencies, utilities, state programs, contractors, and others to provide cutting edge research and policy analysis to drive innovative policies and programs aimed at boosting the home performance industry's growth and profitability.

SOURCE National Home Performance Council