These regulations are promulgated pursuant to 29 Del.C. §8059(h). Affected energy providers that are not regulated by the Commission may elect to develop, implement and fund programs for energy efficiency and peak demand reduction recommended for approval by the boards of directors for rural electric cooperative or the pertinent local regulatory authorities for municipal electric companies.
“Baseline” means conditions, including energy consumption and related emissions that would have occurred without implementation of the subject measure or project. Baseline conditions are sometimes referred to as “business-as-usual” conditions and are used to calculate program-related efficiency or emissions savings. Baselines can be defined as either project-specific baselines or performance-standard baselines.
“Coincident Peak” means the time period of highest system load; for purposes of this regulation, the definition of coincident peak is equivalent to PJM’s definition of energy efficiency performance hours under the Reliability Pricing Model (RPM), defined as the hours ending 15:00 through 18:00 Eastern Prevailing Time (EPT) during all days from June 1 through August 31, inclusive, that is not a weekend or federal holiday.
“Deemed Savings” means a measurement of energy savings or demand savings for a single unit of an installed energy efficiency measure or adopted efficiency practice that (a) is determined ex ante and applied to all such measures without further measurement or verification, and (b) has been developed from data sources and analytical methods that are widely considered acceptable for the measure and purpose.
“Demand Response (DR)” means the temporary reduction of customer energy usage at times of peak usage in order to help system reliability, to reflect market conditions and pricing, or to support infrastructure optimization or deferral of additional infrastructure. Demand response programs may include contractually obligated or voluntary curtailment, direct load control, and pricing strategies.
“Effective Useful Life (EUL)” means the average time over which an energy efficiency measure results in energy savings, including the effects of equipment failure, removal, and cessation of use. The Delaware TRM shall be the primary source of EUL data.
“Equity-of-service” means that programs cannot exclude otherwise eligible groups of ratepayers (who are paying into the program) because of their different attitudes or opinions about energy use or energy savings.
“Evaluation, Measurement and Verification (EM&V)” means any and all independent research and analytical activities occurring during or after implementation of efficiency programs intended to assess or estimate the accuracy of measure or program impacts, or assessment of the efficiency and effectiveness of the program design and implementation.
“Ex-Post Evaluated Savings” means savings estimates developed and reported by an Independent Evaluation Contractor (IEC) resulting from an energy impact evaluation of past efficiency program activity. These can be either gross or net savings, as defined in this section.
“Gross Savings” means the change in energy consumption and/or demand that results directly from program-related actions taken by participants in a program, regardless of whether the savings are ultimately attributable to the program. Gross savings may be deemed per unit based on ex-ante estimates or evaluated ex-post results.
“Mid-Atlantic TRM” means the Technical Reference Manual applicable to select states within the Mid-Atlantic region, which is developed collaboratively by participating members in the Mid-Atlantic region.
“Net Present Value (NPV)” means the value of a stream of future costs and/or benefits converted to a single sum in a specific year, usually the first year of the analysis, using a discount rate as specified in these regulations. It can also be thought of as the equivalent worth of all costs and benefits relative to a base point called the “present.” NPV takes into account the time value of money by discounting future streams of costs and benefits.
“Net Savings” means (Gross Savings) – (savings attributable to Free Riders) + (savings attributable to Spillover) + (savings attributable to Market Effects). Net savings are the energy savings that are attributable to a program’s intervention in the market, exclusive of other reasons for changes in energy use.
“Process Evaluation” means an evaluation that indicates how to improve the structure and delivery of a program or project. These evaluations typically survey program stakeholders, analyze their feedback, and use this information to identify opportunities for program improvement.
“Program Administrator (PA)” means any effected energy providers, as defined by 29 Del.C. §8059(h) and any other entities who deliver energy efficiency programs and want the energy savings generated to count towards the statewide energy reduction goals.
“Program Implementer” means an entity hired by the Program Administrator to plan, implement, and deliver EE programs on their behalf.
“Program Year” means the annual regulatory period for which an approved program operates, and aligns with the program annual budget and impact targets. In Delaware, the energy efficiency program year runs from January 1 through December 31.
“Realization Rate” means the ratio of evaluated Gross Savings to initial pre-evaluation claimed Gross Savings. The basis for a realization rate varying from 1.0 can include several considerations such as the following: 1) adjustments for data errors, 2) differences in implemented measure counts as a result of Verification activities, and/or 3) other differences revealed through the evaluation process, such as with respect to adjustments to baseline assumptions or per unit savings estimates.
“Rigor” means the level of effort expended to minimize uncertainty due to factors such as sampling error and bias. The higher the level of rigor, the more confident one is that the results of the evaluation are both accurate and precise.
“Spillover (free drivers)” means EE or DR measures that are not directly counted as resulting from program participation, but are taken as a result of the program’s influence on customers or markets. There are two general types of spillover: (1) participant spillover, in which program participants adopt additional efficiency measures or practices that are not counted directly as part of the program tracking system; or (2) non-participant spillover in which actions are taken by non-participants due to the general influence or awareness-raising effects of the program.
“Technical Reference Manual (TRM)” means an operating manual that describes the standardized approaches to be used for estimating savings from the installation of energy efficiency measures or adoption of efficiency practices. It provides a common comparable approach for estimating energy savings across programs and market sectors for the measures typically installed via the energy efficiency programs.
“Verification” means an independent ex-post assessment of an energy efficiency or demand response program that confirms: (1) the installation rate of measures installed through the programs; (2) the installation meets reasonable quality standards; (3) the measures are operating correctly and have the potential to generate the predicted savings; and (4) tracked savings estimates are properly calculated based on agreed upon deemed values or rules in the TRM. Verification may include one time or multiple activities over the effective useful life of the measures.
4.2 The Delaware TRM consists of the Mid-Atlantic TRM version 6.0, as published by the Northeast Energy Efficiency Partnership’s Regional EM&V forum in May 2016, plus additional measures to address Delaware-specific conditions.
5.1 The EEAC and DNREC shall provide oversight of EM&V for PA energy efficiency portfolios in Delaware. These parties will work together to plan, implement, and review evaluations, including impact, process, market assessments, cost-effectiveness analysis, and baseline research. The following entities shall be engaged in and have responsibilities for EM&V in Delaware, as summarized in the remainder of this section, and including all specific responsibilities defined in greater detail in subsequent sections.
5.2.1 The EEAC shall oversee, plan and guide Delaware energy-efficiency program evaluations and EM&V related activities both pursuant to and not explicitly expressed in these regulations. The EEAC will approve portfolio-level EM&V plans and budgets.
5.2.2 The EEAC shall establish a schedule for meetings to discuss progress of on-going work and to plan and manage new research. The EEAC may establish subcommittees as needed to handle details best suited for smaller groups or matters that affect a sub-set of all PAs.
5.2.4 The EEAC shall work collaboratively with the PAs to develop EM&V plans. EM&V plans should clearly outline the approach for each program or portfolio evaluation including detailing level of expected rigor and reliability of results.
18.104.22.168 Annual Portfolio Plan Updates: The EEAC shall develop a general plan of EM&V activities to be conducted in the upcoming year. Annual EM&V plans shall allow for modifications, with justification, to the overall Three-Year Plan to accommodate new information or program or portfolio changes. The EEAC shall reach agreement on the Annual EM&V plans in advance of the launch of the program year to which the EM&V plan pertains.
5.3.1 DNREC may hire an EEAC Consultant to represent the EEAC and to assist with the planning and oversight of EM&V activities in Delaware. DNREC’s oversight responsibilities related to acquiring EM&V services include: 1) competitively acquiring EEAC Consultant services, and 2) establishing, managing, and overseeing EEAC Consultant service acquisition process and the day-to-day management responsibilities required to successfully implement the EEAC Consultant’s efforts.
5.4.2 PAs are responsible for the direct development and implementation of all EM&V activities required for their energy efficiency portfolio in adherence with these regulations, and for ensuring that efforts are consistent with the policies, procedures, approaches and timelines that meet Delaware’s needs.
5.4.3 The PAs shall inform the EEAC of major changes to existing programs prior to their implementation so that the EEAC can develop or approve any necessary EM&V plans. Each PA must ensure that data is supplied to IECs as needed and in a timely fashion. The PAs must ensure that their program third-party implementers also track necessary data and cooperate fully with IECs in support of all EM&V activities.
5.4.4 Each PA shall annually submit an EM&V report to the EEAC highlighting findings from the past program year. The report shall be submitted within 30 days of completion of all annual EM&V reports for the following year and include the following information.
22.214.171.124 A summary of impact evaluation findings, as appropriate by program and for the portfolio as a whole, showing original PA tracked savings, actual evaluated gross and net savings performance, original program goals, evaluated NTG ratios, and evaluation realization rates. For programs not undergoing impact evaluations for that year, the summary should provide the tracked and claimed gross and net savings consistent with prior agreements, deemed savings and the TRM, and indicate these are unevaluated results.
126.96.36.199 Estimates of ex-post evaluation estimated savings and cost-effectiveness results by program and for the portfolio as a whole, performed and calculated in a manner consistent with the EM&V regulations.
5.4.6 PAs are encouraged to offer their eligible program resources into the PJM RPM capacity market so long as it is cost-effective and the evaluation of such resources remains compliant with these regulations.
6.1.1 EM&V reports shall provide an assessment of EM&V activities completed in a manner that is consistent with these regulations. Reports shall be provided as determined by the EEAC. The final reporting timeline shall be established so that it can efficiently and cost-effectively meet the needs of the PAs, EEAC and the PJM RPM capacity market compliance cycle whenever possible.
6.1.2 Program cycle reporting shall include both impact and process evaluations findings, as appropriate by program, and will be used to measure performance against program goals. Impact evaluations shall report energy impact estimates for each year of the program’s operations and for the program cycle in total, when available. This reporting shall allow the evaluation to document program-cycle impacts as well as annual impacts that support program planning and restructuring efforts to maintain high performing programs and portfolios.
188.8.131.52 For impact studies, ex-post cost-effectiveness results
6.1.4 The following information shall be included in a table format or bullet list within both the Executive Summary of the draft and final evaluation reports as well as in the sections of the report in which those items are presented and discussed. The goal of this requirement is to allow efficient and rapid extraction of key results to better understand the study results.
6.2.1 Energy Efficiency programs and portfolios in Delaware must meet the benefit-cost requirements outlined in these regulations. PAs shall develop program and portfolio plans to achieve positive net benefits based on the cost-effectiveness test described below. PAs are responsible for providing prospective planned cost-effectiveness test results to EEAC for review at the program and portfolio level. In addition, the IECs and PAs must provide the EEAC with retrospective cost-effectiveness test results at the program and portfolio level. Portfolios shall be developed to maximize long term cost-effectiveness and consider investing in the activities and resources needed to establish the groundwork for programs in the future.
184.108.40.206 Programs are considered cost-effective when the benefit-cost ratio as determined by the Total Resource Cost (TRC) test is greater than one. The TRC test compares the costs and benefits of energy efficiency programs as a resource option from the perspective of the entire economy. The formula for the TRC test is:
220.127.116.11 Benefits include all benefits to the utility, its ratepayers, and other Delaware constituents that result from changes in energy consumption resulting from energy efficiency programs. The benefits calculated in the TRC shall include, when determined by the EEAC to be reasonably quantifiable:
18.104.22.168.2 avoided electric transmission, distribution, and generation capacity costs, valued at marginal cost for the periods when there is a load reduction, based on relevant costs in the respective zone of the PJM Regional Transmission Organization;
22.214.171.124.5 the effect of lower prices for electric and gas energy and capacity in wholesale markets resulting from reductions in the quantity of energy and capacity sold in those markets, sometimes referred to as Demand-Reduction-Induced Price Effect (DRIPE);
126.96.36.199 Net present value - Cost-effectiveness of an energy efficiency measure, program, or portfolio will be calculated based on the net present value of the costs and benefits valued in the TRC test, discounted over the effective useful life of the measures installed.
6.2.4 Although the TRC test will serve as the primary criterion for determining program cost-effectiveness, customer rate and bill impacts shall be provided in portfolio plans to help inform the planning process. The results of additional cost-effectiveness tests may also be reported.
188.8.131.52 For program models that are market driven, including replace on failure or end of life, new construction, renovation, remodel, or any other reason the customer is already planning to install equipment, the Delaware TRM shall use one of the following approaches to establish deemed baselines, unless specified in the Delaware TRM to be site or customer-type specific:
Code or standard: Energy impact baseline is set at the minimum building code or the minimum appliance standard without compliance adjustments
Typical Code or Standard with Compliance Adjustment: Energy impact baseline is set at the typically applied building code or appliance standard adjusted for estimated compliance
Market Mean or Mode: Energy impact baseline is set at the mean or mode market practice for that equipment, depending on the distribution
184.108.40.206 For programs models that result in equipment replaced earlier than what would have occurred without the program (early replacement or “retrofit”), or where additional or optional equipment is added to existing equipment of systems, the baseline condition is the energy use condition prior to the program-induced change for the remaining useful life of the replaced measure. Once the remaining useful life has expired, the baseline should be established using one of the three methods outlined in subsection 220.127.116.11 and applied to the remaining useful life.
18.104.22.168 Baseline conditions for custom measures will be set for each project being evaluated so that it reflects the typical conditions associated with that custom application, consistent with the above guidelines for prescriptive measures. The IEC will review baseline assumptions established by project engineers, and if appropriate, suggest modifications.
22.214.171.124 Collaborate with the IECs and PAs on the evaluation efforts and review baseline approaches and savings assumptions to be used in the evaluation efforts ensuring they are developed in a manner consistent with the baseline approach established in these regulations.
6.4.1 Program results and goal achievement in Delaware shall be reported as Ex-Post Verified Net savings. Gross program savings that are verified by evaluation activities are then adjusted using previously-determined net-to-gross (NTG) ratios to yield an ex-post, verified net savings value.
6.4.3 Net savings, those savings that are caused by the program’s intervention in the market and that account for free riders, participant spillover and market effects, shall be used for purposes of assessing goal achievement and to provide program design and marketing guidance that can support planning for upcoming program years. An assessment of net-to-gross ratios may also be used by the EEAC, and other policy makers to assess when a program should be redesigned or terminated as a part of the Delaware portfolio.
126.96.36.199 The EEAC shall develop or approve NTG ratios to be applied to each program prospectively each year. These NTG ratios can be derived from specific research or from other best available information. The EEAC, in consultation with the IEC, shall agree on NTG values to use going forward, informed by evaluations and all other best available information.
188.8.131.52 Changes in deemed energy savings or other deemed assumptions that result from program evaluation shall not be applied retrospectively, but shall be applied to the program and portfolio prospectively in the next program cycle.
184.108.40.206 All transmission and distribution loss factors applied to customer or meter-level savings in order to estimate generation-level savings shall be based on estimates of marginal system line losses rather than average loss factors.
220.127.116.11 The EEAC shall coordinate with the DNREC to provide updates to the Delaware TRM so that savings used in Delaware reflect the most recent information available, including information gathered through program EM&V completed in Delaware.
7.2.1 Programs that are expected to save more energy (in both the near-term and over their measure lifetimes) or have high demand reduction impacts should have evaluation approaches that are more rigorous than those that are expected to save less energy.
7.2.3 Measures that have a high risk around the accuracy of the savings should have a high level of evaluation rigor, thus reducing the level of uncertainty around the energy saving estimates of that program and for the portfolio.
7.2.5 Sampling approaches, sample-size targets, and confidence limits should provide the highest level of accuracy achievable balanced with the available resources. Large programs and programs that are important for reaching energy saving targets should have sampling approaches that reflect that importance. Low impact or smaller programs may have lower precision and confidence levels.
7.2.6 Budgets devoted to process evaluations should consider the likely opportunities to identify program improvements, the current success of the program in terms of participation and overall program implementation, and the likely duration of the program effort
7.2.7 In order to reduce costs and remain consistent with other regional evaluation efforts, evaluations and related activities shall leverage, to the extent possible, the activities of other entities such as the Northeast Energy Efficiency Partnership’s Regional EM&V Forum and the Department of Energy’s Uniform Methods Project.
8.2 Updates to the Delaware TRM will be aligned with the update process for the Mid-Atlantic TRM and shall be completed annually by July 1. PAs planning to launch programs the following January 1 or later will use the updated Delaware TRM in planning for the subsequent year. PAs launching new programs in advance of January 1 of the subsequent year will use the standing values until the start of their next program year, at which time they will adopt the updates from the Delaware TRM for all forward-planning and reporting purposes.