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Delaware General AssemblyDelaware RegulationsMonthly Register of RegulationsJanuary 2017

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Under the authority vested in the Secretary of the Department of Natural Resources and Environmental Control ("Department" or "DNREC") pursuant to 29 Del.C. §§8058 and 8059, the following findings of fact based on the record, reasons and conclusions are entered as an Order of the Secretary in the above-referenced regulatory proceeding.
This Order relates to the proposed revised new regulation, to wit: 7 DE Admin. Code §2105: Evaluation, Measurement & Verification Procedures and Standards ("EM&V Regulations"). This promulgation seeks to finalize proposed revised new EM&V regulations as follows, to wit: (1) develop and govern the overall approach to the evaluation of energy efficiency and demand response programs in Delaware; (2) standardize evaluation approaches for the assessment of energy efficiency and demand response programs; (3) provide specific guidance to Program Administrators1, contractors and stakeholders for the evaluation of energy efficiency and demand response programs; and (4) ensure consistency between Program Administrators' energy efficiency evaluation plans, analysis, and reporting efforts.
Senate Bill 150 (with House Amendment 2) passed on July 1, 2014, was signed by Governor Markell on August 6, 2014, and was codified as 29 Del.C. §8059. This legislation enables Delaware electric and gas utilities to provide cost-effective energy efficiency programs to their customers, and helps Delaware meet the requirements of the Energy Efficiency Resource Standard Act ("EERS Act", "EERS"). Said legislation also requires DNREC to develop regulations to govern the expansion of cost-effective energy efficiency programs in Delaware, pursuant to 29 Del.C. §8059(h)(3).
The State of Delaware's Energy Efficiency Advisory Council ("EEAC") was also created pursuant to 29 Del.C. §8059. This thirteen-person council is comprised of energy efficiency stakeholders from DNREC, the Delaware Sustainable Energy Utility ("SEU"), and affected energy providers and representatives from the manufacturing, commercial environmental, agricultural, low-income, and residential sectors. The EEAC assists affected energy providers in the development of energy efficiency, peak demand reduction, and emission-reducing fuel switching programs. In collaboration with the Delaware Public Advocate ("DPA") and Public Service Commission ("PSC"), the EEAC is tasked to review energy efficiency program plans to ensure that programs are deployed and energy savings targets are met through evaluation, measurement, and verification standards.
The Department's Division of Energy & Climate commenced the regulatory development process with Start Action Notice 2014-08 dated October 23, 2014. The Department published its initial proposed regulation Amendments in the August 1, 2016 Delaware Register of Regulations. After numerous public workshops, stakeholder meetings, discussions and reviews, the Department placed legal notices in both the News Journal and the Delaware State News advertising that a public hearing would be held on August 29, 2016, to provide an opportunity for the public to comment on the draft regulation.
Based on the record developed by the Department's experts and established by the Hearing Officer's Report, I find that the proposed revised new regulation, to wit: 7 DE Admin. Code §2105: Evaluation, Measurement & Verification Procedures and Standards, is well-supported. Therefore, the recommendations of the Hearing Officer are hereby adopted, and I direct that the proposed regulatory revised new regulation be promulgated as final. Further, I find that the Department's experts in the Division of Energy and Climate fully developed the record to support adoption of this revised new regulation.
2. The Department has jurisdiction under its statutory authority, pursuant to 7 Del.C. Ch. 60, to issue an Order adopting these proposed revised new regulation as final, as shown in Appendix "B";
6. The adoption of the proposed revised new regulation, 7 DE Admin. Code §2105: Evaluation, Measurement & Verification Procedures and Standards, will allow Delaware to (1) develop and govern the overall approach to the evaluation of energy efficiency and demand response programs in Delaware; (2) standardize evaluation approaches for the assessment of energy efficiency and demand response programs; (3) provide specific guidance to Program Administrators, contractors and stakeholders for the evaluation of energy efficiency and demand response programs; and (4) ensure consistency between Program Administrators' energy efficiency evaluation plans, analysis, and reporting efforts.
7. The Department has reviewed these proposed regulatory Amendments in the light of the Regulatory Flexibility Act, consistent with 29 Del.C. Ch. 104, and believes the same to be lawful, feasible and desirable, and that the recommendations as proposed should be applicable to all Delaware citizens equally;
8. The Department's proposed revised new regulation, as originally published in the August 1, 2016 Delaware Register of Regulations, and as revised and set forth in Appendix "B" of the aforementioned Report, are adequately supported, are not arbitrary or capricious, and are consistent with the applicable laws and regulations. Consequently, they are approved as final revised new regulation, which shall go into effect ten days after their publication in the next available issue of the Delaware Register of Regulations; and
9. The Department shall submit this Order approving as final the proposed revised new regulation, 7 DE Admin. Code §2105: Evaluation, Measurement & Verification Procedures and Standards, to the Delaware Register of Regulations for publication in its next available issue, and provide such other notice as the law and regulation require and the Department determines is appropriate.
1"Program Administrator (PA)" is a defined term, both statutorily and within this new proposed regulation, as follows: "…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 toward the statewide energy reductions goals."
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. [Deemed savings values are agreed upon by the EEAC in advance of program implementation. If evaluation results indicate a need to change a deemed savings value, the new value will only be applied prospectively to measures not yet installed. Individual parameters or calculation methods can also be deemed.]
Delaware TRM” means a Delaware-specific Technical Reference Manual, as that term is defined in this section.
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.
Department of Natural Resources and Environmental Control (DNREC)” means the entity established by 29 Del.C. §8001.
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.
Energy Efficiency Advisory Council (EEAC or Council)” means the body created by 29 Del.C. §8059(h)(1)(a).
Energy Efficiency (EE) Programs” means energy efficiency, peak demand reduction, and emission-reducing fuel switching programs which seek to decrease consumption of electric energy or natural gas.
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” means the performance of studies and activities aimed at determining the effects of an efficiency program.
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.
Free riders” mean participants who participate in a program, but who would have adopted some or all of the efficiency measures without the benefits of the program.
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.
Impact Evaluation” means an evaluation that quantifies the direct and indirect results and benefits of a program or project using measured or deemed savings methods.
Independent Evaluation Contractor (IEC)” means a contractor hired by a Program Administrator to perform evaluation activities and products.
Market Effect” means the change in the structure or functioning of a market, or the behavior of participants in a market, that results, or is expected to result, from one or more program efforts.
Measurement and Verification (M&V)” means data collection, monitoring, and analysis associated with the calculation of gross energy and demand savings from individual sites or projects.
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.
Net-to-Gross Ratio (NTG)” means a factor or ratio representing Net Savings divided by Gross Savings.
PJM” means PJM Interconnection LLC, the organization that manages electricity transmission and wholesale electricity market for the region that serves Delaware or its successor at law.
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 [investor-owned or municipal utilities and other entities administering any energy efficiency program governed by 29 Del.C. §8059(h). 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.
Public Advocate” means the entity established by 29 Del.C. §8716.
Public Service Commission (PSC)” means the entity established by 26 Del.C. §103.
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.
Reliable Pricing Model (RPM)” means PJM’s capacity market.
Renewable Energy Credit (REC)” means a tradable instrument defined by 26 Del.C. §352(18) used to demonstrate compliance with the percentage requirements set forth in 26 Del.C. §354(a).
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.
Solar Renewable Energy Credit (SREC)” means the tradable instrument defined by 26 Del.C. §352(25) used to demonstrate compliance with the percentage requirements set forth in 26 Del.C. §354(a).
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.
6.1.3.12 For impact studies, ex-post cost-effectiveness 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 [overall] 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.
[6.2.6 DNREC Responsibilities for Benefit-Cost Analysis
6.2.[76] Program Administrator Responsibility for Benefit-Cost Analysis
6.2.[76].1 Develop estimates of avoided costs and line losses, for review, discussion and approval by the EEAC.
6.2.[76].2 Perform benefit-cost analysis for energy efficiency measures, programs and portfolios for planning purposes using Delaware TRM values and best available information as appropriate.
6.2.[76].3 Provide IECs with appropriate input data and ensure that the IECs perform required benefit-cost analyses based on ex-post evaluation results and submit timely reports to the EEAC.
6.2.[76].4 Report planned and ex-post benefit-cost calculation results to EEAC.
6.2.[76].5 Provide data and benefit-cost analyses models to the EEAC for review, if requested
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
7.2.4 Field measurement and verification efforts should focus on the [components programs] of the portfolio that have the greatest risk of lowering the reliability of the total impact estimates.
DE TRM complete 2016 (http://regulations.delaware.gov/register/january2017/final/DE TRM complete 2016.pdf)
Last Updated: December 31 1969 19:00:00.
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