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HomeMy WebLinkAbout4 Conservation Agenda Item # 4 TRUCKE iu pal it iii�u� l�pii Workshop- special To: Board of Directors From: Doug Grandy Date: October 17, 2007 Subject: Conservation Committee Monthly Report Outline of Comments by Doug Grandy, Chair October 2007 1. Committee meeting Oct 11 a. Minutes of Sept 11 meeting attached b. Future meetings set: Nov 6; Dec 6; Jan 10; Feb 7 2. Subcommittee work is underway in earnest a. Committee meetings take a large block of time for Subcommittees b. Subcommittees are now all meeting in between full Committee meetings 3. Subcommittees a. Fiscal & Policy b. Strategies & Tactics c. Outreach 4. Questions? Truckee Donner Public Utility District Directors CONSERVATION COMMITTEE Joseph R.Aguera 6:OOPM -9:00 PM Thursday, October 11 2007 J. Ron Hemig � Patricia S. Sutton TDPUD Board Room Tim Taylor 11570 Donner Pass Rd. Bill Thomason AGENDA General Manager Peter L. Holzmeister 1. Call to order 2. Roll call 3. Approval of minutes— September 11, 2007 meeting 4. Public input — This is time set aside for the public to address any matter not on the agenda. Testimony related to any agendized matter should be addressed at the time that item is considered. 5. Presentation on TDPUD Budget and Financing—given by Mary Chapman 6. Set Meeting Dates: Nov 07— Feb 08: proposed schedule is Tuesday Nov 6, Thursday Dec 6, Tuesday Jan 10, Thursday Feb 8 7. Subcommittee Meetings—Outreach, Strategies &Tactics, and Policy& Fiscal 8. Subcommittee Progress Reports—Outreach, Strategies&Tactics, and Policy& Fiscal 9. Review and approve items for October Report to TDPUD Board, October 17 meeting 10. Adjournment Mailed on October 8, 2007 Scott Terrell, Conservation Public participation is encouraged. The meeting location is accessible to people with disabilities. Every reasonable effort will be made to accommodate participation of the disabled in all of the Districts public meetings. If particular accommodations for the disabled are needed (i.e.,disability-related aids,or other services),please contract the Clerk of the Board at(530)582-3909,at least 24 hours in advance of the meeting. TDPUD Citizens Advisory/Conservation Committee 6:06pm—9:00 pm, September 11, 2007, Tuesday TDPUD Board Room 11570 Donner Pass Road Minutes 1. Call to Order 2. Roll Call - Doug Grandy 6:lOpm Present: Ben Benson, Rolf Godon, Eric Perlman, Scott Terrell, Doug Grandy,Joanna Walters, Tom Gorin, Anna Denim, Christa Finn, Jim Booth, Gerald Herrick, Ronnie Colby Members of the Public Attending: Bob Johnston Brian Woody Robert Mowris 3. Approval of Minutes of August 16, 2007 meeting—unanimously approved. 4. Public comment(15 min)by Bob Johnston. (See handout entitled"Remarks to T-D PUD Conservation Committee.")Committee asked questions at end. Mr. Johnston expounded on some parts of the handout and left the remainder of the document to the committee's review. Johnston essentially proposes a program of comprehensive building retrofits, doing a complete retrofit of all cost-effective measures while there, then moving on to next building, as opposed to multiple visits for individual hardware-based programs. Eric Perlman - regarding the final point of Johnston's presentation, Perlman stated that re. electric vs. gas stoves, the TDPUD can incentivize ways to transition from electricity to natural gas or otherwise. BJ - Buildings with biggest bills per sq ft should be targeted first. Year-rounders first. Scott T says that the TDPUD database could be combed to review the residences and businesses separately for kWh used and then establish thresholds for who gets called about high use and when. 5. Presentation by Robert Mowris, PE—on TDPUD Loads and opportunities to reduce them. He referred to March of 2005 presentation co-presented with Scott Terrell then continued his presentation. Robert Mowris: This is a presentation about saving energy—it is entitled "Rapid Development of a Conservation Program for TDPUD."Low income assistance available, and Investor Owned Utilities (IOUs) all have these programs. There are also programs for direct install—about 40% of these programs' funding dollars have been spent. One audit compiled four years ago has info about residential and small commercial auditors, duct testing, commercial lighting, etc... all relevant to Truckee. So Cal Edison(see Express Efficiency Training Materials)had one of these compiled. Lighting, food service (e.g., at grocery stores) air conditioning. Mowris presented other studies from as early as 1991. Best programs evaluated (Best Management Practices, as it were), summarized, and condensed. IOUs use(d)these. Cost effective programs utilizing the maximum amount of public benefits money have been dropped due to accelerated public use. 1 Draft Minutes: Conservation Committee, Sept 11, 2007 It's not that the technology hasn't existed—the incentives are not there, and the market doesn't reward that type of behavior. Program evaluation is key. Programs lack legitimacy without independent P party evaluations. 2.85% of the TDPUD's budget should be available for conservation and the money collected and put in a separate escrow account. That money should then be spent only on conservation. Board's spending is currently on measures for capital improvement. "Conservation is the measured net incremental cost." Make it clear that conservation resource is being purchased. Scott Terrell—2.85% can go to R&D, low income, RE resources, conservation, per AB 1890 (and ab995). SB 2021 mandates Power Conservation as first power resource for new power acquisition and a triennial savings target reported annually and third party evaluated. $200,000 currently being put into a conservation fund. Bob Johnston—we should suggest that the board provide a proper planning tool to creating a power production plan. Robert Mowris —water meters should start being used/read. Scott Terrell—commercial water is metered Robert Mowris—commercial lighting accounts for 39% of commercial energy use. Lighting Engineers of America has conducted numerous studies, some of which details Mowris shared, on lumen use. No shower water flow study has been done... Shower 5% Misc 18% HVAC 25% Refrigeration 8% Office 5% Water heating 3% Cooking 2% etc... Average cost of conserved energy is 3 cents/kWh Conservation director should be a manager from the demand side—conservation should be a separate entity. Management should be separate for numerous reasons. According to Robert Mowris, Scott Terrell ran the most cost-effective conservation program in the state of California. Mowris added that non-energy benefits need to be considered, too. Business and private and local government partnerships are important as well. Evaluate and measure! This allows for continual feedback, which allows for continual program improvement. Ask where's the money? Develop a three year plan that can be improved upon and replicated. Q and A 6. Committee Vision and Mission Statements (Agenda Item 5 from TDPUD Board Meeting 12-29-06 distributed) The five bullet points from resolution number 2007-03 for establishment a citizen advisory committee were reviewed by the entire committee and discussed. Also reviewed were the different resolutions in said packet. 2 Draft Minutes: Conservation Committee, Sept 11, 2007 Clarification on the 5 bullet points plus others may be needed. Scott Terrell emphasizes meeting the demands of the 5 bullet points first—convey that we understand the focus of conservation and are not wandering off track. Discussion ensued about the mission statement and different ideas were aired and discussed, most related to the 5 bullet points in resolution 2007-03. After committee-wide discussion, a"Committee Charge" was considered. It read very similarly to the specifications of resolution 2007-03. Tom Gorin made the motion to adopt Eric Perlman's version of the mission statement and Joanna Walters seconded it. Final "Charge to the Committee" "The TDPUD Conservation Committee will reduce the consumption of electric and water resources in the TDPUD service area through research, planning, program development, community outreach and close cooperation with the PUD Board of Directors. The Committee shall develop plans and programs to: o satisfy the requirements of the public benefits program related to conservation o evaluate the cost/benefit ratio of various conservation methods and recommend those practices that represent the best investment of the District's limited resources o reflect the District's preference for established and successful conservation practices, avoiding those practices that are still in the experimental or developmental stages o give special attention to low income persons o deal with the issue of irrigation water practices" The Committee's Mission Statement/"Charge"then passed unanimously. 7. Subcommittee meetings—Outreach, Strategies and Tactics, &Policy and Fiscal—Committees met for the remaining time. 8. Subcommittee Progress Reports—Outreach, Strategies and Tactics and Tactics, & Policy and Fiscal - none 9. Next Meeting Date—Thursday, October 11, 2007, 6-9pm Tuesday Sept 18`h AB2021 meeting at CEC, Tom Gorin announced. It was reiterated that the TDPUD CC members are to notify Scott Terrell about any subcommittee meeting(s)to be held in advance so that he can notify everyone appropriately, as per Committee Policy. Meeting adjourned 8:50 pm 3 Draft Minutes: Conservation Committee, Sept 11, 2007 Remarks to T-D PUD Conservation Committee Bob Johnston rajohnston@ucdavis.edu 582-0700,Sept. 11, 2007 Need Strategic Plan I think a strategic plan is needed that brings about several changes: 1. The Board recognizes the size of the conservation problem and funds the work. The funding of a strong building retrofit program will be significant. About 100 buildings per year, at$10,000 per building, would be $1M, for ex. This cost goes onto rates, as a current cost (5% rate increase?). This would hit the 1,000 oldest building over a decade. Perhaps it must start more slowly. 2. A defensible financial test is used to determine which building retrofits to fund, so the Board knows that the program is cost-effective not only for customers,but for the PUD. So, the program must focus on older buildings and on doing full retrofits for them. This approach gets the most energy savings, for any set number of buildings. Also, it will tend to reach lower-income occupants and middle-income owners. 3. The rate increases to fund the conservation program are accepted by the customers. So, the committee's studies must demonstrate how the conservation expenditures, over 5, 10, and 20 years, increase average customer bills less than does purchasing more electricity. A. New Definition of Energy Service 1. The current definition is "provide electricity at lowest practical cost." 2. The new definition should be "provide energy end uses at lowest long-term cost." End uses are heating, lighting, etc. The actual services used by the customer. The difference is that the new definition allows demand reduction to be paid for, if it is cost- effective, in terms of the deferred (decremental) costs of new electricity acquisition. This is a difficult concept to gain acceptance for, since the PUD would be paying for investments in private buildings. It is done in many utilities. Education will be needed. B. The Viewpoint of the Cost-Effectiveness Analysis 1. Should be done from the customer's viewpoint, that is we should be trying to reduce costs to the customer, not the utility. This idea sells to customers,but may be difficult for the Board. 2. This means the future cost of electricity used in the analysis would be something like 20 cents, not the wholesale cost to the PUD of something like 6 cents. This assumption has a profound effect on the number of retrofit measures that are funded. 3. A related issue is whether to include in the assumed future cost of electricity to the customer an "adder" for greenhouse gases. This "shadow price" accounts for the external costs imposed on the world by the customer, costs which are not priced currently. An advantage of using the adder is that the State or Federal government are sure to impose a carbon tax of greenhouse gas tax in the future and so we will have the prices right, in advance. This means the PUD will not have to undergo a large price shock. C. The Definition of Cost-Effective Conservation Measures 1. The measures may be arrayed by increasing cost, in a "step graph," for visualization. They will range from weatherization and CFLs, which have negative costs, to retrofitting insulation in roofs, or whatever, at high cost per Kw-hr. Basically, we need to know how far to go along this list, for 4 Draft Minutes: Conservation Committee, Sept 11, 2007 each building. Software on a laptop is used to roughly model the building by size, construction type, window area, vintage, etc. and determine the costs for each measure. 2. I guess we have to do the analysis assuming full-time occupancy, to be safe, although this messes up the calcs for the current owner or occupier, it they are part-time. The measures will be not cost-effective for part-time occupancy. This is a policy decision. 3. The payback period, in years, needs to be assumed, in order to do this cost analysis. Owners of buildings paying for retrofits have wanted short payback periods, of a few years, in the past, because of uncertainty about costs and because of concern that future buyers of the building would not credit the lower energy bills to the value of the building. So, the PUD needs to have a formal method of certifying the ave. annual reductions in energy costs (before retrofitting, minus after retrofitting) and calculate a present value of this stream, which is the added capital value of the building. In this way, the Board will accept the proper, life-cycle time period, which is 20 years. We need to use normal time-discounting, where all future costs are discounted at a few percent per year, which is the proper method. We should use the government discount rate, which is lower than the private one, because this is a government analysis. 4. In conventional economic analysis of a series of policies, one adds in one measure at a time, starting with most-cost-effective and going through the list. You redo the cost-effectiveness calc. each time(on the new measure's incremental cost-effectiveness) and you stop when the Nth measure is not cost-effective (cheaper than 20? cents per Kw-hr). I prefer not to use this conventionally used "marginal" analysis,but to use "package" analysis, where the auditor evaluates measures cumulatively, as you go through the list. This method results in more measures being adopted and results in a higher net present value of the package. Also, it is easier to explain to customers. 5. If you adopt this method, you do not want to have measures being semi-randomly adopted by building owners, based on opportunity and intuition(CFLs, a few appliance trade-outs, for ex.), as this makes the building more cost-effective and fewer other measures then past the cost- effectiveness test. 6. You want to do a full analysis of each building and recommend the full package and then fund it. This raises the issue of"how do we get into the building to do the analysis?" D. A Proposed Tactic for Getting Owners to Request an Audit 1. I assume that commercial/industrial building owners will allow an audit and so we can simply call them and schedule an audit. Older buildings would go first, as they will result in the most electricity savings the fastest. The PUD would have a certified group of auditors that do the audits for free, paid by the PUD. The main issue here is whether the PUD wants to fund retrofits for a set of owners who rationally may well do most of these measures on their own. Perhaps, the PUD should just do free audits for this group. A policy decision. 2. For residences, I propose that CFLs be used as "bait" to get building owners interested in the PUD's Energy Conservation Program. Bulb-Mobiles could go to the oldest buildings and solicit conversations with the owners, as part of giving out a few CFLs for them to try out. The purpose of this initial contact would be to get permission to have an auditor come back and do a full audit. After the full audit, most owners will approve the retrofits, since they will be free to them. 5 Draft Minutes: Conservation Committee, Sept 11, 2007 3. I think this system will result in an effective conservation program, where each building is retrofitted only once, which I take to be key to cost-effectiveness, from the PUD's viewpoint. Also, we maximize energy savings, for any set number of buildings. E. Other Conservation Programs 1. Interruptible power? Large customers. Manufacturing only. Probably no takers here. 2. Time-of-day electricity rates. New meters required. Start with large customers. Start changing meters over now. For all buildings, or perhaps for first homes first. They use more juice and are more sensitive to cost. A very important program, for reducing costs. 3. How to coordinate with the Town. The Town should beef up its new commercial construction standards, so the PUD doesn't have to ever retrofit those buildings. Then, large residential, then small residential. I will try to get this into the Dev. Code, being revised this year and next. The Green Building Committee is moving slowly. 4. How to coordinate with SW Gas. 6 Draft Minutes: Conservation Committee, Sept 11, 2007