# Presentation: 440119

## STATE AND LOCAL CLIMATE CHANGE PARTNERS

**E****NERGY**** E****FFICIENCY ****P****ROGRAMS**** **
**P****RESENTED**** T****O**
**S****TATE**** ****AND**** L****OCAL**** C****LIMATE**** C****HANGE**** P****ARTNERS**
**N****OVEMBER**** 7, 2002**

## BACKGROUND ELECTRIC EFFICIENCY PROGRAMS

- Retail competition in ERCOT began January 1, 2002 for investor-owned utilities
- Competition delayed in other areas
- Adequate supply of generating capacity
- Transmission limitations may result in regional and temporal price differences

## NEW ELECTRIC GENERATING

**11**

**13**

**22**

**17**

**23**

**24**

**46**

**38**

**41**

**32**

**51**

**28**

**27**

**26**

**19**

**25**

**20**

**18**

**54**

**47**

**49**

**39**

**21**

**50**

**33**

**36**

- 45 Projects completed: 14,897 MW

**N****EW ****E****LECTRIC ****G****ENERATING**
**P****LANTS IN ****T****EXAS**

- 17 Projects under construction: 12,788 MW

**35**

**42**

**77**

**34**

- 32 Projects announced: 18,898 MW** **

**45**

**37**

**74**

**31**

**87**

**84**

**44**

**56**

**53**

**52**

**57**

**89**

**90**

**58**

**55**

**70**

**88**

**65**

**94**

**66**

**83**

**86**

**61**

**82**

**60**

**43**

**48**

- _Harris County_

**1**

**2**

**3**

**4**

**5**

**7**

**8**

**9**

**12**

**15**

**16**

**6**

**10**

**29**

**30**

**59**

**73**

**67**

**85**

**68**

**62**

**76**

**79**

**81**

- _Ellis County_

- 02-04-02

**63**

**40**

**91**

**80**

**SPP**

- ERCOT - Electric Reliability Council of Texas
- SERC - Southeastern Electric Reliability Council
- SPP - Southwest Power Pool
- WSCC - Western Systems Coordinating Council

**WSCC**

**ERCOT**

**SPP**

**SERC**

**14**

**64**

**71**

**72**

**92**

**93**

**95**

**75**

**78**

**X1**

**X2**

**X3**

**X4**

- 12 Announced projects on hold 9,165 MW

- 4 Announced projects cancelled 3,580 MW

## ENERGY EFFICIENCY PROGRAMS

- Senate Bill 7 (1999 session) requires **utilities to conduct** energy-efficiency programs
- Senate Bill 5 (2001 session) requires **PUC to conduct** energy-efficiency grant program

## CLEAN AIR PROGRAMS IN SB 7

- Renewable energy mandate
- Retrofit or shut-down of grandfathered gas and coal generating plants
- Energy efficiency program

**Notes:**
In the old world, your utility company provided all aspects of your electric service:  Generation, Transmission & Customer Service.  

Being able to select your REP will give you more control over your energy buying decisions.  

The Transmission and Distribution system (i.e. poles & wires) will remain regulated to ensure customers receive safe and reliable power.

## SENATE BILL 7 ENERGY EFFICIENCY PROGRAM

- Utilities required to meet 10% of growth in demand through energy-efficiency programs
- Standard offers and market transformation programs
- Objective is to obtain cost-effective energy-efficiency programs from third parties

## SENATE BILL 5 ENERGY EFFICIENCY PROGRAM

- PUC grant program
- Utilities in non-attainment areas and affected counties apply for grants
- Utilities may use standard offers or market transformation programs
- Funded from SB 5 revenues

## PROGRAM EVALUATION

- SB 5 requires calculation of reduction in air emissions from SB 5 and SB 7 programs
- Energy efficiency to meet part of shortfall in State Implementation Programs for Houston-Galveston and Dallas-Fort Worth

##   To contribute to the reduction in air emissions, in non-attainment and affected counties, by reducing electric demand and peak loads.

-   To contribute to the reduction in air emissions, in non-attainment and affected counties, by reducing electric demand and peak loads.

**E****NERGY**** E****FFICIENCY**** G****RANT PROGRAM**

## ELIGIBLE JURISDICTIONS

##     LEGISLATION AND RULES

-     **L****EGISLATION**** ****AND**** ****R****ULES**
-   Health and Safety Code **§§ **386.201-386.205
-        	  (Senate Bill 5, 77th Legislature)
** **Develop a Grant Program
-   Finance Program with 7% of the TERP Fund
-   Funds may be Awarded to Electric Utilities, Electric
-                      Cooperatives and Muni-Owned Utilities
-   Administrative Cost NTE 10% of Budget
-   Obligations are Separate from PURA 39.905
- 	     (E.E. _>_ 10% of Utility’s Annual Growth in Demand)
-   Emissions Reductions May Not Satisfy State or Federal
- 	     Laws or Regulations to Reduce Air Emissions
-   Provide Report to TCEQ Quantifying Reductions in
-      Energy Demand, Peak Loads and Associated Emissions
-      Achieved from SB5 Programs, as well as SB7

##  LEGISLATION and RULES (Continued)

-  **L****EGISLATION**** and R****ULES**** (****Continued****)**
-   Sub. Rules **§§ **25.182 and 25.183
**	**
**        ****§ 25.182  Implementation Guidelines**** **
** **Utilize Templates Consistent with § 25.181
-   Retire the Replaced Material and Appliances
-   Eligibility Requirements
-   PUC Administration
-   Competitive Criteria
-   Cost Effectiveness and Avoided Cost Requirements
-    Incentive Levels Consistent with § 25.181
-          **§ 25.183 Reporting Requirements**
-   April 1st Report to PUC Requirements of § 25.181
-   Reduction in Peak Demand and Energy Consumption
-      for SB 5 and SB 7 Programs
-   File Proprietary Data in Accord with § 22.71
-   PUC to Report Annually to TCEQ

**Notes:**
In the old world, your utility company provided all aspects of your electric service:  Generation, Transmission & Customer Service.  

Being able to select your REP will give you more control over your energy buying decisions.  

The Transmission and Distribution system (i.e. poles & wires) will remain regulated to ensure customers receive safe and reliable power.

##    			 Five Fees and Surcharges =  $11 Million
Construction Equipment

Retail Sale or Lease of Pre-1997 On -Road 
      Diesel Motor Vehicles Exceeding 14,000 pounds

Truck-Tractor or Commercial Vehicle 
      Registration Surcharge 

Commercial Motor Vehicle Inspections

Registration Fee on Vehicles Coming to Texas
		             AKA - Greensheet Fee [68% of TERP Fund]

- Construction Equipment
- Retail Sale or Lease of Pre-1997 On -Road
-       Diesel Motor Vehicles Exceeding 14,000 pounds
- Truck-Tractor or Commercial Vehicle
-       Registration Surcharge
- Commercial Motor Vehicle Inspections
- Registration Fee on Vehicles Coming to Texas
- 		             AKA - Greensheet Fee [**68% of TERP Fund**]

**R****EVENUE ****A****NTICIPATED**

**Notes:**
You should also have a REP Worksheet handy.  

You can get one from the Texas Electric Choice Web site or by calling our toll-free answer center.

The worksheet provides questions whose answers are the types of thing you should know about before you sign up with a new REP.  

## PILOT YEAR PROGRAM 2002

**  ****Implementation Challenges**
**          **	1. Restructuring of Electric Market
-           	2. Revenue Slow Coming
-           	3. Abbreviate Timeframe
-           	4. Estimate Air Emissions Reductions
**         **
**  ****Outreach**
**  ****Application Process**
**  ****Criteria for Evaluation**

##     REVENUE RECEIVED

|  
REVENUE | 
REVENUE COMMITMENTS |
| --- | --- |
| 

$1,380,836 | 
$215,000 administration

$267,950 Grant Award Commitments:

$200,000 load management
        program (Reliant)

$67,950 commercial lighting
       program (Entergy)
 |

## 	  
 CRITERIA FOR EVALUATION

Quantify Reductions of Electric Consumption and Production 
     Maximum Points: 30

Where Programs are Offered
	Maximum Points: 15

Cost and Benefits
	Maximum Points: 15

Service Area Sources of Electricity
	Maximum Points: 20

Ability to Complete Project within Prescribed Timeframe Maximum Points: 10

Additional Criteria
	Maximum Points: 10

** ****C****RITERIA FOR ****E****VALUATION**
**Quantify Reductions of Electric Consumption and Production**_** **_
**     **_**Maximum Points: 30**_
**Where Programs are Offered**
**	**_**Maximum Points: 15**_
**Cost and Benefits**
**	**_**Maximum Points: 15**_
**Service Area Sources of Electricity**
**	**_**Maximum Points: 20**_
**Ability to Complete Project within Prescribed Timeframe**** **_**Maximum Points: 10**_
**Additional Criteria**
**	**_**Maximum Points: 10**_

##  ELECTRICAL UTILITY PARTICIPATION 

** **Four Proposals from Three Non-Attainment Areas
- Two Proposals Selected for Funding
- $67,950 Commercial Lighting Entergy Proposal
- $200,000 Load-Management Reliant Proposal
- Proposed Energy Reductions
-  Entergy 150 kW and 1,300,000 kWh Reductions
-  Reliant 2.12 MW Peak Load Reduction

## ESTIMATINGEMISSION REDUCTIONS

**   **The PUC, TCEQ and the EPA  developed a simplified model to estimate emissions reductions resulting from the SB 5 Energy Efficiency Grant Program and those mandated by SB 7.
- 	It is possible that additional modeling of the impact of energy-efficiency on air emissions may be needed.

## EMISSION REDUCTIONS

***SB 5 Results***
**         ****$67,950 **
***2.028 tons NO******x***
*** ******	******Reduction***
***Net Cost =***
***	******$19,403 per ton***
***	***_***Net Project Life =***_
***	***_***-$4,638 ***__***per ton***_
***Gross Cost = $33,506 per ton***
***	***_***Gross Project Life =***_*** ***
***	***_***$3,351 per ton***_

***SB 7 Results***
***       ******$43,856,823 ***
***415 tons NO******x ***
***	******Reduction***
***Net Cost =***
***	******$92,727 per ton***
***	***_***Net Project Life =***_
***	***_***$3,196 per ton***_
***Gross Cost =******	***
***	******$105,794 per ton***
***	***_***Gross Project Life =***_
***	***_***$10,579 per ton***_

## Future Activities Summary

| 
Request for Proposals
January 2003

$ 1.5 Million
 |
| --- |

## REFERENCE DOCUMENTS

**R****EFERENCE ****D****OCUMENTS**
_**www.puc.state.tx.us/electric/**_
_**projects/25309/25309.cfm**_

##  CONTACT INFORMATION

**T****HERESA ****G****ROSS**
**E****NERGY ****E****FFICIENCY ****G****RANT ****A****DMINISTRATOR**
**P****UBLIC ****U****TILITY ****C****OMMISSION**
**1701**** N. ****C****ONGRESS ****A****VENUE**
**A****USTIN, ****T****EXAS**
- 512.936.7367
**theresa.gross@puc.state.tx.us **