Washington Administrative Code › Title 194 - Commerce, Department of (Energy) › Chapter 194-37 - Energy independence › Section 194-37-070 - Development of conservation potential and biennial conservation targets

Current through Register Vol. 24-14, July 15, 2024
(1) Ten-year
			 potential. By January 1st of each even-numbered year, each utility shall
			 identify its achievable cost-effective conservation potential for the upcoming
			 ten years.
(2) Biennial target. By
			 January 1st of each even-numbered year, each utility shall establish and make
			 public a biennial conservation target. The utility's biennial target shall be
			 no less than its pro rata share of the ten-year potential identified pursuant
			 to subsection (1) of this section.
(3) Each utility must document the
			 methodologies and inputs used in the development of its ten-year potential and
			 biennial target and must document that its ten-year potential and biennial
			 target are consistent with the requirements of
			 RCW
			    19.285.040(1). Each utility
			 must apply methodologies consistent with the most recently published regional
			 power plan using inputs that reasonably reflect the specific characteristics of
			 the utility and its customers and the general characteristics of the Pacific
			 Northwest power system.
(4) Each
			 utility must establish its ten-year potential and biennial target by action of
			 the utility's governing board, after public notice and opportunity for public
			 comment.
(5) The methodologies used
			 by the NWPCC in its most recently published regional power plan are summarized
			 in this subsection.
(a)
Technical
			 potential.
Determine the amount of conservation that is technically
			 feasible, considering measures and the number of these measures that could
			 physically be installed or implemented, without regard to achievability or
			 cost.
(b)
Achievable
			 technical potential.
Determine the amount of the conservation technical
			 potential that is available within the planning period, considering barriers to
			 market penetration and the rate at which savings could be acquired.
(c)
Economic achievable
			 potential.
Establish the economic achievable potential, which is the
			 conservation potential that is cost-effective, reliable, and feasible, by
			 comparing the total resource cost of conservation measures to the cost of other
			 resources available to meet expected demand for electricity and capacity. A
			 utility may use either of the following approaches to identify economic
			 achievable potential:
(i) Integrated
			 portfolio approach. A utility may analyze, as a part of its integrated resource
			 plan, the cost-effective potential of conservation resources over a range of
			 potential future outcomes for unknown variables, such as future demand, costs,
			 and resource availability. Economic achievable potential will be based on
			 resource plan that achieves a long-run least-cost and least-risk electric power
			 system considering all power system costs and quantifiable nonenergy costs and
			 benefits.
(ii) Benefit-cost ratio
			 approach. A utility may establish economic achievable potential as those
			 conservation measures or programs that pass a total resource cost test, in
			 which the ratio of total benefits to total costs is one or greater. The
			 benefit-cost calculation must use inputs that incorporate the cost of risks
			 that would otherwise be reflected in an integrated portfolio
			 approach.
(d)
Total resource cost.
In determining economic achievable potential
			 as provided in (c) of this subsection, perform a life-cycle cost analysis of
			 measures or programs to determine the net levelized cost, as described in this
			 subsection:
(i) Conduct a total resource cost
			 analysis that assesses all costs and all benefits of conservation measures
			 regardless of who pays the costs or receives the benefits;
(ii) Include the incremental savings and
			 incremental costs of measures and replacement measures where resources or
			 measures have different measure lifetimes;
(iii) Calculate the value of the energy saved
			 based on when it is saved. In performing this calculation, use time
			 differentiated avoided costs to conduct the analysis that determines the
			 financial value of energy saved through conservation;
(iv) Include the increase or decrease in
			 annual or periodic operations and maintenance costs due to conservation
			 measures;
(v) Include avoided
			 energy costs equal to a forecast of regional market prices, which represents
			 the cost of the next increment of available and reliable power supply available
			 to the utility for the life of the energy efficiency measures to which it is
			 compared;
(vi) Include deferred
			 capacity expansion benefits for transmission and distribution
			 systems;
(vii) Include deferred
			 generation benefits consistent with the contribution to system peak capacity of
			 the conservation measure;
(viii)
			 Include the social cost of carbon emissions from avoided nonconservation
			 resources;
(ix) Include a risk
			 mitigation credit to reflect the additional value of conservation, not
			 otherwise accounted for in other inputs, in reducing risk associated with costs
			 of avoided nonconservation resources;
(x) Include all nonenergy impacts that a
			 resource or measure may provide that can be quantified and monetized;
(xi) Include an estimate of program
			 administrative costs;
(xii) Include
			 the cost of financing measures using the capital costs of the entity that is
			 expected to pay for the measure;
(xiii) Discount future costs and benefits at
			 a discount rate equal to the discount rate used by the utility in evaluating
			 nonconservation resources; and
(xiv) Include a ten percent bonus for the
			 energy and capacity benefits of conservation measures as defined in
			 16 U.S.C. §
											839a of the Pacific Northwest Electric Power
			 Planning and Conservation Act.