7 Del. Admin. Code § 2105-6.0

Current through Reigster Vol. 28, No. 6, December 1, 2024

Section 2105-6.0 - Evaluation Requirements

6.1 Reporting

6.1.1 EM&V reports shall provide an assessment of EM&V activities completed in a manner that is consistent with these regulations.

6.1.2 Each PA shall provide the EEAC with a final report for each completed evaluation study.

6.1.2.1 Evaluation study final reports shall present the results of the study in a clear, concise manner. They should include, at a minimum, the following components:

6.1.2.1.1 Cover;

6.1.2.1.2 Title Page;

6.1.2.1.3 Abstract;

6.1.2.1.4 Table of Contents;

6.1.2.1.5 Executive Summary (including impact findings and process recommendations as specified further in subsection 6.1.2.3 of the EM&V Regulation);

6.1.2.1.6 Introduction and purpose of the study;

6.1.2.1.7 Description of programs covered in study (markets, measures, and customers included);

6.1.2.1.8 Study methodology;

6.1.2.1.9 Assessment of the reliability of study findings;

6.1.2.1.10 Detailed study findings (impact and process evaluation);

6.1.2.1.11 Recommendations for program changes and future studies, and

6.1.2.1.12 For impact studies, ex-post cost-effectiveness results.

6.1.2.2 The timeline for each study will be unique, described in the Three-Year EM&V Plan, and be subject to change consistent with the work plan of the IEC(s) engaged for each particular activity. The timeline should, whenever possible, meet the needs of the PAs, EEAC, and any relevant PJM market compliance cycles.

6.1.2.3 The following information, when applicable, shall be included in a table format or bullet list within both the Executive Summary of the evaluation report 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.

6.1.2.3.1 Energy Impact

6.1.2.3.1.1 Program and portfolio level first year annualized gross and net energy impacts

6.1.2.3.1.2 Program and portfolio level gross and net lifecycle energy impacts

6.1.2.3.1.3 For electric programs, program and portfolio level gross and net coincident peak kW

6.1.2.3.1.4 Program NTG ratios and estimated components

6.1.2.3.1.5 Program and portfolio level first year annualized gross original PA-tracked ex-ante savings

6.1.2.3.1.6 Program and portfolio level first year annualized gross realization rates

6.1.2.3.1.7 Program and portfolio level impact goals

6.1.2.3.1.8 Program and portfolio level achievement as a percentage of goal, based on ex-post evaluation results

6.1.2.3.1.9 Program and portfolio level calculated benefit-cost results based on ex-post evaluation net savings

6.1.2.3.2 Process Evaluation

6.1.2.3.2.1 Key findings from the process evaluation

6.1.2.3.2.2 Summary of recommendations made by the evaluation team

6.1.2.3.3 Market Effects

6.1.2.3.3.1 Timeline describing years covered by the reported effects

6.1.2.3.3.2 Key findings from the market effects evaluation aligning with priorities identified by the EEAC.

6.1.2.3.3.3 Estimated annual and lifecycle net energy savings estimated from market effects (per technology, technology class, or market sector as appropriate)

6.1.2.3.3.4 Listing of major technologies and/or practices affected by market effects

6.1.3 An annual summary of evaluation results shall be prepared by DNREC to summarize the key findings of all studies conducted in a program or calendar year, in order to provide the EEAC with a consolidated list of findings and recommendations to facilitate discussions of program refinements, evolution, and the next three-year program cycle.

6.1.4 Each PA shall prepare and submit to the EEAC a Biannual Program Snapshot that presents information regarding the progress of the PA's efficiency programs.

6.1.4.1 The Biannual Snapshot should include data tables presenting key information regarding the progress of efficiency programs as compared to planned savings and budgeted expenditures. For each program a clearly labeled table should present the following data points, both the projected annual value or budget and the actual year-to-date value, on an ex-ante basis:

6.1.4.1.1 Number of projects

6.1.4.1.2 Electric energy savings (kWh)

6.1.4.1.3 Electric peak demand savings (kW)

6.1.4.1.4 Natural gas savings (therms)

6.1.4.1.5 Savings from equivalent energy efficiency measures

6.1.4.1.6 Program expenditures

6.1.4.2 The Biannual Snapshots should be prepared for presentation to the EEAC in August (for the first half of program year) and February (for the second half of program year).

6.1.5 Each PA shall submit an Annual Program Reconciliation Report to the EEAC highlighting findings from the past program year.

6.1.5.1 The Annual Reconciliation Report is a critical output of the EM&V process. It links together all information and accounting for each efficiency program, demonstrates that savings are accurately reported, and presents the results of cost-effectiveness analysis

6.1.5.2 The report shall be submitted by the end of the 1st quarter after the close of the program year, and should include all completed reports and results that were not included in any previous annual report. It should include the following information.

6.1.5.2.1 A summary of EM&V activities completed in a manner that is consistent with these regulations and with EM&V Plans approved by the EEAC.

6.1.5.2.2 A summary of process evaluation findings, as appropriate by program.

6.1.5.2.3 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 Mid-Atlantic TRM, and indicate these are unevaluated results.

6.1.5.2.4 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.

6.2 Benefit-Cost Analysis

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.

6.2.2 Cost-Effectiveness Test

6.2.2.1 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:

Benefit-Cost Ratio = Benefits / Costs, where:

Benefits = Net Present Value of (Avoided Supply Costs + Other Benefits)

Costs = Net Present Value of (Participant Costs + Utility Costs - Federal Tax Credits)

6.2.2.2 The costs are the total costs of the program, whether incurred by participants or Program Administrators. Costs include:

6.2.2.2.1 equipment and installation costs (but only those that are incremental to baseline costs);

6.2.2.2.2 increases (or decreases) in operation and maintenance costs;

6.2.2.2.3 cost of removal (less salvage value);

6.2.2.2.4 administrative costs directly attributable to the programs, and

6.2.2.2.5 costs for EM&V activities, utility performance incentives, and Federal tax credits (as a reduction in cost).

6.2.2.3 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:

6.2.2.3.1 avoided electric supply costs, based on energy costs in the respective zone of the PJM Regional Transmission Organization;

6.2.2.3.2 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;

6.2.2.3.3 reduced SREC and RECs requirements;

6.2.2.3.4 avoided gas supply and delivery costs;

6.2.2.3.5 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);

6.2.2.3.6 Avoided costs of energy savings in fuels other than electricity and natural gas, or from equivalent energy efficiency measures, such as reduction in delivered heating fuel resulting from improvements in the building envelope or other systems; and

6.2.2.3.7 avoided environmental compliance costs, where such costs can be directly tied to changes in energy use.

6.2.2.4 The benefits shall be calculated using net savings.

6.2.3 To set a standard that allows TRC tests conducted on Delaware's energy efficiency programs and portfolio to be comparable, the following guidance shall be followed.

6.2.3.1 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.

6.2.3.2 Discount Rates - The discount rate used in energy efficiency and demand reduction cost-effectiveness tests shall be 4.0% on a real basis.

6.2.3.3 EUL - Measures installed via Delaware's energy efficiency programs shall have their energy savings counted and valued over the full EUL of the installed measures.

6.2.3.4 With the exception of program-specific data, inputs to cost-effectiveness tests shall not be different for different programs.

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.

6.2.4.1 Portfolio plans shall include projected customer rate and bill impacts over the three-year program for each customer class.

6.2.5 EEAC Responsibilities for Benefit-Cost Analysis

6.2.5.1 Develop or approve energy savings forecasts, avoided costs, line losses, and/or other major inputs to the benefit-cost analysis.

6.2.5.2 Monitor that Program Administrators are following the benefit-cost approaches as outlined in these regulations.

6.2.5.3 Review and approve program and portfolio level benefit-cost analysis completed by Program Administrators and/or IECs on energy efficiency portfolios and programs.

6.2.5.4 Coordinate with the PSC and the Public Advocate to provide advice on benefit-cost metrics, metric values, and calculation approaches.

6.2.6 Program Administrator Responsibility for Benefit-Cost Analysis

6.2.6.1 Develop estimates of avoided costs and line losses, for review, discussion and approval by the EEAC.

6.2.6.2 Perform benefit-cost analysis for energy efficiency measures, programs and portfolios for planning purposes using Mid-Atlantic TRM values and best available information as appropriate.

6.2.6.3 For programs evaluated by an IEC, 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.

6.2.6.4 Report planned and ex-post benefit-cost calculation results to EEAC.

6.2.6.5 Provide data and benefit-cost analyses models to the EEAC for review, if requested

6.3 Energy Impact Baseline

6.3.1 Prescriptive Measures

6.3.1.1 The baseline used for prescriptive measures shall be established in the Mid-Atlantic TRM. Baselines for prescriptive measures shall follow the approaches outlined below.

6.3.1.2 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 Mid-Atlantic TRM shall use one of the following approaches to establish deemed baselines, unless specified in the Mid-Atlantic 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

6.3.1.3 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 6.3.1.2 and applied to the remaining useful life.

6.3.2 Custom Measures

6.3.2.1 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.

6.3.3 EEAC Responsibilities for Energy Impact Baseline

6.3.3.1 Provide guidance to IECs and PAs regarding appropriate baseline approaches, assumptions and estimations.

6.3.3.2 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.

6.3.3.3 Work to resolve any disagreements between the IECs and PAs, or other stakeholders, regarding baseline assumptions.

6.3.3.4 Approve any IEC suggested deviations from the required approach for setting baseline conditions if properly justified and explained.

6.3.4 Program Administrator Responsibilities for Energy Impact Baseline

6.3.4.1 Provide guidance to IECs on program baseline assumptions.

6.3.4.2 Develop, in coordination with the IECs, custom baseline assumptions on a project-specific basis to support calculations of custom project gross savings.

6.4 Application of Savings

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 net-to-gross (NTG) ratios determined as described in subsection 6.4.3.1 to yield an ex-post, verified net savings value.

6.4.2 Gross savings will be calculated using the Mid-Atlantic TRM where applicable. For measures not included in the Mid-Atlantic TRM, gross savings will be calculated by other appropriate methods.

6.4.2.1 Gross savings do not account for the effects of free riders, spill over or market effects on the total program savings.

6.4.2.2 For deemed savings, ex-post savings shall be verified by the IEC and may reflect installation rate, quantity, and adjustments for errors in data collection.

6.4.2.3 Custom projects shall require engineering, metering, or other evaluation estimates that will be applied retroactively.

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.

6.4.3.1 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.

6.4.3.2 Estimated net-to-gross assumptions used in portfolio planning analyses shall be included with the portfolio plan submitted to EEAC.

6.4.4 Retroactive vs. prospective savings calculation

6.4.4.1 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.

6.4.4.2 Changes to deemed savings assumptions shall be coordinated through the annual process of updating the Mid-Atlantic TRM.

6.4.5 Transmission and Distribution Losses

6.4.5.1 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.

6.4.6 EEAC Responsibilities for Savings Calculations

6.4.6.1 The EEAC shall develop or approve gross savings analyses completed by IECs on energy efficiency portfolios and programs.

6.4.6.2 The EEAC shall coordinate with the DNREC to provide updates to the Mid-Atlantic TRM so that savings used in Delaware reflect the most recent information available, including information gathered through program EM&V completed in Delaware.

6.4.6.3 The EEAC shall review and approve Program Administrator assumptions regarding savings attributable to avoided transmission and distribution system losses.

6.4.6.4 The EEAC shall reach consensus on all forward looking NTG ratios to apply to the following year.

6.4.7 PA Responsibilities for Savings Calculations

6.4.7.1 The PAs shall coordinate with the DNREC and the EEAC to provide advice on benefit-cost metrics, metric values, and calculation approaches.

6.4.8 IEC Responsibilities for Savings Calculation

6.4.8.1 The IEC shall provide to the EEAC all EM&V reports. Reports shall include, as a minimum, evaluated gross and net savings for each program.

6.4.8.2 The IEC shall advise the EEAC, as requested, on issues related to reaching consensus on NTG ratios for each program.

7 Del. Admin. Code § 2105-6.0

22 DE Reg. 514 (12/1/2018) (Final)