Measuring and Evaluating Energy Efficiency

Are air duct inspections a cost-effective energy efficiency measure? How do we even know?

Are air duct inspections a cost-effective energy efficiency measure? How do we even know?

Virginia’s investor-owned gas and electric utilities administer 38 programs between them that are designed to increase energy efficiency or shift consumption away from periods of peak demand. The question periodically arises: Are these programs worthwhile? Do they save rate payers money?

Those are questions that most Virginians can readily understand. But getting answers isn’t so easy.

The answers depend on how one goes about evaluating, measuring and verifying the programs (a set of issues referred to in the biz as EM&V). How does one calculate the “Levelized Cost of Saved Energy” (the present value per kilowatt-hour of an energy-efficiency program over its economic life)? How does one construct the Total Resource Cost Test (an indicator of total program costs, including those of ratepayers and utilities)? What is the methodology behind the Ratepayer Impact Measure Test (known as the RIM test, which ascertains the impact of energy-efficiency measures on gas and electric rates)?

For the layman, these arcane issues “surpasseth all understanding,” to borrow a phrase from Philippians. But Virginians can take some comfort in the fact that the SCC is on top of the job. Earlier this year, the commission held a hearing attended by 20 interested persons and entities (whose comments were supplemented by 23 written submissions) to discuss how the energy-efficiency programs should be evaluated.

After deliberating on these matters of great complexity and subtlety, the SCC issued a report today finding that the system can be fine-tuned. Accordingly the commission has directed its staff to draft proposed rules to be considered in a future proceeding.

Wrote the commissioners:

The goal of the proposed Rules is to achieve, to the extent, possible, reliable and consistent estimation of energy savings and related impacts at a reasonable and appropriate cost; to provide guidance to utilities in planning and offering energy efficiency programs, and to provide a transparent basis for assessing cost-effectiveness of proposed programs.

One issue I found interesting (mainly because I found it comprehensible, unlike much of the report) is how to estimate kilowatt-hours of electricity saved. Most approaches rely upon Technical Resource Manuals (TRMs) that provide “deemed values,” or industry assumptions derived from professional judgment and engineering calculations — not from direct measurement. The problem is that industry averages may not apply to Virginia. Opines the SCC: “These estimates can introduce considerable inaccuracy into estimates of  energy savings.”

Therefore, the commission declared that estimates of kilowatt or kilowatt-hour savings “should be, where possible, based upon Virginia-specific data so as to reflect as closely as possible the actual savings achieved.”

The hoped-for benefit: If your utility offers an air duct-testing program, an appliance-recycling program, or rebates on Wi-Fi programmable thermostats, the SCC has thoroughly vetted them as cost-effective.