This year we’ve a lot of developments around M&V 2.0. Utilities like PSEG Long Island prove that M&V 2.0 software can provide accurate, early, and indicative information on program savings. What’s most exciting is the progress that’s been made on the regulatory front. Ever since the emergence of M&V 2.0, evaluation veterans have repeated the same mantra, “if the regulators care, the industry will follow.” Slowly but steadily, that has proven true in states across the country. As regulators have learned about the benefits of M&V 2.0 and the emerging technologies that can be used to enhance how energy efficiency is quantified, measured, and valued, they have begun to drive policies that encourage it. While California and New York are leading the charge, other states are now taking M&V 2.0 seriously too, making this an exciting year for the growth of continuous measurement. Here is the first part of our two-part series wrapping the 2016 regulatory updates around M&V 2.0, and what they mean for each state.
Missouri and New Mexico
One state that has taken an early interest in M&V 2.0 is Missouri. The state of Missouri is in the midst of developing a statewide technical resource manual (TRM) to support the evaluation, measurement and verification (EM&V) of the state’s utility energy efficiency programs and has recognized that updates could be made simpler with the use of M&V 2.0 tools. M&V 2.0 can provide a thorough billing analysis of single measure or multi-measure projects that can be used to develop savings values for the new TRM. It can also be used to calibrate existing savings estimates to ensure the values are accurately reflecting the experience of customers installing energy conservation measures. Most importantly, the stakeholders that will be responsible for the new TRM can know that the analysis from M&V 2.0 tools are being generated from in-state projects. Because of these benefits, the state is exploring how M&V 2.0 tools can be used to support the new TRM and will kick off that process in the near future.
Another state that recently signaled an interest in M&V 2.0 is New Mexico. In New Mexico, the state’s regulators oversee the procurement of M&V services on behalf of the utilities. That empowers the state’s Public Regulation Commission (PRC) to determine what M&V tools will best fit the state’s programs and budget requirements. This year, the state determined that M&V 2.0 could provide value for utility energy efficiency programs.The request for proposals released by the PRC stated that responses may include “modern measurement software for the purpose of reducing the costs associated with M&V and providing utilities with a faster performance feedback for the purpose of improving certain programs.”
Followers of energy regulation often point to CA as a leading state that is pushing policies to drive innovation and technology. In the field of M&V 2.0, this same cliche holds true. In California, the public utilities commission (CPUC) recently finalized a series of orders and approvals that pave the way for M&V 2.0 to support energy efficiency programs. Untangling all of these documents is complicated, but here are the highlights:
- The CPUC released an order outlining a process for “rolling portfolios,”to reduce the inconsistency of the three year planning process and provide for a smoother delivery of energy efficiency to Californians. As part of this new process, improving the pace of EM&V reports is necessary; without three year plans, the rolling portfolio will need regular EM&V updates. The CPUC recognized how M&V 2.0 can support this new model in the order by calling for “evaluation preparedness,” that includes “data collection strategies embedded in the design of the program…to ensure…near term feedback and internal performance analysis during deployment.”
August 2016: The CPUC followed up this decision with another order that established the use of “normalized metered energy consumption” for measuring energy savings for many California energy efficiency programs. Because M&V 2.0 tools measure energy savings at the meter, this new policy opens the door for an increased use of M&V 2.0 tools to estimate savings.
Coming in 2017: The CPUC put policy into action with the approval of a proposed PG&E pay-for-performance pilot program that will depend on a standardized M&V 2.0 approach to estimate savings for payments. The program, which is expected to launch in 2017, will use an M&V 2.0 tool to analyze and display savings data on a dashboard for the utility and market actors involved in the pilot. The analysis performed by the M&V 2.0 is still subject to final sign-off by the CPUC, but the initial approval to use an M&V 2.0 tool to calculate savings and make payments based on those savings estimates is a significant step for regulatory approval of M&V 2.0. The approval of PG&E’s pilot signals trust from regulators that M&V 2.0 tools can provide thorough and rigorous analysis.
Take a look at the second part of the 2016 regulatory update wrap-up where I talk about new developments in New York and other states.
By: Jake Oster, Sr. Director of Regulatory Affairs