Regulators are recognizing the benefits of M&V 2.0, are now developing policies that encourage utilities to incorporate it into their processed. In the last blog post, I discussed how Missouri, New Mexico, and California are embracing M&V 2.0 through advances in regulatory policy. In this part, I’ll take a look at New York and highlight other states to watch in 2017. Read the first part of the series here.
Like California, New York’s Public Service Commission has released a series of documents calling for the use of technology and innovation to modernize EM&V. In NY, this has all been in the Reforming the Energy Vision (REV) proceeding that is remaking the energy utility landscape in the state. As part of these efforts, the Commission is also modernizing how energy efficiency is quantified.
The Commission released the first policy order for REV in February 2015. Buried towards the end of hundreds of pages was an important sentence, “As REV recognizes the pace of technology and its ability to redefine our electric system, so too can advances in technology be used to challenge and enhance our traditional approach to EM&V.” This was a clear message for the industry and was built upon in May of 2016 when the Commission released an order on financial incentives for utilities under REV. This order established energy efficiency as an “earnings adjustment mechanism, or something that a financial incentive would based upon. In the order, the Commission made clear that “additional [energy efficiency] earnings opportunities may be tied to program specific savings tied…to efficiency achievements that exceed minimum program targets….,” and that “Any earning adjustments related to net savings should be tied to advances in Evaluation, Measurement and Verification (EM&V) that utilize direct customer information.” This clearly signaled that the Commission was encouraging M&V 2.0 as a critical tool for estimating and valuing energy savings and a foundational tool for the future of energy efficiency.
The NY Commission followed the order with more detailed instructions. Last month, the Commission released a document outlining EM&V Guidance with a section dedicated to encouraging and explaining “Advanced M&V.” It also explains how the costs of M&V 2.0 tools that support program implementation and evaluation can be shared across budgets for implementation and evaluation. Most importantly, it makes clear how NY can reduce evaluation costs by using trusted M&V 2.0 tools to estimate savings that can be reported to the Commission in lieu of full evaluations.
Last, but certainly not least, the nutmeg state is diving head first into the field of M&V 2.0. Connecticut is not just working on M&V 2.0, it is seeking to lead the nation in the field and plans to launch pilots that will serve as public demonstrations of the technology. In August, the CT Department of Energy and Environmental Protection announced the receipt of a grant from the U.S. Department of Energy to pilot M&V 2.0 in partnership with Lawrence Berkeley National Lab and the Northeast Energy Efficiency Partnerships (NEEP). The grant will explore M&V 2.0 for both the commercial and residential sectors. The goal of the grant is to explore how M&V 2.0 compares to traditional M&V, how to scale M&V 2.0., application of standardized methods and reporting for M&V 2.0 and, working with other states, including Rhode Island, New Hampshire, Vermont, Delaware and Washington D.C. to support the project, how to increase the “use of M&V 2.0 to support EM&V”.
To prepare for the pilots, NEEP held two planning workshops throughout 2016 with regulators, utilities, stakeholders and experts. Those workshops outlined how best to proceed with with the pilots so that valuable and actionable information from the pilots could serve the industry. The project kicks off in 2017 and is poised to provide valuable information for other states to follow.
M&V 2.0’s next state…
It’s clear that state regulators are taking M&V 2.0 seriously. In Virginia, Washington and Oregon there have been day-long workshops focused on M&V 2.0 or pay-for-performance programs that will require M&V 2.0.
Regulators are paying attention. The policy is moving the industry forward, and at the same time the industry is moving the policy forward. Policy moves slowly, but with strong momentum, we can expect other states to follow suit and make 2017 the year for M&V 2.0.
By: Jake Oster, Sr. Director of Regulatory Affairs