With California IOU’s now required to implement third party programs and measure impacts using normalized metered energy consumption, or NMEC, there are many questions around how to do this in a way that effectively manages risks.
Right now, it appears that the IOU’s are poised to follow a precarious path, one where each third party program implementer embeds their own M&V analysis (i.e. calculates the savings for their own programs). As shown in Figure 1, this scenario unnecessarily increases the complexity, data security risks and costs, and limits control and standardization of the analysis. Each implementer, even if offering nearly similar program types, will bring different methods, different tools and wildly varying levels of experience in calculating and reporting savings. Furthermore, these factors will make the CPUC’s 3rd party evaluation process even more onerous, costly and contentious than it is today. All of this is is a potential recipe for disaster.
Figure 1: Increased complexity and risk when implementers control M&V
In today’s process for accounting for EE/DSM impacts, the evaluators create the “analysis of record.” In this potentially disastrous new scenario outlined above, the implementers will be expected to deliver the initial analysis of record, only to be superseded by the final CPUC evaluation effort. There are few analogies in the business world where either a company’s subcontracted vendors (i.e., implementers) or their external auditors (i.e., the 3rd party evaluators) have such an asymmetrical advantage of information, not to mention one where these external entities are leveraging the crown jewels of customer data – hour by hour energy usage (what business would not want to know how and when their customers use their products?)
However, NMEC offers a new path forward. One where the utilities create the very best set of “energy efficiency accounting books.”
In this new world, as shown in Figure 2, the utilities can create a centralized NMEC platform that utilizes their own customer usage data, incorporates the required project-specific tracking data embedded in the implementers delivery models, imports weather data, and can integrate any other data available that makes the results and feedback more actionable and valuable–enabling a transparent, standardized, and evaluation-grade NMEC analysis designed to withstand and streamline any third party scrutiny.
Figure 2: Decreased risks and increased effectiveness with a streamlined, centralized NMEC platform
This platform inherently will rely on a combination of software-based analysis tools and the professional judgement of staff or consultants, as NMEC analysis will vary by sector and program. However, the utility can deploy standardized methods and approaches, ensuring that the accounting is consistent across applicable implementers. For best practices, refer to Figure 3 below.
Figure 3: Risks and Best Practices of Implementer vs Utility Run M&V