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Outline of EEB Consultant Slides

This draft document outlines the recommendations and key topics for board discussion on cost-effectiveness and avoided costs in the C&LM programs. It includes perspectives, impacts, and potential cost-effectiveness tests for consideration.

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Outline of EEB Consultant Slides

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  1. Cost-Effectiveness for C&LM:EEB Recommendations (Draft)and Board DiscussionFacilitated by EEB ConsultantsFebruary 13, 2019

  2. Outline of EEB Consultant Slides • Background on cost-effectiveness and avoided costs (based on earlier presentations to EEB) • Two slides from prior DEEP presentation/public mtg • Impacts, benefits, and avoided costs • Some potential cost-effectiveness tests for CT • Key topics and issues for Board consideration and discussion • Draft recommendations for Board discussion and consideration today (which, if acted on, would become Board comments to DEEP) 2

  3. Avoided Energy Costs (Benefits) Program Costs + Incentives UCT = Natural Gas Benefits • Natural Gas • Price Effects (DRIPE) • Oil and Propane (MUCT) Electric Benefits • Energy • Transmission • Distribution • Capacity • Price Effects (DRIPE) • Oil and Propane (MUCT) Savings x Avoided Cost Values = Benefits (in $) 3

  4. DEEP Slide, Public Meeting, 11/15/18

  5. Examples of benefits that could be considered for Resource Value Test DEEP Slide, Summary to EEB, 12/12/18

  6. Key Topics and Issues for Board Discussion • Perspective and scope • Utility system based on ratepayer impacts; total resource system (including program participant impacts); resource value based on state policies; other? • Scope of energy fuel impacts (electric, gas, oil, propane) • Symmetry between benefits and costs (for any test) • Impacts that affect utility ratepayers or that would be paid by utility ratepayers in absence of C&LM • Participant impacts (both benefits and costs) • Non-energy impacts on CT residents and businesses

  7. Perspectives Perspectives in first three columns are currently used in CT, to some extent, with UCT and MUCT being the primary cost-effectiveness tests.

  8. What Drives Consideration of a Different Cost-Effectiveness Test? Four decisions below, with the base case in each decision being to retain the current CT cost-effectiveness tests and current application/practice. • Consider impacts that affect utility ratepayers or that would be paid by utility ratepayers in the absence of C&LM programs. • Consider participating customer impacts (include participant benefits and costs symmetrically). (TRC) • Consider other relevant state policies. • Consider other resources and strategies (DERs, storage, solar, etc.) that DEEP may want to consider under one test for all state policies.

  9. One Potential Flow of Decisions for CT

  10. Draft Board Recommendations • Cost-effectiveness perspective Continue to apply utility system perspective for C&LM • Scope of energy fuel impacts (electric, gas, oil, propane) Continue to account for the costs and benefits associated with all fuels being addressed by C&LM programs, in the multi-fuel Modified Utility Cost Test (MUCT) • Symmetry between benefits and costs Support symmetry regarding the inclusion of benefits and costs (as is done for multiple fuels in the MUCT)

  11. Draft Board Recommendations (con’t) • Impacts that affect utility ratepayers or that would be paid by utility ratepayers in absence of C&LM - Include all significant utility ratepayer impacts - Include avoided costs of compliance with GWSA • Participant impacts (both benefits and costs) a. Do not include other participant impacts (no TRC) b. [Alternative] Include other participant impacts (TRC) • Non-energy impacts on CT residents and businesses a. Do not include non-energy impacts on CT b. [Alternative] Include non-energy impacts on CT

  12. Utility system (ratepayer) avoided costs of GWSA/greenhouse gas (GHG) reductions • Conservation & Load Management (C&LM Programs) • Less expensive for utility ratepayers • Helps customers to reduce their energy costs • Other strategies used to comply with GWSA goals and reduce GHG emissions • More expensive for utility ratepayers • Offshore wind as marginal strategy <- OR ->

  13. Two AESC options for utility system avoided costs of GWSA/greenhouse gas (GHG) reductions • Using the regional GHG marginal abatement cost • Using the average of utility system GHG strategies

  14. Guiding principles from National Std Practice Manual

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