| calculations, and state the
relief sought.
(B) A utility in an area in which customer choice is
not offered may petition the commission for authorization to use an
avoided cost of energy other than that otherwise determined according
to this paragraph. The avoided cost of energy may be based on peak
period energy prices in an energy market operated by a regional transmission
organization if the utility participates in that market and the prices
are reported publicly. If the utility does not participate in such
a market, the avoided cost of energy may be based on the expected
heat rate of the gas-turbine generating technology specified in this
subsection, multiplied by a publicly reported cost of natural gas.
(e) Annual energy efficiency goals.
(1) An electric utility shall administer a portfolio
of energy efficiency programs to acquire, at a minimum, the following:
(A) Beginning with the 2013 program year, until the
trigger described in subparagraph (B) of this paragraph is reached,
the utility shall acquire a 30% reduction of its annual growth in
demand of residential and commercial customers.
(B) If the demand reduction goal to be acquired by
a utility under subparagraph (A) of this paragraph is equivalent to
at least four-tenths of 1% of its summer weather-adjusted peak demand
for the combined residential and commercial customers for the previous
program year, the utility shall meet the energy efficiency goal described
in subparagraph (C) of this paragraph for each subsequent program
year.
(C) Once the trigger described in subparagraph (B)
of this paragraph is reached, the utility shall acquire four-tenths
of 1% of its summer weather-adjusted peak demand for the combined
residential and commercial customers for the previous program year.
(D) Except as adjusted in accordance with subsection
(u) of this section, a utility's demand reduction goal in any year
shall not be lower than its goal for the prior year, unless the commission
establishes a goal for a utility under paragraph (2) of this subsection.
(2) The commission may establish for a utility a lower
goal than the goal specified in paragraph (1) of this subsection,
a higher administrative spending cap than the cap specified under
subsection (g) of this section, or an EECRF greater than the cap specified
in §25.182(d)(7) of this title, if the utility demonstrates that
compliance with that goal, administrative spending cap, or EECRF cost
cap is not reasonably possible and that good cause supports the lower
goal, higher administrative spending cap, or higher EECRF cost cap.
To be eligible for a lower goal, higher administrative spending cap,
or a higher EECRF cost cap, the utility must request a good cause
exception as part of its EECRF application under §25.182 of this
title. If approved, the good cause exception is limited to the program
year associated with the EECRF application.
(3) Each utility's demand-reduction goal shall be calculated
as follows:
(A) Each year's historical demand for residential and
commercial customers shall be adjusted for weather fluctuations, using
weather data for the most recent ten years. The utility's growth in
residential and commercial demand is based on the average growth in
retail load in the Texas portion of the utility's service area, measured
at the utility's annual system peak. The utility shall calculate the
average growth rate for the prior five years.
(B) The demand goal for energy-efficiency savings for
a year under paragraph (1)(A) of this subsection is calculated by
applying the percentage goal to the average growth in peak demand,
calculated in accordance with subparagraph (A) of this paragraph.
The annual demand goal for energy efficiency savings under paragraph
(1)(C) of this subsection is calculated by applying the percentage
goal to the utility's summer weather-adjusted five-year average peak
demand for the combined residential and commercial customers. This
annual peak demand goal at the source is then converted to an equivalent
goal at the meter by applying reasonable line loss factors.
(C) A utility may submit for commission approval an
alternative method to calculate its growth in demand, for good cause.
(D) If a utility's prior five-year average load growth,
calculated under subparagraph (A) of this paragraph, is negative,
the utility shall use the demand reduction goal calculated using the
alternative method approved by the commission beginning with the 2013
program year or, if the commission has not approved an alternative
method, the utility shall use the previous year's demand reduction
goal.
(E) A utility shall not claim savings obtained from
energy efficiency measures funded through settlement orders or count
towards the bonus calculation any savings obtained from grant incentives
that have been awarded directly to the utility for energy efficiency
programs.
(F) Savings achieved through programs for hard-to-reach
customers shall be no less than 5.0% of the utility's total demand
reduction goal.
(G) Utilities may apply peak savings on a per project
basis to summer or winter peak, but not to both summer and winter
peaks.
(4) An electric utility shall administer a portfolio
of energy efficiency programs designed to meet an energy savings goal
calculated from its demand savings goal, using a 20% conservation
load factor.
(5) Electric utilities shall administer a portfolio
of energy efficiency programs to effectively and efficiently achieve
the goals set out in this section.
(A) Incentive payments may be made under standard offer
contracts, market transformation contracts, or as part of a self-delivered
program for energy savings and demand reductions. Each electric utility
shall establish standard incentive payments to achieve the objectives
of this section.
(B) Projects or measures under a standard offer, market
transformation, or self-delivered program are not eligible for incentive
payments or compensation if:
(i) A project would achieve demand or energy reduction
by eliminating an existing function, shutting down a facility or operation,
or would result in building vacancies or the re-location of existing
operations to a location outside of the area served by the utility
conducting the program, except for an appliance recycling program
consistent with this section.
(ii) A measure would be adopted even in the absence
of the energy efficiency service provider's proposed energy efficiency
project, except in special cases, such as hard-to-reach and weatherization
programs, or where free riders are accounted for using a net to gross
adjustment of the avoided costs, or another method that achieves the
same result.
(iii) A project results in negative environmental or
health effects, including effects that result from improper disposal
of equipment and materials.
(C) Ineligibility under subparagraph (B) of this paragraph
does not apply to standard offer, market transformation, and self-delivered
programs aimed at energy code adoption, implementation, compliance,
and enforcement under subsection (k) of this section, nor does it
preclude standard offer, market transformation, or self-delivered
programs promoting energy efficiency measures also required by energy
codes to the degree such codes do not achieve full compliance rates.
(D) A utility in an area in which customer choice is
not offered may achieve the goals of paragraphs (1) and (2) of this
subsection by:
(i) providing rebate or incentive funds directly to
eligible residential and commercial customers for programs implemented
under this section; or
(ii) developing, subject to commission approval, new
programs other than standard offer programs and market transformation
programs, to the extent that the new programs satisfy the same cost-effectiveness
standard as standard offer programs and market transformation programs
using the process outlined in subsection (q) of this section.
(E) For a utility in an area in which customer choice
is offered, the utility may achieve the goal of this section in rural
areas by providing rebate or incentive funds directly to customers
after demonstrating to the commission in a contested case hearing
that the goal requirement cannot be met through the implementation
of programs by retail electric providers or energy efficiency service
providers in the rural areas.
(f) Incentive payments. The incentive payments for
each customer class shall not exceed 100% of avoided cost, as determined
in accordance with this section. The incentive payments shall be set
by each utility with the objective of achieving its energy and demand
savings goals at the lowest reasonable cost per program. Different
incentive levels may be established for areas that have historically
been underserved by the utility's energy efficiency programs or for
other appropriate reasons. Utilities may adjust incentive payments
during the program year, but such adjustments must be clearly publicized
in the materials used by the utility to set out the program rules
and describe the programs to participating energy efficiency service
providers.
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