| (d) Cost-effectiveness standard. An energy efficiency
program is deemed to be cost-effective if the cost of the program
to the utility is less than or equal to the benefits of the program.
Utilities are encouraged to achieve demand reduction and energy savings
through a portfolio of cost-effective programs that exceed each utility's
energy efficiency goals while staying within the cost caps established
in §25.182(d)(7) of this title.
(1) The cost of a program includes the cost of incentives,
EM&V contractor costs, any shareholder bonus awarded to the utility,
and actual or allocated research and development and administrative
costs. The benefits of the program consist of the value of the demand
reductions and energy savings, measured in accordance with the avoided
costs prescribed in this subsection. The present value of the program
benefits shall be calculated over the projected life of the measures
installed or implemented under the program.
(2) The avoided cost of capacity shall be established
in accordance with this paragraph.
(A) By November 1 of each year, commission staff shall
file the avoided cost of capacity for the upcoming year, including
supporting data, in the commission's central records under the control
number for the energy efficiency implementation project.
(i) Staff shall calculate the avoided cost of capacity
from the base overnight cost using the lower of a new conventional
combustion turbine or a new advanced combustion turbine, as reported
by the United States Department of Energy's Energy Information Administration's
(EIA) Cost and Performance Characteristics of New Central Station
Electricity Generating Technologies associated with EIA's Annual Energy
Outlook. If EIA cost data that reflects current conditions in the
industry does not exist, staff may establish an avoided cost of capacity
using another data source.
(ii) If the EIA base overnight cost of a new conventional
or an advanced combustion turbine, whichever is lower, is less than
$700 per kW, the avoided cost of capacity shall be $80 per kW-year.
If the base overnight cost of a new conventional or advanced combustion
turbine, whichever is lower, is at or between $700 and $1,000 per
kW, the avoided cost of capacity shall be $100 per kW-year. If the
base overnight cost of a new conventional or advanced combustion turbine,
whichever is lower, is greater than $1,000 per kW, the avoided cost
of capacity shall be $120 per kW-year.
(iii) The avoided cost of capacity calculated by staff
may be challenged only by the filing of a petition within 45 days
of the date the avoided cost of capacity is filed in the commission's
central records under the control number for the energy efficiency
implementation project described by paragraph (2)(A) of this subsection.
The petition must clearly describe the reasons commission's staff's
avoided cost calculation is incorrect, include supporting data and
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 capacity different from the avoided cost determined
according to subparagraph (A) of this paragraph by filing a petition
no later than 45 days after the date the avoided cost of capacity
calculated by staff is filed in the commission's central records under
the control number for the energy efficiency implementation project
described by paragraph (2)(A) of this subsection. The petition must
clearly describe the reasons a different avoided cost should be used,
include supporting data and calculations, and state the relief sought.
The avoided cost of capacity proposed by the utility shall be based
on a generating resource or purchase in the utility's resource acquisition
plan and the terms of the purchase or the cost of the resource shall
be disclosed in the filing.
(3) The avoided cost of energy shall be established
in accordance with this paragraph.
(A) By November 1 of each year, ERCOT shall file the
avoided cost of energy for the upcoming year for the ERCOT region,
as defined in §25.5(48) of this title (relating to Definitions),
in the commission's central records under the control number for the
energy efficiency implementation project. ERCOT shall calculate the
avoided cost of energy by determining the load-weighted average of
the competitive load zone settlement point prices for the peak periods
covering the two previous winter and summer peaks. The avoided cost
of energy calculated by ERCOT may be challenged only by the filing
of a petition within 45 days of the date the avoided cost of capacity
is filed by ERCOT in the commission's central records under the control
number for the energy efficiency implementation project described
by paragraph (2)(A) of this subsection. The petition must clearly
describe the reasons ERCOT's avoided cost of energy calculation is
incorrect, include supporting data and 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.
Cont'd... |
