Counting the Capacity that Didn’t Hatch: The Rate Mitigation Effect of DSM Programs
1. Counting the Capacity that Didn’t Hatch:
The Rate Mitigation Effect of DSM Programs
Jennifer Edwards & Nancy Lange*
MN Center for Energy & Environment
*MN Public Utilities Commission
Presented at the 2013 ACEEE National Conference on Energy Efficiency as a Resource
September 22-24, 2013 – Nashville, TN
2. Center for Energy and Environment
Non-profit based in Minneapolis, MN
Energy efficiency program and service provider
Energy and Home Improvement Financing
Building Science and Program Design Research
Minnesota Energy Policy
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3. Energy Efficiency as a BIG Resource
means…
A better understanding of the system
wide revenue benefits of DSM programs
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4. Minnesota DSM Case Study
Xcel Energy’s 20-year program history
Backward looking scenario analysis to compare
capacity options
Compare additional revenue requirements
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17. Scenario: Coal Plant Displacement
Gas
Operatio
n
19%
Coal
Capital
42%
Gas
Capital
18%
Coal
Operatio
n
19%
$4.89 billion
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Revenue Requirements
(¢/kWh)
Transmiss
ion
2%
0.90
0.80
0.70
0.60
0.50
0.40
0.30
0.20
0.10
0.00
DSM
Resource
Gas Only
0.78 ¢/kWh
Coal + Gas
23. Summary of Scenario Results
Revenue Requirements (¢/kWh)
0.90
0.78
0.80
0.66
0.70
0.71
0.68
0.60
0.53
0.50
0.40
0.30
0.24
0.20
0.10
0.00
DSM Resource
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Gas Only
Coal + Gas
New
Transmission
Lines
10-yr Measure 20-yr Measure
Life
Life
24. Summary
DSM programs allow customers to save on the energy
they do use, as well as the energy they don’t
System wide avoided revenue requirements are 3-4
times higher than DSM program costs
Includes total DSM costs, but only power plant costs
recovered during the 20-yr time frame
One specific example, but relevant for other DSM
programs, especially those just beginning.
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