---------- Forwarded message ----------
From: Ned Ford <Ned.Ford@fuse.net>
Date: Sun, Oct 26, 2014 at 5:53 PM
Subject: [GW-ACT-LEADERS] Fwd: Efficiency Benefits - Getting it right!
To: CONS-SPST-GLOBALWARM-CHAIRS@lists.sierraclub.org


The following message is one I sent to a list which is dedicated to Ohio utility issues.  The attached Excel sheet contains the cover memo, and all the data which is used to generate the statements below.

I thought it would be good to share with the people on these lists because some of you may be very interested to know what efficiency does, and some of you may be interested in how I produce the statistics.

Some of you may be interested in how well efficiency pays for renewables.  Ohio ranked 18th for utility efficiency programs in the ACEEE's last ranking, but we have slid backwards since then, and are probably slightly below the middle of the pack for the entire five years covered here.

We need a lot more attention to efficiency, and especially to bringing all states up to the level of the best five or six states. Recognize that the best states for efficiency are also the most healthy economies, and the larger states in terms of electricity consumption.

- Ned

Ned Ford
513-600-4200


Hi Folks,

It is now seven months before we will have 2014 EE program costs and first year energy savings in the official filings by the utilities. I hope we can avoid the use of incorrect cost and savings data which occurred last year, by getting this out in time for everyone to consider, discuss and agree on what we need to use.

If anyone on this list is inclined to think that another account might be more accurate, please bring it to my attention (offlist, preferably) so we can discuss the different methodologies and reach an agreement on what is what.

The numbers which I use are those which the utilities actually filed.  Other estimates have not used these numbers.  If they had, they would have reached the same values that I did.  We have two objectives here, both served by the same information:   first, to reconcile the actual cost of efficiency with numbers which the PUCO has provided to the legislature (and can be counted on to reiterate in the future) ($1 billion to $1.1 billion in total costs through 2013), and second, to provide evidence of the tremendous value which SB 221 provides to Ohio, and which FirstEnergy customers are going to lose as a result of SB 310.

The attached spreadsheet provides details of Ohio’s efficiency spending and saved energy from 2009 through 2013.

Total spending through the end of 2013 has been $667 million.

An additional $300 million or so has been recovered by the four Ohio Electric Distribution Companies (AEP, DP&L, Duke and FirstEnergy) to compensate for Distribution lost revenues and Shared Savings.  This is a reasonable amount, but the PUCO has not accounted for this recovery in any public forum, so the precise amount is not known yet.

The PUCO does not require lifetime savings calculations, although all the utilities do them, and some of them report these savings. The PUCO does require first year savings to be reported, and we have made a conservative but reasonable projection of the savings to reach the conclusions as follows:

Retail rate savings realize by the end of 2013 were $1.4 billion
Lifetime retail savings to be realized by the installed hardware will be $3.9 billion

This does not consider the increased savings which will result from increased rates due to other reasons.

(Although it was stated during hearings that "energy" prices in Ohio have gone down due to fracking, electricity prices have risen (see Background and Discussion tab on the attached spreadsheet).

Efficiency savings to date are large enough to cover the entire cost of the efficiency programs to date, plus the shared savings, plus the lost revenues and in addition, cover the cost of Ohio’s renewables standard, which was reported by the PUCO as:

2011  $44.7 million (1%)*
2012  $52.4 million (1.5%)*

The PUCO has not reported the cost of the renewable standard in other years, but given the rapidly falling price of renewable energy credits, the 2014 cost is likely to be only $2 million more than 2012, even though the standard has increased to 2.5% (a 66% increase over 2012).

Efficiency savings already realized will continue to save more money than combined program costs, lost revenues, shared savings and renewables, unless efficiency programs are cut.

In addition to the direct savings from efficiency, there are real savings due to avoided new power plants and transmission and distribution systems.  A conservative estimate of these savings as of year-end 2013 is over $1 billion.  This represents more than 500 MW’s of avoided new generation technology and the transmission and distribution equipment that is also avoided.

*  The calculation of renewable program costs given above is done from PUCO reports.  The calculations are not on this spreadsheet.

Contact me at

Ned Ford
513-600-4200
or Ned.Ford@fuse.net




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