The Arizona corporation’s commission approved the latest TEP on November 10, about three months after denying the company’s request to refund more than $12 million in unspent funds from customer surcharges that support energy efficiency programs.
Instead, the committee ordered TEP back with a plan to use the money for expanded programmes.
TEP was operating under an energy efficiency plan approved in 2019, to meet the commission’s mandate that state-regulated energy companies achieve energy savings of up to 22% by 2020.
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“The modernization and, dare I say, modernization of our software will be very beneficial for our customers, as we will be adding 21 new measures and increasing our portfolio to have a greater impact in reducing (energy demand) its peak,” TEP Vice President, Dallas Dukes Committee said before approving the plan.
Under TEP’s new Demand Side Management Implementation Plan, proposed by TEP and amended by the authority’s facilities staff, TEP has a program budget of approximately $23.8 million for 2022 and 2023, up from a previous annual budget of $22.9 million. The company is also in line with the Performance Incentive of approximately $988,000 to comply with the rules.
But the additional cost that TEP customers pay to subsidize energy efficiency programs will not change from the current rate of about 0.3 cents per kilowatt-hour, which works out to about $2.30 per month for the average home customer.
TEP proposed an increase in those surcharges, but the Foundation Committee at its November 10 open meeting adopted an amendment from Commissioner Jim O’Connor to use about $800,000 in previously unspent funding to keep the surcharge unchanged.
The TEP plan, as amended, passed in a 4-1 vote, with Commissioner Justin Olson voting against it on the grounds that current measures of the program’s performance fail to measure the true cost impact on ratepayers.
Consumer and environmental nonprofit groups that have pushed for more energy efficiency programs applauded the commission’s approval of the TEP, as well as a similar plan approved for Arizona Public Service Co.
“The commission’s vote to broaden and broaden energy efficiency offerings shows it understands that programs are a smart investment,” said Diane Brown, executive director of the Education Fund for the Arizona Public Interest Research Group.
Brown said that over the past decade, for every $1 of percentage payer money invested in energy efficiency programs, about $3.69 in total benefits has been returned to percentage payers.
“Energy efficiency programs provide certainty to businesses and financial benefits to taxpayers,” Brown said in a joint statement of support with the Energy Efficiency Project of the Southwest and Wildfire, an anti-poverty group.
Addition and Subtraction
Under the approved plan, TEP will strengthen several residential and commercial energy efficiency incentive programs—some of which have been introduced since 2008—and add several new programs and eliminate several programs that are not considered cost-effective.
The TEP-approved commission plan includes an Enhanced Program for Schools and higher rebate amounts for many programs, while giving the facility some flexibility to adjust incentive levels in some programs and moving up to 50% of funding between programs or customer segments as needed to tap unused funds.
All energy efficiency rebate programs are subject to a cost-benefit analysis based on potential savings, and DEWA staff have rejected many programs that were not considered cost-effective.
Those programs included a program that offered discounts on “advanced power strips,” making it easier to turn off standby power consumed by devices such as televisions, which TEP had asked permission to give up because it was not cost-effective.
Among the residential programs, proposed rebates for induction cooktops were rejected by commission staff on the grounds that they would not provide net cost benefits.
TEP is also realigning some programs, formalizing and improving an energy efficiency pilot program for schools, adding pilot programs for “advanced rooftop controls,” which boost building efficiency, and improved pilot load management programs that include things like thermal storage using customer heaters. Water and connected thermostats that TEP can control to help reduce peak demand.
The company is also promoting incentives for new construction and multi-family housing.
Here is a look at some of the program tweaks and new measures:
TEP is already offering discounts of up to $900 for replacing an old home HVAC unit with an Energy Star-rated heat pump, as well as discounts for things including duct seals, air conditioner tuning, efficient pool pumps, smart thermostats, shade trees and water heaters.
According to the plan approved by the organizers:
In 2022, all smart thermostats offered under TEP’s rebate program will be “demand response enabled,” allowing customers to voluntarily participate in a “load management” program that allows utilities to adjust thermostats for customers as needed to reduce periods of peak demand, in exchange for an incentive. $40 annual that can be increased to $80.
The rebate program for Energy Star rated high-efficiency heat pump water heaters is suspended as a standalone program and will be offered as part of the load management program.
TEP plans to offer a “virtual inspection” service for home energy audits that offers similar benefits to an in-person audit, using a mobile app with interactive video.
Under a new procedure, custom HVAC installations including space heating and cooling technologies that make economic sense and may qualify for rebates of up to $5,000 per home (up to 75% of cost or 85% to qualify customers with low income).
TEP will offer new discounts for attic insulation and air sealing to encourage homeowners to upgrade to R43-rated insulation (75%/85%).
TEP will introduce a new, comprehensive whole-building measure for multi-family properties, combining previously approved measures with other efficiency improvements into a single energy-saving formula paid on a per kWh basis, discounting up to 75% of costs or 85% for buildings inhabited by customers with disabilities. Low to middle income.
Building a new home
For the first time, TEP will include manufactured homes that meet federal Energy Star efficiency standards in the New Home Construction Rebate Program.
The tool will also add a 75% discount for each connected smart thermostat and offer a “guiding path” that offers discounts of $200 per condo as well as discounts for electric water heaters.
TEP limits its discounted shade tree program to three five-gallon trees a year, and wants the ability to limit that to as few as three to serve more customers (domestic customers pay $5 per five-gallon tree; non-residential customers pay $10 per five-gallon tree). tree.five-gallon tree or $25 per 15-gallon tree).
Trade discount programs
TEP plans to continue its commercial and industrial energy efficiency rebate program, called EasySave Plus, but with the current cap of $600,000 per project, the tool has also limited any individual customer’s rebate to 25% of the total program budget.
The company also won approval for a simplified discount process for commercial projects with a value of less than $10,000 that follow a defined qualification process.
Three new commercial discount programs have been approved, comprising new discounts for small ductless heat pumps, indoor agricultural dehumidifiers and projects to replace existing T8 fluorescent tube and ballast lighting with more efficient LED panels, which are already eligible for discounts under TEP’s direct product support .
Meanwhile, TEP dropped a host of commercial energy efficiency measures, including rebates for commercial kitchen exhaust fans, energy-efficient egress signs, evaporative cooling fan controls, energy-efficient motors and window films.
TEP has received approval to make the Schools Energy Efficiency Pilot Program, which covers 100% of the cost of efficiency improvements such as new HVAC systems or LED lighting, a formal program going forward.
A maximum incentive per district of $150,000 was dropped for $100,000 per school.
TEP plans to spend $1 million on the schools program in 2022, and regulators have given the company the ability to increase that budget as needed.
TEP sought changes to its Commercial Demand Response Program, which helps the utility manage periods of peak demand by allowing it to scale back power delivery to participating customers when needed in exchange for billing credits.
The company has obtained approval to require participating customers to provide at least 100 kWh of peak demand reduction on demand, and has proposed several new programs to respond to the demand.
TEP also received approval for a new load management pilot program, including pre-approved demand response elements such as battery storage at the “feeder” power distribution level, thermal storage through smart water heating systems, and connected smart thermostats.
New load management measures include “rate-optimized” smart thermostats that operate at time-of-use electric rates; Connected pool pump controls, battery storage as per customer location for commercial rate payers.
But the committee rejected TEP’s proposed incentives for HVAC thermal storage, residential battery storage, and connected water heaters, after employees found no net cost benefits.
TEP has proposed incentives for a “Useful Electrification Pilot Program,” offering incentives to convert certain vehicles and equipment to electric power.
The committee approved measures that offer discounts on spare truck cooling, which keep trucks cool during loading and unloading without their engines running; and electric towing trolleys used for baggage and parcels.
However, the committee rejected the proposed incentives for the purchase of electric forklifts and electric forklifts, and considered them uneconomical.
TEP also received approval to work with stakeholders on “small projects” to explore the value of other potential energy efficiency measures, including mobile home weatherization, community grid connectivity for energy management and shared community energy storage.
For more information about TEP’s residential and commercial energy efficiency rebate programs, go to tep.com.
Contact Senior Correspondent David Wichner at [email protected] or 520-573-4181. On Twitter: @dwichner. On Facebook: Facebook.com/DailyStarBiz