the u.s. doe least-cost utility planning program

11
Energy Vol. 15, No. 12, pp. 1107-1117, 1990 03~5442/90 $3.00 + 0.00 Printed in Great Britain. All rights reserved Copyright@ 1990 Pergamon Press plc THE U.S. DOE LEAST-COST UTILITY PLANNING PROGRAM LINDA BERRY and ERIC HIRST Oak Ridge National Laboratory, P.O. Box 2008, Oak Ridge. TN 37831, U.S.A (Received 23 January 1990; received for publication 30 May 1990) Abstract-This paper deals with the most significant accomplishments of recent projects sponsored by the U.S. Department of Energy’s Least-Cost Utility Planning Program. This overview, with its accompanying bibliography, is designed to make the resources of these projects, completed in 1989, widely accessible to utility planners and regulators. The most significant contributions of the projects relate to three areas: (1) DSM technology assessments and database development, (2) assessments of current planning methods and future policy directions, and (3) consensus building and the development of organizational structures to support least-cost planning. 1. INTRODUCTION In the past decade, the scope of utility planning has broadened. Traditionally, electric-utility planning consisted mainly of matching expected customer load growth with new generating capacity or energy purchases. Until the 197Os, little attention was given to demand-side management or to supply resources other than utility-owned generating facilities. Today, some form of least-cost planning, which involves consideration of demand-side options, transmission and distribution, and a wide range of supply-side options, is underway in about two-thirds of the states in the U.S. Both the Electric Power Research Institute (EPRI) and the National Association of Regulatory Utility Commissioners (NARUC) have published guides and handbooks about least-cost planning. l-3 The DOE runs a least-cost utility planning program (LCUP), which supports a variety of planning activities. The purpose of this paper is to provide an overview of the most significant accomplishments of recent DOE/LCUP projects. The impetus for least-cost planning and consideration of a broad range of demand and supply options lies in the changing planning environment of utilities.’ Greater uncertainty concerning fuel prices, demand for electricity, and regulatory approval of large central-station power plants has eroded confidence in traditional planning paradigms. In addition, utilities are operating in a more competitive market, in which customers may adopt new technologies that reduce their need for the utility’s product. By using an integrated framework to evaluate a wide range of demand and supply options, least-cost planning can allow for greater flexibility and diversity of response to uncertain and changing circumstances (see Fig. 1). Typically, the least-cost planning process begins with alternative forecasts of future electric loads (Fig. 1). The utility assesses the costs and remaining lifetimes of its existing resources and identifies the need for additional energy and capacity resources consistent with corporate and social goals. The utility then assesses alternatives that could satisfy the need for new resources. Least-cost planning involves a much broader array of resources than the central-station power plants traditionally used by utilities. These supply, demand, transmission, distribution, and pricing alternatives are typically assessed with sophisticated computer models. These analyses are repeated using (1) different assumptions about the external environment (e.g. local economic growth and fossil-fuel prices) and about the costs and performance of different resources and (2) different combinations of resources. These iterations help the utility to consider systematically all of the reasonable resource options and their associated risks and rewards. This uncertainty analysis helps to identify a mix of resource options that meets the growing demand for electricity, is consistent with the utility’s corporate goals, avoids exposure to undue risks, and satisfies other environmental and social criteria. After approval by the Public Utility Commission (PVC), the plan is implemented (i.e. 1107 E61 15:12-C

Upload: linda-berry

Post on 21-Jun-2016

213 views

Category:

Documents


0 download

TRANSCRIPT

Energy Vol. 15, No. 12, pp. 1107-1117, 1990 03~5442/90 $3.00 + 0.00 Printed in Great Britain. All rights reserved Copyright @ 1990 Pergamon Press plc

THE U.S. DOE LEAST-COST UTILITY PLANNING PROGRAM

LINDA BERRY and ERIC HIRST Oak Ridge National Laboratory, P.O. Box 2008, Oak Ridge. TN 37831, U.S.A

(Received 23 January 1990; received for publication 30 May 1990)

Abstract-This paper deals with the most significant accomplishments of recent projects sponsored by the U.S. Department of Energy’s Least-Cost Utility Planning Program. This overview, with its accompanying bibliography, is designed to make the resources of these projects, completed in 1989, widely accessible to utility planners and regulators. The most significant contributions of the projects relate to three areas: (1) DSM technology assessments and database development, (2) assessments of current planning methods and future policy directions, and (3) consensus building and the development of organizational structures to support least-cost planning.

1. INTRODUCTION

In the past decade, the scope of utility planning has broadened. Traditionally, electric-utility planning consisted mainly of matching expected customer load growth with new generating capacity or energy purchases. Until the 197Os, little attention was given to demand-side management or to supply resources other than utility-owned generating facilities. Today, some form of least-cost planning, which involves consideration of demand-side options, transmission and distribution, and a wide range of supply-side options, is underway in about two-thirds of the states in the U.S. Both the Electric Power Research Institute (EPRI) and the National Association of Regulatory Utility Commissioners (NARUC) have published guides and handbooks about least-cost planning. l-3 The DOE runs a least-cost utility planning program (LCUP), which supports a variety of planning activities. The purpose of this paper is to provide an overview of the most significant accomplishments of recent DOE/LCUP projects.

The impetus for least-cost planning and consideration of a broad range of demand and supply options lies in the changing planning environment of utilities.’ Greater uncertainty concerning fuel prices, demand for electricity, and regulatory approval of large central-station power plants has eroded confidence in traditional planning paradigms. In addition, utilities are operating in a more competitive market, in which customers may adopt new technologies that reduce their need for the utility’s product. By using an integrated framework to evaluate a wide range of demand and supply options, least-cost planning can allow for greater flexibility and diversity of response to uncertain and changing circumstances (see Fig. 1).

Typically, the least-cost planning process begins with alternative forecasts of future electric loads (Fig. 1). The utility assesses the costs and remaining lifetimes of its existing resources and identifies the need for additional energy and capacity resources consistent with corporate and social goals. The utility then assesses alternatives that could satisfy the need for new resources. Least-cost planning involves a much broader array of resources than the central-station power plants traditionally used by utilities. These supply, demand, transmission, distribution, and pricing alternatives are typically assessed with sophisticated computer models.

These analyses are repeated using (1) different assumptions about the external environment (e.g. local economic growth and fossil-fuel prices) and about the costs and performance of different resources and (2) different combinations of resources. These iterations help the utility to consider systematically all of the reasonable resource options and their associated risks and rewards. This uncertainty analysis helps to identify a mix of resource options that meets the growing demand for electricity, is consistent with the utility’s corporate goals, avoids exposure to undue risks, and satisfies other environmental and social criteria.

After approval by the Public Utility Commission (PVC), the plan is implemented (i.e. 1107

E61 15:12-C

1108 LINDA BERRY and ERIC HIRST

Fig. 1. Schematic showing the steps involved with least-cost utility planning.

resources are acquired). While the plan is in force, the utility monitors changes in its environment and its implementation of the resource plan, and the plan is modified as events and opportunities change over time. Thus, least-cost planning differs from traditional utility planning in at least three ways: (1) it explicitly includes conservation and load-management programs as energy and capacity resources, (2) it considers environmental and social factors as well as direct economic costs, and (3) it carefully analyzes the uncertainties and risks posed by different resource portfolios and by external factors.

2. DOE’S LCUP PROGRAM

The LCUP program was created by the U.S. Congress in 1986. The Department of Energy (DOE) appropriation for LCUP has averaged about $1 million annually for each of the past few years. The purpose of the effort is to support utilities, PUCs, and consumers in developing integrated resource planning processes. Because LCUP funding is modest especially compared to the size of the utility industry, DOE’s role is that of a catalyst: primary responsibility for implementing LCUP rests with the utilities and PUCs. Although LCUP covers both electric and gas utilities, the initial focus is on electric utilities. The program is implemented through the DOE national laboratories, cooperative projects with EPRI and NARUC, and competitively award grants.

In 1986, DOE developed a research plan4 based on a survey of 135 utilities, PUCs and research organizations and a review of research agendas and position papers provided by these organizations, as well as testimony presented at DOE and Congressional hearings. Using this plan, DOE, in 1987 and 1988, funded 35 research and technology transfer projects.’

Among the organizations conducting LCUP projects, there are two basic roles in relation to the DOE effort. Some of the organizations such as the national laboratories have an ongoing role. Oak Ridge National Laboratory (ORNL) and Lawrence Berkeley Laboratory (LBL), for example, have completed LCUP projects during each year of the program’s existence and have more projects currently underway. The national laboratories provide technical assistance and aid in technology transfer. NARUC also has a continuing role; including publication of a two-volume handbook on least-cost planning, sponsorship of national conferences on least-cost planning, and the publication of proceedings from the conferences.6 NARUC also is developing a least-cost planning training program for its members.

Other organizations, such as PUCs and state and local government agencies, were awarded grants in 1988 to complete one specific project in 1989. These grantees were selected to conduct

U.S. DOE least-cost utility planning program 1109

cost-shared LCUP projects in response to a Fall 1986 DOE solicitation. Participants in the 1989 program included all major stakeholders: utilities (large and small, public and private); regulatory commissions; state and local governments; research and trade associations such as EPRI, and Edison Electric Institute (EEI), and the American Public Power Association; and national laboratories and consulting firms. The 24 projects completed in 1989 (Table 1) included work in the following areas: demand-side management (DSM) technologies and programs, methods and models, consensus and organizations, special studies, policy, and technology transfer.

The most significant contributions of the LCUP projects relate to three major areas: (1) DSM technology assessments and database development (Sec. 3), (2) assessments of current planning methods and future policy directions (Sec. 4), and (3) consensus building and the development of organizational structures (Sec. 5). Project contributions in each of these areas

Table 1. DOE LCUP projects completed in FY 1989.

Organization

Lawrence Berkeley Statistical mdicaIors of potential for electric utIlIIy Involvement In least-cos.1 Laboratory planning

Oak Ridge National Laboratory

Lawrence Berkeley and Oak Ridge National Labs

NaIional AswciatIon of Regulatory Utihty CornmIssIoners

Cny of Chicago

Energeucs

Steven Ferrey and Associates

Mmnesora Department of Pubhc Service

NorIheasI Region Demand-Side Manage. mcnt Exchange

Purdue Umversny

RCGHagler BaIlly

Renewable Energy lnstuute

Rhode Island Governor’s Ofhce of Energy Assistance

Sionc and Webster

Wisconsm Public ScrvIce CornmIssIon

Assessment of the DSM plans of four New York uIIlnIes Technology assessments oh motors and molar drwes, electromc office equipmenr.

thermal cool storage, and lightmg Program experience reports for: new residential and commercial bmldutgs, hghtmg,

and commercial cool storage Analysis of residential end-use load shape data

Methods of dealing with uncertainty in long-term resource planmng Case study of the Integrated planning process by an electric ulihty Marginalaat-of-service analyw as a marketmg 1001 for electw uiIluIes Electw utility energy-efhciency and load-management programs for the 199% Regulatory responsibility for utility Integrated resource planmng

Assessment of the state-of-the-art In least-MS1 plannmg and recommendations for a research agenda

Handbook on leastcost planning: volumes I and II and conference proceedmgs

Organized a cooperauve forum of utilities, regulatory agenaes, consumer groups, and others to develop a consensual least-cost plannmg process

Developed policy scenaoos for IeasI-cosI plannmg

Studied legal issues on use of u1Il11y wholesale power transactions as a least-cost planning mechamsm

Conducted a joint plannmg exercue wnh IWO uuliues In applying the MIDAS model

Developed a DSM program experience database through cooperawe efforts of 20 member utilities

Developed a set of models that assesses the value of Incentive rate structures for rhe sleel mdustry

Prepared a summary of electnc uuhty supply/demand situaIIon In Colorado

Prepared a manual for the assessment of renewable energy resources

Developed a database, planned and implemented u1Ility commercial lighting programs

Applied the EGEAS model IO case-study utIlIIy data

Planned and created Ihe WIsconsIn Center for Demand-Side Research

1110 LINDA BERRY and ERIC HIR.V

are reviewed below. Additional information on these and other LCUP projects is in a recent ORNL report.’

3. DSM TECHNOLOGY ASSESSMENTS AND DATABASES

The information available on DSM resources (i.e., on the cost-effective options that utilities can deploy to reduce peak loads, improve load factors, and improve overall energy efficiency) is much less than that available on supply resources. This difference exists in part because utilities have been operating power plants for a century but have been running DSM programs for less than a decade. In addition, much less attention and fewer resources have been devoted to collecting and standardizing DSM data.

Thq research plan developed by DOE in 19&j4 identified improved information on DSM technologies and programs as a key research need. At present, the coverage of various technologies, end-use sectors, and program types is uneven and incomplete. As a result, utility DSM plans tend to cover only a subset of end-uses and technologies. Adequate baseline data, at the level of hourly loads by end-use, are needed for analyses of DSM technology performance, penetration rates, and utility system load impacts.

Several DOE projects are aimed at improving the reliability and accessibility of DSM data. The 1989 projects concerned with developing and using DSM data more effectively include the Northeast Region Demand-Site Management Data Exchange (NORDAX) database, the Rhode Island planning and implementation of commercial lighting programs, and several LBL projects.

3.1. NORDAX DSM database

The NORDAX project grew out of the recognition by many of the Northeast region’s electric utilities that data and information on DSM program experiences is widely scattered, difficult to access, and highly variable in format, completeness and quality. A formal codification, collection and exchange of data on DSM program experiences in a regional database was envisioned as a solution to several problems. The utilities and other NORDAX supporters believed that such a database would improve the quality and comparability of program experience information, provide a means of improving the effectiveness of programs, and make it more feasible to represent program load impacts and costs accurately in integrated planning models.

NORDAX was a cooperative effort supported by all of New York state’s utilities, a number of other northeastern utilities, the New York Public Service Commission, several national laboratories, the Alliance to Save Energy, EEI, EPRI, state and city energy agencies, other groups, and DOE’s LCUP program. DOE provided the seed money for the larger effort.

The goals of the NORDAX project included: (1) the development of a workable format for collecting and presenting data on DSM technologies and programs, (2) the development of a survey instrument, (3) the production of a high quality detailed DSM database with software and users’ manuals, and (4) the publication of a national directory of DSM personnel and of a final report.‘. 9 Another important NORDAX goal, the establishment of a regional organiza- tion to maintain and update the database, is an ongoing activity supported by the member utilities that also supported the data collection.

Data collection was conducted in two phases. At the end of the first phase, the NORDAX database included information on more than 90 DSM programs implemented by 17 utilities in the northeast. With the completion of the second round of data collection, the number of programs in the database increased to 123. A third round of data collection is planned for 1990-1991. The structure of the database is shown in Fig. 2. The survey instrument used to collect the information is over 50 pages long and comprehensively covers topics such as utility characteristics; general market information; DSM program design, costs, and market penetra- tion rates; technology characteristics; and energy and demand savings.

The NORDAX survey instrument and software represent a state-of-the-art effort in DSM databases. Major strengths of the project are the definitional clarity and comprehensiveness of

U.S. DOE least-cost utility planning program 1111

1 NORDAX STRUCTURE j

1

I

Utility Characteristics

l Utility Profile l General Market l Demographic 8

Saturation l Generation 8

Energy Productior l DSM Rates l Evaluation Methods

1 -

1

I

DSM Program Characteristics

l Program Description l Program History l Market Size *Marketing Methods l Program Costs

l Participation l Free-Riders

I- I

Technology Characteristics

l Technology Description

l Energy 8 Load Data b Capital, Operating a

Maintenance Costa b Useful Life b Saturation Data b Footnote

Fig. 2. Structure of the NORDAX database.

the survey instrument and its emphasis on actual program experience. A major shortcoming is that the information on energy and demand savings is based mainly on engineering estimates rather than on metered (actual) electricity savings. This was unavoidable because most of the utilities do not have energy savings data based on end-use metering or billing analyses. The measurements of program costs and market penetration, however, are based on actual program experience. Another limitation of the database is the newness of the programs included (most are less than 1 yr old), and, therefore, their irrelevance to the problem of defining long-term planning assumptions. lo

The NORDAX database is available primarily to member utilities, although summary information is available to the public. The ultimate usefulness of the NORDAX data for integrated resource planning has yet to be determined. Utility analysts have received the database and training in its use. A mechanism is in place to monitor the applications that they make of the database. To fully assess the success of NORDAX, the value of the database to utility planners needs to be evaluated over time. The persistence of the data management organization is also an important criterion of success. So far, NORDAX is progressing very well. The NORDAX experience offers an important organizational model of how to conduct a regional effort to develop a demand-side database. Other regions should draw on this experience if they wish to develop similar databases for their areas. DOE has provided additional funding to NORDAX so that it can encourage and provide technical assistance for the development of similar databases in other regions.

3.2. Rhode Island planning and implementation of commercial lighting programs

The Rhode Island project accomplished its goal of assisting the three utilities in the state with the planning and implementation of new commercial lighting conservation programs. All three of Rhode Island’s utilities are now conducting commercial lighting programs developed with the assistance of the DOE/LCUP program.

In preparation for the implementation of the commercial lighting programs, a database on about 1000 commercial and industrial buildings was developed with data from the state’s Commercial and Apartment Conservation Service audits. This database was used, along with other sources, to characterize the potential market for commercial and industrial conservation programs in the state. The database contains information on floor space, electricity use, number of fluorescent lights, types of ballasts, etc. A companion report discusses the most promising targets for commercial/industrial program efforts in Rhode Island. The identification of the best targets is based on an analysis of technical options in terms of their energy-saving potential, which is then combined with information on the potential market in Rhode Island.” The project’s final report discusses the design of the utility programs and summarizes the technical information that was used for program planning.‘* A schematic of the overall planning methodology is shown in Fig. 3.

1112 LINDA BERRY and Emc Hmsr

Billing Data

on all

C/I Customers

Audit

RI Utilities

Narragansett-

Blackstone-

Newport-

Additional

- Audits

Rocky Mountain Institute -b

+- XENERGY Lawrence Berkeley

Laboratory II, 7 Technologies

pj&q+~~~ Narragarfaet; Ele(ctric Co. Blackstone Valley Electric Co. Newport Electric Co. Block Island Power Co. Pascoag Fire District

Fig. 3. Rhode Island DSM planning methodology.

The Rhode Island project demonstrated an effective, low-cost approach to developing a database useful for DSM program planning. The extensiveness of the audit database and the care taken in its analysis and aggregation produced accurate estimates of technical potential. This project’s success suggests the feasibility and value of using existing data sources to improve the quality and lower the cost of assembling baseline DSM data in other locations.

Another strength of this project was the early involvement and regular contact among all the major stakeholders in the planning process--the Governor’s Office of Energy Assistance, the Public Service Commission, and the state’s electric utilities all participated from the beginning of the project. The cooperation and consensus obtained concerning the development and implementation of the new programs in Rhode Island was an important accomplishment of the project. Future analyses of the elements needed to develop this consensus might offer insights as to how such a cooperative process could be fostered in other locations.

After about one year of operation (1989), these programs had led to the installation of over 250,000 high-efficiency lamps in over 2000 businesses for an estimated savings of about 3 MW. In addition, many of the businesses receiving the lamps installed high-efficiency ballasts and specular reflectors which will add to the energy savings. An evaluation of the energy impacts and cost-effectiveness of the programs implemented by the utilities is underway and will serve as an additional indicator of this project’s accomplishments.

3.3. LBL DSM projects

LBL has completed several major studies during the past year in the area of DSM baseline data, technology assessment, and market penetration. For example, with co-sponsorship from the California Energy Commission, LBL has assembled available residential end-use load data from three California utilities. These metered data were used to produce representative load shapes suitable for use in hourly load forecasting models.13

U.S. DOE least-cost utility planning program 1113

In the area of DSM technology assessment, LBL completed studies on thermal cool storage,14 adjustable-speed motors,” lighting,16 and office electronic equipment.” The objec- tive of the LBL technology assessments is to provide utilities and regulators with high quality information on demand-side technologies that are currently available or likely to be available in the next few years. The approach is to review, critique and synthesize existing published and, especially, unpublished “gray” literature materials on technologies and programs. A special emphasis is placed on introducing measured data on technology or program performance.

LBL also has completed program-experience reports on thermal cool storage,” new construction,” and lighting.*’ These reports combine information from interviews with program managers with information from publications and gray literature. The reports present lessons from experience concerning what level of program performance is typical and how to structure programs effectively.

ORNL and LBL*l compared the data available on supply resources with those available on demand-side resources. They also discussed the types of data that are needed to assess existing patterns and trends in electricity use (baseline data), the costs and performance of demand-side technologies, and the effects of demand-side programs.

3.4. Conclusions about DSM projects

Although there is clearly much more to do before the full range of DSM resources can be adequately quantified for use in integrated planning models, the DOE projects have made important progress. NORDAX may be a significant first step toward the goal of reporting DSM program experience in a consistent and comparable format that allows for the transfer of results across utilities. The Rhode Island approach to developing a database and an organizational consensus that promotes the implementation of effective programs provides a model that should be emulated in other locations. The LBL program experience reports include more information than was previously available on these program types. The LBL efforts to quantify the actual performance, costs and load shape impacts of DSM technologies should substantially improve the accuracy of these inputs to planning models. These and future projects will help to reduce the imbalance between the efforts devoted to collection and analysis of information on DSM programs vs supply resources. As the amount and quality of information on utility energy-efficiency and load-management programs improves, utilities will be more likely to rely on such resources to meet future energy-service needs.

4. ASSESSMENTS OF CURRENT PLANNING METHODS AND FUTURE POLICY DIRECTIONS

Both ORNL and LBL completed reports during the past year that assess current least-cost planning methods. ORNL prepared a series of reports dealing with the process, analytical methods, and uncertainty techniques used for intergrated resource planning.22*2” Much of ORNL’s recent work deals with treatment of uncertainty in resource planning, including a review of 10 utility plans23 (Table 2) and an analysis of the special characteristics of DSM programs with respect to uncertainty reduction.24 ORNL is now conducting further analysis of utility integrated plans and planning processes.2s This analysis reviews more utility plans (in addition to the plans already studied) and includes additional topics.

LBL recently reviewed the DSM plans of four New York utilities as part of a collaborative project with the New York Public Service Commission.26 LBL developed broad guidelines against which individual plans were assessed including: comprehensiveness, assessment of DSM technical and program-based potential, assessment of program costs, economics, design and implementation, and utility commitment of resources.

LBL and ORNL are also conducting a joint project on demand-side bidding procedures.27 This research has led to the identification of important issues associated with an emerging means of acquiring demand-side resources. ORNL and LBL completed a recent assessment of the state-of-the-art in least-cost utility planning, which led to the identification of key elements for a LCUP research agenda.*’ Because the assessment was reviewed by about 30 people in

1114 LINDA BERRY and ERIC HIRST

Table 2. Analytical techniques used to treat uncertainty.

Type of

Scenario analysis

Sensitivity factors

Portfolio analysis

Probabilistic analysis

Alternative, internally consistent, futures are first constructed. Then resource options are identified to meet each of these futures. Best options can then be combined into a unified plan.

Preferred plan (combination of options) is first identified. Key factors are then varied to see how the plan responds to these variations.

Multiple plans are developed, each of which meets different corporate goals. Often, these plans are then subjected to sensitivity analysis.

Probabilities are assigned to different values of key uncertain variables, and outcomes are identified that are associated with the different values of the key factors in combination. Results include the expected outcome and cumulative probability distribution for key factors, such as electricity prices and net present value of revenue requirements.

utilities, commissions, DOE, environmental groups, and other organizations, it reflects a diversity of experience and views on resource planning. The major recommendations for future work in least-cost planning include the following: (1) assess regulatory alternatives that reward utilities for successfully implementing least-cost plans; (2) expand training, networking, and other technical-support activities that share planning successes, analytical tools, and innovative regulatory strategies among public utility commissions and utilities; (3) encourage and document successful institutional arrangements for resource planning and implementation; (4) develop information on the performance and costs of demand-side technologies and pro- grams to help balance the information available on demand and supply options; (5) incorporate environmental and other social factors into resource planning.

A second report that deals with policy issues suggests much larger and more active roles for utilities in acquiring energy-efficiency and load-management resources.29 This report also suggests that the federal government adopt policies to encourage a more active utility role in DSM such as: (1) regulation of wholesale transactions by the Federal Energy Regulatory Commission, (2) implementation of DSM programs by federal power marketing agencies, and (3) expansion of DOE’s technology-transfer activities.

In general, the national laboratories play significant technical-assistance and technology- transfer roles by reviewing utility plans, technologies and program experiences; and by evaluating least-cost activities, policies, progress and issues.

5. CONSENSUS BUILDING AND DEVELOPMENT OF ORGANIZATIONAL STRUCTURES

A project which dealt primarily with consensus building and the development of organiza- tional structures was conducted by the Wisconsin Public Service Commission. The Rhode Island commercial lighting programs project and the NORDAX project also accomplished goals related to consensus building and the development of organizational structures (as discussed in Sec. 3).

The goal of the Wisconsin project was to identify and help overcome organizational barriers to the performance of cooperative demand-side research that could be used for utility planning in Wisconsin. The project consisted of two approaches, each designed to reduce organizational barriers to the successful performance of demand-side research. The first was the identification

U.S. DOE least-cost utility planning program 1115

of cooperative research projects that could attract the support of various existing organizations. The second was an examination of the feasibility of forming a new, independent, state-wide organization to conduct DSM research.

The Energy Utility Research Working Group, which includes senior executives from Wisconsin utilities, faculty of the University of Wisconsin, and staff and a commissioner from the Commission, reached an agreement in May 1988 to support a new organization for demand-side research-the Wisconsin Center for Demand-Side Research (WCDSR). The Wisconsin utilities committed themselves to providing funding ranging from $1 million in the first year to $1.8 million in the fifth. Oil overcharge funds will provide seed money to get the Center off to a good start. A director for WCDSR was hired in late 1989 and more staff will be recruited in 1990. A list of proposed research projects has been developed. An annual budget of $1-2 million is planned for WCDSR.

The DOE grant was instrumental in the development of an emerging consensus of the need for and the desired structure of the WCDSR. Other states interested in developing an institutional mechanism for the conduct of demand-side research can learn much from Wisconsin’s experience.30

6. CONCLUSIONS

Important progress in the area of DSM technology and program assessment is evident in several of the 1989 DOE/LCUP projects. The NORDAX, Rhode Island and LBL efforts will help to reduce the imbalance between the efforts devoted to collection and analysis of information on DSM resources vs supply resources. As the amount and quality of information on utility energy-efficiency and load-management programs improves, utilities will be more likely to rely on such resources to meet future energy-service needs.

In the area of assessing methods and policy for least-cost planning, the national laboratories provide technical assistance in many areas. ORNL and LBL reports cover a broad range of issues such as regulatory responsibilities, methods of dealing with risk and uncertainty, technology assessment, DSM program experience, reviews of integrated planning processes and research agendas, and conservation supply curves and load shape analyses.

Three of the most successful DOE/LCUP projects (WCDSR, NORDAX and Rhode Island) involved the creation of new organizations that will continue to promote least-cost utility planning objectives without further DOE involvement. A key element in each of these successful efforts to develop new organizations was the inclusion of major stakeholders from the beginning. As these projects illustrate, successful regional collaborations require a high level of involvement and commitment from all of the major stakeholders. Having the interest and support of both the regulatory agencies and the utilities seems especially important.

There are many opportunities for collaborative efforts in least-cost planning at the state and regional levels. At the state level, efforts involving several utilities and the state regulatory commission and/or energy office could often be useful. The Wisconsin project staff reviewed the state-level R&D mechanisms operating in New Jersey, North Carolina, New York, Kansas, California, Florida and New Mexico. These states, along with the evolving Wisconsin and Rhode Island projects, offer models other states could follow. At the regional level, efforts similar to NORDAX, might be developed for other regions.

DOE’s role is primarily catalytic, providing the motivation for other organizations to join in cost-sharing and information-sharing projects. DOE’s participation in these projects helps to publicize and legitimize least-cost planning and aids the technology-transfer processes among utilities, commissions, and other interested groups. In summary, DOE’s investment of $1-52 million/yr in LCUP projects is reaping large benefits for utilities, their customers, and regulatory commissions.

Acknowledgemenr-The work reported here was sponsored by the Office of Buildings and Community Systems, U.S. Department of Energy, under Contract No. DE-ACW840R21400 with Martin Marietta Energy Systems.

1116 LINDA BERRY and ERIC HIRST

1.

2.

3.

8.

9.

10.

11.

12.

13.

14.

15.

16.

17.

18.

19.

20.

21. 22.

23.

24.

25.

26.

REFERENCES

C. W. Gellings, J. H. Chamberlin, and J. M. Clinton, “Moving Toward Integrated Resource Planning: Understanding the Theory and Practice of Least-Cost Planning and Demand-Side Management,” EPRI EM-5065, Electric Power Research Institute, Palo Alto, CA (February 1987). National Association of Regulatory Utility Commissioners, “Least-Cost Utility Planning, A Hand- book for Public Utility Commissioners,” Vol. 1, Washington, DC (October 1988). National Association of Regulatory Utility Commissioners, “Least-Cost Utility Planning, A Hand- book for Public Utility Commissioners,” Vol. 2, The Demand-Side: Conceptual and Methodological Issues, prepared by Florentin Krause and Joseph Eto of Lawerence Berkeley Laboratory for NARUC, Washington, DC (December 1988). U.S. Department of Energy, “Department of Energy Least-Cost Utility Planning Research Agenda,” prepared by Temple Barker & Sloane, Inc., Lexington, MA (May 1986). U.S. Department of Energy, “Least-Cost Utility Planning Program Activities,” Office of Buildings and Community Systems, Washington, DC (September 1988). National Association of Regulatory Utility Commissioners, “National Conference on Least-Cost Utility Planning: Proceedings,” Aspen, CO, Washington, DC (10-13 April 1988). L. Berry and E. Hirst, “Recent Accomplishments of the U.S. Department of Energy’s Least-Cost Utility Planning Program,” ORNL/CON-288, Oak Ridge National Laboratory, Oak Ridge, TN (August 1989). Northeast Region Demand-Side Management Date Exchange, “NORDAX: A Regional Demand- Side Management Database, Final Report,” Edison Electric Institute, Publication No. 07-89-32, for NORDAX (March 1989). Northeast Region Demand-Side Management Date Exchange, “NORDAX-Phase 1 DSM Program Data Summary Report, Final Report,” Edison Electric Institute, Publication No. 07-89-30, for NORDAX (April 1989). L. Berry, “The Administrative Costs of Energy Conservation Programs,” ORNL/CON-294, Oak Ridge National Laboratory, Oak Ridge, TN (November 1989). Xenergy, Inc., “Statewide Commercial/Industrial Technical Potential for Energy and Demand Savings,” Rhode Island Least-Cost Planning Committee, Providence, RI (March 1988). Xenergy, Inc., “A Statewide, Least-Cost Plan for Rhode Island: Final Report on the Initial Work of the Rhode Island Least-Cost Planning Committee,” Rhode Island Least-Cost Planning Committee, Providence, RI (December 1988). H. Ruderman, J. Eto, K. Heinemeier, A. Golan and D. Wood, “Residential End-Use Load Shape Data Analysis,” LBL-27115, Lawrence Berkeley Laboratory, Berkeley, CA (June 1989). M. A. Piette and E. Wyatt, “Measured Energy Performance of Cool Storage in Commercial Buildings: An Update of BECA-LM,” Lawrence Berkeley Laboratory, Berkeley, CA (July 1988). S. Greenburg, J. P. Harris, H. Akbari, and A. de Almeida, “Technology Assessment: Adjustable- Speed Motors and Motor Drives,” LBL-25080, Lawrence Berkeley Laboratory, Berkeley, CA (March 1988). M. A. Piette, F. Krause, and R. Verderber, “Technology Assessment: Energy-Efficient Commercial Lighting,” LBL-27032, Lawrence Berkeley Laboratory, Berkeley, CA (March 1989). J. P. Harris, J. Roturier, L. K. Norford, and A. Rabl, “Technology Assessment: Electronic Office Equipment,” LBL-25558, Lawrence Berkeley Laboratory, Berkeley, CA (November 1988). M. A. Piette and J. P. Harris, “Program Experience Report: Commercial Cool Storage,” LBL-25782, Lawrence Berkeley Laboratory, Berkeley, CA (October 1988). E. Vine and J. P. Harris, “Planning for an Energy-Efficient Future: The Experience with Implementing Energy Conservation Programs for New Residential and Commercial Buildings,” LBL-25525, Lawrence Berkeley Laboratory, Berkeley, CA (September 1988). F. Krause, E. Vine, and S. Gandhi, “Program Experience & Its Regulatory Implications: A Case Study of Utility Lighting Efficiency Programs,” LBL-28268, Lawrence Berkeley Laboratory, Berkeley, CA (1989). E. Hirst and C. Goldman, Energy Is, 403 (1990). E. Hirst and C. Knutsen, “Developing an Integrated Planning Process: An Electric Utility Case Study,” ORNL/CON-247, Oak Ridge National Laboratory, Oak Ridge, TN (January 1988). E. Hirst and M. Schweitzer, “Uncertainty in Long-Term Resource Planning for Electric Utilities,” ORNL/CON-272, Oak Ridge National Laboratory, Oak Ridge, TN (December 1988). E. Hirst, “Benefits and Costs of Small, Short-Lead-Time Power Plants and Demand-Side Programs in an Era of Load-Growth Uncertainty,” ORNL/CON-278, Oak Ridge National Laboratory, Oak Ridge, TN (March 1989). E. Hirst, M. Schweitzer, E. Yourstone, and J. Eto, “Assessing the Value of Integrated Resource Plans Prepared by Electric Utilities,” ORNL/CON-290, Oak Ridge National Laboratories, Oak Ridge, TN (April 1990). C. Goldman and E. Kahn, “Comparative Assessment of the Demand-Side Management Plans of Four New York Utilities,” LBL-26374, Lawrence Berkeley Laboratory, Berkeley, CA (February 1989).

U.S. DOE least-cost utility planning program 1117

27. C. Goldman and E. Hirst, “Key Issues in Developing Demand-Side Bidding Programs,” Chap. 23 in Demand-Side Management: Partnerships in Planning for the Next Decade, Proc.: ECNE National Conference on Utility DSM Programs, EPRI CU-6598, Electric Power Research Institute. Palo Alto. CA (November 1989).

28. “Least-Cost Planning in the Utility Sector: Progress and Challenges,” LBL-27130, ORNL/CON-284, C. Goldman, E. Hirst and F. Krause eds., Lawrence Berkeley Laboratory, Berkeley, CA and Oak Ridge National Laboratory, Oak Ridge, TN (May 1989).

29. E. Hirst, “Electric-Utility Energy-Efficiency and Load Management Programs: Resources for the 199Os,” ORNL/CON-285, Oak Ridge National Laboratory, Oak Ridge, TN (June 1989).

30. R. Prahl, “Evaluation for PUCs,” Proc. 1988 ACEEE Summer Study on Energy Efficiency in Buildings, Vol. 9, pp. 9.126-9.138, American Council for an Energy Efficient Economy, Washington, DC (August 1988).