R14-2-2404. Energy Efficiency Standards

A. Except as provided in R14-2-2418, in order to ensure reliable electric service at reasonable ratepayer rates and costs, by December 31, 2020, an affected utility shall, through cost- effective DSM energy efficiency programs, achieve cumulative annual energy savings, measured in kWh, equivalent to at least 22% of the affected utility’s retail electric energy sales for calendar year 2019. B. An affected utility shall, by the end of each calendar year, meet at least the cumulative annual energy efficiency standard listed in Table 1 for that calendar year. An illustrative example of how the required energy savings would be calculated is shown in Table 2. An illustrative example of how the standard could be met in 2020 is shown in Table 4. Table 1. Energy Efficiency StandardENERGY EFFICIENCY STANDARD (Cumulative Annual Energy Savings by the End of Each Calendar Year as a Percentage of the Retail Energy Sales in the Prior Calendar Year) 2011 1.25% 2012 3.00% 2013 5.00% 2014 7.25% 2015 9.50% 2016 12.00% 2017 14.50% 2018 17.00% 2019 19.50% 2020 22.00% CALENDAR YEAR Table 2. Illustrative Example of Calculating Required Energy SavingsC REQUIRED CUMULATIVE ENERGY SAVINGS (B of current year × A of prior year) 2010 100,000,000 0 2011 100,750,000 1.25% 1,250,000 2012 101,017,500 3.00% 3,022,500 2013 101,069,925 5.00% 5,050,875 2014 100,915,646 7.25% 7,327,570 2015 100,821,094 9.50% 9,586,986 2016 100,517,711 12.00% 12,098,531 2017 100,293,499 14.50% 14,575,068 2018 100,116,043 17.00% 17,049,895 2019 99,986,628 19.50% 19,522,628 2020 99,902,384 22.00% 21,997,058 A RETAIL SALES (kWh) B ENERGY EFFICIENCY STANDARD CALENDAR YEAR C. An affected utility’s measured reductions in peak demand resulting from cost-effective demand response and load management programs may comprise up to two percentage points of the 22% energy efficiency standard, with peak demand reduction capability from demand response converted to an annual energy savings equivalent based on an assumed 50% annual load factor. The credit for demand response and load management peak demand reductions shall not exceed 10% of the energy efficiency standard set forth in subsection (B) for any year. The measured reductions in peak demand occurring during a calendar year after the effective date of this Article may be counted for that calendar year even if the demand response or load management program resulting in the reductions was implemented prior to the effective date of this Article. D. An affected utility’s energy savings resulting from DSM energy efficiency programs implemented before the effective date of this Article, but after 2004, may be credited toward meeting the energy efficiency standard set forth in subsection (B). The total energy savings credit for these pre-rules energy efficiency programs shall not exceed 4% of the affected utility’s retail energy sales in calendar year 2005. A portion of the total energy savings credit for these pre-rules energy efficiency programs may be applied each year, from 2016 through 2020, as listed in Table 3, Column A. Table 3. Credit for Pre-Rules Energy SavingsB CUMULATIVE APPLICATION OF THE CREDIT FOR THE PRE-RULES ENERGY SAVINGS IN 2016-2020 (Percentage of the Total Eligible Pre-Rules Cumulative Annual Energy Savings That Are Credited by the End of Each Year) 2016 7.5% 7.5% 2017 15.0% 22.5% 2018 20.0% 42.5% 2019 25.0% 67.5% 2020 32.5% 100.0% A CREDIT FOR THE PRE-RULES ENERGY SAVINGS APPLIED IN EACH YEAR (Percentage of the Total Eligible Pre-Rules Cumulative Annual Energy Savings That Shall Be Applied in the Year) CALENDAR YEAR E. An affected utility may count toward meeting the standard up to one third of the energy savings, resulting from energy efficiency building codes, that are quantified and reported through a measurement and evaluation study undertaken by the affected utility. F. An affected utility may count the energy savings from combined heat and power (CHP) installations that do not qualify under the Renewable Energy Standard toward meeting the energy efficiency standard. G. An affected utility may count a customer’s energy savings resulting from self-direction toward meeting the standard. H. An affected utility’s energy savings resulting from efficiency improvements to its delivery system may not be counted toward meeting the standard. I. An affected utility’s energy savings used to meet the energy efficiency standard will be assumed to continue through the year 2020 or, if expiring before the year 2020, to be replaced with a DSM energy efficiency program having at least the same level of efficiency. Table 4. Illustrative Example of How the Energy Standard Could Be Met in 2020Required Cumulative Annual Energy Savings (kWh) Total 22.00% 99,986,628 21,997,058 Breakdown of Savings and Credits Used To Meet 2020 Standard: 2020 Energy Efficiency Standard 2019 Retail Sales (kWh) Cumulative Annual Energy Savings or Credit (kWh) Demand Response Credit R14-2-2404(C) Pre-rules Savings Credit R14-2-2404(D) Building Code R14-2-2404(E) CHP R14-2-2404(F) Self-direction R14-2-2404(G) Energy Efficiency R14-2-2404(A) Up to 2.00% 1,999,733 1,100,000* 1,000,000 500,000 100,000 17,297,325 Total 21,997,058 * The total pre-rules savings credit is capped at 4% of 2005 retail energy sales, and the total credit is allocated over five years from 2016 to 2020. The credit shown above represents an estimate of the portion of the total credit that can be taken in 2020, or 32.5% of the total credit allowed.