the innovative peak load reduction programinnovative program 99$47.7 152 $362.2 2,243. ceniceros 4 c...

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C A L I F O R N I A E N E R G Y C O M M I S S I O N

The Innovative Peak Load ReductionProgram

Results and Lessons Learned

Bruce CenicerosProgram manager

October 30, 2001

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The Environment

• Unheard of peak prices• High risk of extended blackouts• Governor orders unprecedented exceptions

to state administrative constraints tostreamline process.

• State of high urgency

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CEC Peak Load ProgramsMeasure AB970 SB5X Cost ($ Mil.) MW Goal

LED Traffic Signals $10.0 10Demand Responsive Buildings $48.2 214Cool Roofs $23.9 62State Bldgs. and Public Univ. $5.5 50Water/Wastewater $16.3 50Municipal Utilities $40.0 50Agriculture $87.1 105Local Government Loans $49.5 50Real Time Meters $34.0 1,500Innovative Program $47.7 152

$362.2 2,243

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Measure Cost ($ Mil.) MW Goal

Public Awareness, 20/20, Rates,Other Voluntary

$50.0 1,000

Classroom Outreach $7.0 NAOther Low Income $220.0 NARenewable projects $99.5.0 41State Energy Projects $35.0 40Mobile Efficiency Brigade $40.0 100ISO/CPUC Demand Programs ? 319Government Load Reductions ? 658Interruptible/Curtailment ? 2,322

$451.5 4,480

Other Programs

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Program Goals--Phase I

• Get Negawatts as fast as possible– 32 MW reduction by 6/1/01 from AB 970

• Solicit creative ideas from the market• Spend public’s money wisely• Minimize conflicts with other programs

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Need to Balance Competing Factors

• Speed• Cost• Public input• Reliability of projects• Equity• Diversity of projects and applicants• Administrative-resource intensity

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Program Details--Phase I

• Authorized 9/11/00 under AB 970• $6 million in grants administered by CEC

staff• Funded 10 Projects saving 32 MW• Limited to projects >500kW• Competitive solicitation

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New Program Goals--Phase II

• Get Negawatts as fast as possible– 90 MW reduction by 9/30/01– 120 MW total reduction by 6/1/02

• Diverse set of program strategies• Contract out as much work as possible• Greater diversity of projects

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Program Details--Phase II

• SB 5X allocated $40 million on 4/11/01(before results were in for Phase I)

• Fixed price: $250/kW, 1st Come/1st Served• Bonus Incentive: $1/kW for each day

operational before 9/30

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Program Elements --Phase II

Program ElementFinal

BudgetMWGoal

Large Grants $15 M 44

3rd Party Contracts $16 M 47

Small Grants $10 M 29

Total $41 M 120

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Third Party ContractsApplicant Measures Contract Amount

Novatia Shade Screens $2,000,000 SCS Engineers Landfill gas, elec gen $622,500 ECS Energy, Inc. HVAC & lighting $1,850,000 ConSol HVAC Comfortwise $2,160,000 Quantum Consulting Water/WasteWater $1,248,390 BOMA of Greater Los Angeles Commercial/Industrial Commissioning $2,250,000 Proctor Engineering Residential HVAC $780,000 Proctor Engineering Commercial HVAC $2,000,000 SCE Industrial Battery Chg. $2,000,000 Solatube Reduced Lighting Load $1,000,000 Tricon New construction design assistance $180,000 Total Requested $16,090,890

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Sample Measures• Renewable generation (PV,

landfill gas)• Industrial process changes• Lighting retrofits• HVAC retrofits• Duct sealing• Thermal Energy Storage• Water storage for off-peak

pumping

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Program Impacts*--Phases I and II

Program Element

Numberof

ProjectsMWGoal

ExpectedMW

ReductionAB 970 Grants 10 32 36

SB 5X Large Grants 27 44 59

SB 5X 3rd Party Contracts(10 contractors)

3500 47 68

SB 5X Small Grants 200 29 >24

Total 3547 152 >187

* Forecasted impacts (most projects not yet complete)

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Lessons Learned

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Lessons Learned: Timing

• Efficiency retrofits take time: plan on atleast 6 months for project completion

• If you want it fast, you must adjustexpectations for risk tolerance, quality ofproposals, project diversity, and projectfailure rates

• Multiple strategies can help balance thesefactors

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Time to project construction (weeks)4 8 12 16

3rd party contracts

20 24

Grants admin. In-house

Grants admin. by contractor

Approaches Used in Innovative PLRP

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Time (months)12 24 36

DemandSavings(MW)

Strategy A Strategy B

Energy Efficiency Incentives

Strategy C

Strategy D

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2001 Demand Reduction Strategiesin California

• Update Efficiency Standards• Rebate/Incentive programs• Public Awareness Campaign• Business Partnerships• 20/20 Rebates• Retail Rate Increases• Media Hype

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Time (months)12 24 36

DemandSavings(MW)

Public Awareness Rate Increase

Energy Efficiency Incentives

Demand Response Incentives

New Power Plants

Conceptual Plot of a Program Portfolio

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• Delegation of authority was critical– Committee given authority to approve

grant/contract awards– Contractors given more autonomy, judged on

performance– Project managers given more authority

• Couldn’t have done it without highlydedicated staff

• Streamlined processes were critical...

Lessons Learned:Moving the Program

Bureaucracy

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Lessons Learned:Moving the Program

Time to project construction (weeks)4 8 12 16

Contract awards

20 24

Grant awards

Release of grant andcontract solicitations

Usual Process

SB 5X

Bureaucracy

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Lessons Learned:Moving the Projects

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• Bonus incentives can be effective atcompressing project planning/constructionschedules if properly timed

• Need firm deadlines with strongconsequences for missing them

• Applicants need easy access to technicalassistance

• Target projects with short developmentcycles

Lessons Learned:Moving the Projects

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Lessons Learned:Serving Small Projects

• Small projects offer advantages:– Lower penetration = greater savings opportunity– More likely to be influenced by (i.e. “need”)

incentives and technical assistance– Less complex projects = faster delivery– Increases pool of available projects– More equitable

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Lessons Learned:Serving Small Projects

• Serving small projects:– Is extremely resource intensive– Comes at a much higher administrative cost– Is best done by a 3rd party administrator– Even then, takes time to process large number of apps.– Simplify application/rules– Provide ample technical support– Anticipate eligibility conflicts, but stay flexible

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Lessons Learned:Solicitation Process

• Keep application and rules simple

• Allow at least 4-6 weeks for responses

• Impose strict deadline if “1st come/1st served”

• Competitive solicitation did not yield lower price

• Strongly emphasize that existing projects are noteligible

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Lessons Learned:Third Party Contracts

• Build in flexibility to allow variety ofmanufacturer products

• Pre-approve advertising• Address data confidentiality issues up front• Issue separate applications and instructions

for grants versus contracts• Maintain funding flexibility

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Lessons Learned:Dealing with the “Aftermath”

• Be prepared for unhappy latecomers

• Be prepared for inundation of unsolicitedproposals

• Prepare quick but fair dispute resolutionprocess

• Diligently guard against double dippingand blatant free ridership.

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For Questions and Future Results

Bruce Ceniceros(916) 653-1590

[email protected]

the innovative peak load reduction programinnovative program 99$47.7 152 $362.2 2,243. ceniceros 4 c...

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