verlon g. otto director, regulatory affairs email: votto@png · cod s and standards s 14,052 s...

Verlon G. Otto Director, Regulatory Affairs

Pacific Northern Gas Ltd. 750 – 888 Dunsmuir Street Vancouver, BC V6C 3K4 Tel: (604) 691-5680 Fax: (604) 697-6210 Email: [email protected]

Via E-File March 6, 2020 B.C. Utilities Commission File No.: 4.2.7(2020) Suite 410, 900 Howe Street Vancouver, BC V6Z 2N3 Attention: Patrick Wruck Commission Secretary and Manager, Regulatory Services Dear Mr. Wruck: Re: Pacific Northern Gas Ltd. and Pacific Northern Gas (N.E.) Ltd. Application for Acceptance of 2019 Consolidated Resource Plan and for Acceptance of

Energy Conservation and Innovation (ECI) Portfolio Funding for 2020 and 2022 Response to BCOAPO Information Request No. 1

Accompanying, please find the response of Pacific Northern Gas Ltd. and Pacific Northern Gas (N.E.) Ltd. (collectively, PNG) to BC Old Age Pensioners’ Organization, Active Support Against Poverty, Council of Senior Citizens’ Organizations of BC, Disability Alliance BC, and Tenant Resource and Advisory Centre (BCOAPO) Information Request No. 1 in the referenced proceeding. Printed copies of the response will be delivered by courier on Monday, March 9, 2020, including 10 copies to the BCUC’s office and one copy to each of the parties who registered as interveners in this proceeding. Please direct any questions regarding this letter to my attention. Yours truly, Verlon G. Otto cc. Bill Andrews – BCSEA Tom Hackney – BCSEA

Leigha Worth (BCPIAC) – BCOAPO

B-4

Yvonne.Lapierre

PNG-PNGNE Consolidated Resource Plan and ECI

Pacific Northern Gas Ltd. and Pacific Northern Gas (N.E.) Ltd. 2019 Consolidated Resource Plan and ECI Portfolio Funding Application Response to BCOAPO IR No. 1 March 6, 2020 Page 1 of 15

REQUESTOR NAME: BCOAPO et al.

INFORMATION REQUEST ROUND NO: #1

TO: PNG Ltd. And PNG (NE) Ltd.

DATE: February 06, 2020

APPLICATION NAME: 2019 Consolidated Resource Plan (CRP) and Energy Conservation and Innovation (ECI) Portfolio Funding for 2020 - 2022

1.0 Reference: Decision and Order G-121-19, 06 June 2019, Table 1 The referenced table is reproduced below:

DSM me 2019 forecast 2020 forecast Total

ure 2019-2020

Low Income - ESK s 11,848 s 11,848 s 23,696

Low Income - ECAP s 35, s 28,500 $ 63 500

Residential Fumace Replacement $ 95, s U0,800 s 216,600

Rental Accomodatlons - ECAP na na s -

Commercial Soller Replacement $ 29,300 $ 29,300 s 58,600

Commercial Water Heater Replacement s 31,100 s 40,300 $ 71,400

Comm rcial Ettident Kitchen Program s 18,650 s 24,500 $ 43,150

Conservation Education and Outreach -$ 39,983 $ 39,983 $ 79,966

Elementary School Program

Conservation Education and Outreach - s 24, $ 24,000 $ 48,000 Post Secondary Program

Conservation Education and Outreach -$ 85, s 25,800 s 111.600

General

Cod s and Standards s 14,052 s 14,000 s 28,052

Innovation $ 35, $ 35,000 s 70,000

Enabling Activities s 6,000 $ 6,000 s 12,000

Total Annual Portfolio p nditur $ 426,533 $ 400,031 s 826,564


1.1 Please augment this table by adding three extra columns, one for 2019 Actual (or the most recently available estimate for 2019 actuals), one for 2020 Revised Forecast, and one for Revised Total 2019-2020 and update any other information in the table if appropriate.

Response: Please see the table that follows. PNG has added an additional row to the original table to reflect the replacement of the proposed Residential Furnace Replacement program that was denied by the BCUC in Order G-121-19, with the Residential Efficient Heating program proposed in the 2019 DSM Plan (attached as Appendix F to the 2019 Consolidated Resource Plan). PNG has added a second additional row to include the Commercial HVAC Controls program also proposed in the 2019 DSM Plan. Differences between the 2019 and 2020 forecast expenditures as originally presented in Table 1 of Decision and Order G-121-19, and the revised 2019 and 2020 forecast expenditures presented in the 2019 DSM Plan are based on a more complete view of actual costs incurred in 2019 (in the case of the ESK, ECAP and Conservation Education and Outreach programs). Updates to the cost forecasts for the Commercial Boiler Replacement and Efficient Kitchens programs are based on changes to the incentive structure of these programs as described in Sections 10.3.2 and 10.3.4 of the 2019 DSM Plan, respectively. Updates to the cost forecast for the Commercial Water Heater Replacement program reflects an anticipated increase in participation resulting from more effective marketing and outreach to HVAC contractors in PNG’s service territories.


1.2 Please provide a brief explanation for significant variances between the

information provided in the added columns provided in your response to the preceding IR and the information that appeared in the referenced table of Order G-121-19.

Response: Please see the response to Question 1.1.

DSM measure 2019 forecast

2019 forecast

(Revised in 2019

DSM Plan)

2020 forecast

2020 forecast

(Revised in 2019

DSM Plan)

Total

2019-2020

Total

2019-2020

(Revised in 2019

DSM Plan)

Low Income - ESK $ 11,848 $ 11,848 $ 11,848 $ 12,900 $ 23,696 $ 24,748

Low Income - ECAP $ 35,000 $ 35,000 $ 28,500 $ 48,500 $ 63,500 $ 83,500

Residential Furnace Replacement $ 95,800 na $ 120,800 na $ 216,600 $ -

Residential Efficient Heating na $ - na $ 193,700 $ - $ 193,700

Rental Accomodations - ECAP na na na na $ - $ -

Commercial HVAC Controls na $ - na $ 208,500 $ - $ 208,500

Commercial Boiler Replacement $ 29,300 $ 29,300 $ 29,300 $ 51,000 $ 58,600 $ 80,300

Commercial Water Heater Replacement $ 31,100 $ 31,100 $ 40,300 $ 49,200 $ 71,400 $ 80,300

Commercial Efficient Kitchen Program $ 18,650 $ 18,650 $ 24,500 $ 48,700 $ 43,150 $ 67,350

Conservation Education and Outreach -

Elementary School Program $ 39,983 $ 39,983 $ 39,983 $ 60,000 $ 79,966 $ 99,983


Post Secondary Program $ 24,000 $ 24,000 $ 24,000 $ 24,000 $ 48,000 $ 48,000


General $ 85,800 $ 85,800 $ 25,800 $ 33,500 $ 111,600 $ 119,300

Codes and Standards $ 14,052 $ 14,052 $ 14,000 $ 10,000 $ 28,052 $ 24,052

Innovation $ 35,000 $ 35,000 $ 35,000 $ 35,000 $ 70,000 $ 70,000

Enabling Activities $ 6,000 $ 6,000 $ 6,000 $ 6,000 $ 12,000 $ 12,000

Total Annual Portfolio Expenditure $ 426,533 $ 330,733 $ 400,031 $ 781,000 $ 826,564 $ 1,111,733


2.0 Reference: Decision and Order G-121-19, 06 June 2019, Section 3.0 and Table 2 The following is excerpted from the referenced material:

Evidence

PNG acknowledges that it has underspent by approximately $827,000 in the period 2015–2018, 67% less than the approved amount of $1,240,000. PNG identifies two factors responsible for actual expenditures on many of PNG’s ECI programs being lower than originally forecast. First, the uptake on PNG’s commercial incentive programs has been lower than anticipated. Second, PNG launched the commercial programs in 2017, rather than in 2016 as originally anticipated. This reduced level of activity translated into a reduction in the ratio of DSM expenditures to revenues, from the anticipated 0.54% in 2015 to the lower actual results shown in the table below:

Table 2

2015 2016 2017 2018

DSM Expenditures ($) s - $ 215,244 s 70,696 $110,035 . ~

Utility Revenues s 75,467 s 64,572 s 72,703 s 65,151 normalized (SOOO)

DSM Expenditures as 0. 0.33% 0.10% 0.17%

portion of Utility Revenues -


2.1 Please augment the table above by adding a column for 2019 Actual (or, in the alternative, the best and most recent estimate of 2019 Actual) and adding a column for 2020 which includes the most recent Projection/Forecast for 2020.

Response: Please see the table that follows. PNG expects to present its finalized cost analysis for 2019 in its Annual DSM report filed with the BCUC on or before April 30, 2020. To be consistent with the presentation in the response to Question 1.1, PNG has included the revised 2019 forecast of $330 thousand in this table.

2.2 Please provide a full explanation if there was significant under-spending in

2019.

Response: PNG expects to present its finalized cost analysis for 2019 in its Annual DSM report filed with the BCUC on or before April 30, 2020. PNG does not expect significant under spending in 2019.

2015 2016 2017 2018 2019 2020 (f)

DSM Expenditures ($) -$ 215,244$ 70,696$ 110,035$ 330,733$ 781,000$

Utility Revenues

normalized ($000)75,467$ 64,572$ 72,703$ 65,151$ 71,740$ 76,000$

DSM Expenditures as a

portion of Utility Revenues0.00% 0.33% 0.10% 0.17% 0.46% 1.03%


3.0 Reference: Decision and Order G-121-19, 06 June 2019, Section 3.0, Table 3

The referenced table is reproduced below:

Table 3

3.1 Please update the table above using the utility’s best information available currently.

Response: Please see the table that follows.

Estimated gross

annual gas savings

from ECI measures

(GJ)

Total Annual Gas

Sales

(GJ)

ECI Savings

as % of Gas Sales

(gross)

Total Annual

Deliveries (Sales +

Transport)

(GJ)

ECI Savings

as % of Deliveries

(gross)

A B =A/B C =A/C

2018 1,961 6,313,276 0.03% 10,426,287 0.02%

2019 5,138 6,501,643 0.08% 10,373,828 0.05%

2020 18,063 6,658,003 0.27% 10,728,262 0.17%

Year

Est·mated ,gross Total Annual Gas ECI Savings

Total Annual ECI Savings

annual ,gas savings Salles a.s % of Gas Sales

Deliveries ,fsales + as % of Deliveries

Year from ECI measures Transport} (GJ)

(GJ) (gmss) ,(GJ) fgrosst

A B =A/ B C =A/ C

2018, 1,96:ll 6,313,2ii6 0 .03% 9,913,628 0.02%

'" 2019 4,48:ll 6,810,708 0 .07% n ,295, 176 0.04!%

2020 8,840 6,810,708 0.13% n ,295, 176 0.08%


4.0 Reference: Exhibit B1, page 129, Table 37: 2020-2022 ECI Plan energy

savings and GHG emission reductions

4.1 Please provide a similar table for the previous ECI plan energy savings and GHG emission reductions to indicate the results as at the end of 2019.

Response: Please see the table that follows. Gas savings and the associated GHG reductions are calculated based on the number of installed measures at the end of 2019 multiplied by the energy savings and life of the measure, both of which are presented in Section 10 of the 2019 DSM Plan.

Gas Savings

(over life)

GHG Reduction

(over life)

Sector Name GJ tonnes

Residential Efficient Heating -

Residential Efficient Furnace -

Low Income ECAP 8,972 502

Low Income ESK 36,801 2,061

Commercial HVAC Controls -

Commercial Efficient Boilers 32,836 1,839

Commercial Efficient Hot Water Heaters -

Commercial Efficient Kitchens 90 5

Subtotal Incentive Programs 78,699 4,407

Education K-12 - -

Education Post Secondary - -

Outreach General - -

Codes and StandardsSupport for Codes and Standards - -

Innovation Innovation - -

Admin Enabling Activities - -

78,699 4,407

Installed Measures at end of 2019

Portfolio Total


5.0 Reference: Exhibit B1, Appendix F, PNG – PNG NE ECI, 2019 DSM Plan,

October 31, 2019, page 3, Table 1, ECI Portfolio Costs and Savings Summary, Table 2, Residential Program Area Summary, and Table 3, Commercial Program Area Summary

5.1 Is there a lag, generally, between when the expenditure is made, and the

associated savings are realized? If so, please provide the typical or average lag; if the lag is dependent on the ECI program on which the expenditure is made, please provide the average lag for each ECI program between when the program expenditure is made and when the full savings are realized.

Response: PNG assumes that there is no lag between when the expenditure is made, and the energy savings associated with the residential and commercial programs that PNG currently offers, or those that it proposes to implement beginning in 2020.

5.2 Is it useful to use the information provided in response to the preceding IR to

assess the cost effectiveness of a particular program? Please discuss fully.

Response: Yes. PNG determines the cost effectiveness of each of its programs based on the net present value of the associated costs and benefits generated over the life of the installed energy saving measure.


6.0 Reference: Exhibit B1, Appendix F, PNG – PNG NE ECI, 2019 DSM

Plan, October 31, 2019, pages 13 – 14 and Exhibit B-1, pages 128 - 129

The first referenced pages state: Feedback on PNG’s energy efficiency programs:

Awareness of PNG energy efficiency programs is low. Only 17 percent of residential customers were aware of PNG’s low-income program prior to taking the survey. The lack of awareness was common to respondents in all regions, customer sizes, and household incomes. For commercial survey respondents, only six percent were aware of PNG’s Commercial Efficient Water Heater Program, three percent were aware of the Commercial Efficient Boiler Program, and one percent were aware of the Commercial Efficient Kitchens Program. There were no statistically significant differences in awareness by region or customer size.

Residential customer satisfaction with PNG’s efforts to help them use energy efficiently is very low, with only 11 percent of respondents satisfied, 49 percent neutral, and 30 percent dissatisfied. The remaining 11 percent were unsure how satisfied they were with PNG’s efforts – a response consistent with the low awareness of PNG residential energy efficiency programs. Customers in Fort St. John and Dawson Creek were somewhat more satisfied than their counterparts in PNG-West and Tumbler Ridge (mean satisfaction scores of 5.7 and 5.2, respectively).

Commercial customers’ satisfaction with PNG’s efforts to help their business or organization use energy efficiently is moderate, with 44 percent satisfied, 39 percent neither satisfied nor dissatisfied, 7 percent dissatisfied, and 9 percent unsure. Like that of residential customers, commercial customers in PNG-West and Tumbler Ridge were less satisfied with PNG’s efforts than their counterparts in Fort St. John and Dawson Creek.

The second referenced pages state:

This DSM Plan includes the results of the analysis of continued ECI programs and initiatives for:

Low income households;

Commercial businesses;

K-12 education program;

Post-secondary education program;

Outreach and Community Engagement;

Support for Codes and Standards Adoption;

Support for Innovations; and

Enabling activities.


6.1 Please explain fully why and how PNG-PNGNE expect that the instant proposal will address the general lack of awareness and lack of satisfaction with the utility’s current ECI efforts, especially in the residential (including low-income) sector.

Response: PNG has planned and budgeted for a communications plan and its implementation. Please see Section 10.4 (General Conservation Education and Outreach) of the 2019 DSM Plan as well as the response to BCUC 45.2.

6.2 Please identify any and all target metrics that PNG-PNGNE will monitor and

utilize in order to address the current residential lack of awareness and lack of satisfaction with the ECI.

Response: PNG has not yet developed metrics related to the assessment of customer awareness and satisfaction. While participation rates in PNG’s programs is an obvious metric, PNG could also consider monitoring traffic on its ECI web pages, the number of outreach activities PNG participates in, and feedback from smaller, low cost customer surveys.

6.3 Please identify when PNG-PNGNE intend to first report back to the BCUC and

interested parties regarding the progress made with respect to customer awareness and satisfaction problems regarding ECI, assuming the instant proposal is accepted as filed.

Response: PNG is required to file an Annual DSM report with the BCUC on or before April 30th of every year. This report presents the actual expenditures and participation in PNG’s established programs. PNG could report on customer awareness and satisfaction in the Annual DSM Report beginning in 2021 in order to allow PNG sufficient time to identify and collect the necessary information.


7.0 Reference: Exhibit B1, Appendix F, PNG – PNG NE ECI, 2019 DSM Plan,

October 31, 2019, page 33 - 35, and Table 13

7.1 Table 13 at page 35: ESK Program Summary indicates that the average per participant annual savings will be 2.70 GJ. Please provide the basis of this savings estimate, by measure.

Response: The average per participant annual savings of 2.70 GJ is consistent with the assumptions adopted by FortisBC Energy Inc. (FEI) in its DSM Plan 2019 – 2022 (p. 38, filed as Appendix A to FEI’s 2019-2022 DSM Expenditures Application). The savings per participant average is based upon 2017 actual participation in the FEI program. PNG notes that the assumption is also consistent with that in PNG’s 2019-2020 ECI Program Funding Application that was approved by way of Order G-121-19.

7.2 Please compare the ESK program measures as proposed by PNG to the ESK program measures offered to the customers of FEI.

Response: With the exception of FEI offering its customers a $25 coupon redeemable upon purchase of a furnace filter, PNG offers the same ESK program measures that FEI offers its customers.


The following is excerpted from the referenced material, at page 34: “The bundle of measures may include low-flow fixtures, water heater pipe wrap, caulking, draft proofing tape, outlet gaskets, and window film.” [Emphases added]

7.3 What exact products does the ESK contain? If the contents of the ESK

packages vary, please describe the criteria used by PNG to determine who gets what package.

Response: Please see the table that follows. PNG offers 4 different ESK packages. Kit configurations #1 and #2 are for customers residing in apartments while kit configurations #3 and #4 are for customers residing in single family dwellings and include an additional faucet aerator and high performance showerhead. Kit configurations #2 and #4 contain window film, which is supplied upon a customer’s request made during the application process.

Kit 1 Kit 2 Kit 3 Kit 4

Faucet aerators

(1.5 G.P.M. max) – kitchen 1 1 1 1

Faucet aerators

(1.5 G.P.M. max) – bath1 1 2 2

High-performance

Showerhead (1.5 G.P.M.)1 1 2 2

Teflon tape 1 1 1 1

Draftproofing (Adhesive foam ) 1 1 1 1

Draftproofing V tape 1 1 1 1

Outlet Gaskets

(10 light switches and outlets)1 1 1 1

Window Film per window 0 4 0 4

LED lamps (A19) 4 4 4 4

LED nightlight 1 1 1 1

Fridge Freezer thermometer 1 1 1 1

Energy Saving Kit

(2019)


The following are excerpted from the referenced material at page 33 and 34: “BC Hydro, PNG and FEI have partnered to offer this [ECAP] program to low income households, including renters.” “BC Hydro, PNG and FEI have partnered to offer this [ESK] program to low income households, including renters.”

7.4 Please provide the percentage of the ECAP program participants who have been renters in 2019 Actual (or the most recently available estimate for 2019 actuals).

Response: PNG does not receive information from BC Hydro on whether participants are renters. However, PNG does receive information on whether the ECAP service was delivered to either single family dwellings or condos and apartments. In 2019, 94 percent of the recipients of the ECAP program in PNG’s service territory resided in apartments.

7.5 Please provide the percentage of the ESK program participants who have been renters in 2019 Actual (or the most recently available estimate for 2019 actuals).

Response: PNG does not receive information from BC Hydro on whether participants are renters. However, PNG does receive information on whether the ESK’s were delivered to either single family dwellings or condos and apartments. In 2019, 16 percent of the recipients of the ESK’s in PNG’s service territory were delivered to apartments.


8.0 Reference: Exhibit B1, Reallocation of ECI Funding

8.1 Please discuss how the flexibility that PNG-PNGNE has under current approvals will be used to target the underperforming aspects of its ECI plan.

Response: In Order G-121-19, the BCUC approved the funding transfer rules proposed by PNG that allowed funding transfers of less than 25 percent of a Program Area’s budget from one approved Program Area to another approved Program Area without prior approval of the BCUC. Depending on the particular circumstances, PNG may elect to alter the incentive structure, or increase marketing of a program that is not meeting expectations on participation rates. Please see also the response to BCUC 45.2.

8.2 Please discuss how the flexibility that PNG-PNGNE has under current approvals will be used going forward to target sectors and areas in which awareness and satisfaction are sub-par.

Response: Please see the response to Question 8.1.

8.3 Does PNG-PNGNE agree that in the end state, to maximize the cost effectiveness of its plan, the benefit from the last dollar spent on each program should provide the same marginal (including non-energy) benefit?

Response: PNG agrees that the cost effectiveness is maximized when the marginal (i.e. incremental) cost per marginal benefit is the same across all programs. In practice, when considering non-energy benefits whose quantification is subjective, this outcome is more difficult to achieve in a clear and transparent manner. At this stage of its ECI program, PNG relies more heavily on its ECI Guiding Principles described in Section 4.2 of the 2019 DSM Plan to guide the development of its energy efficiency programs.


8.4 Does PNG-PNGNE agree that in the end state, total benefits can always be increased if dollars are re-allocated from programs and sectors of lower marginal benefit to programs and sectors of higher marginal benefit? If not, please explain fully.

Response: Yes, with the proviso that when considering non-energy benefits whose quantification is subjective, this outcome is more difficult to achieve in a clear and transparent manner.

8.5 Does PNG-PNGNE intend to monitor and report back when any particular program or sector spending has reached the point of diminishing marginal returns relative to alternative programs and sectors?

Response: PNG does not intend to monitor and provide this at this time. At this stage of its ECI program, PNG relies more heavily on its ECI Guiding Principles described in Section 4.2 of the 2019 DSM Plan to guide the development of its energy efficiency programs.

8.6 Does PNG-PNGNE employ any metric or rule of thumb with respect to determining when any particular program has matured?

Response: PNG does not employ such metric nor rule of thumb at this time.

verlon g. otto director, regulatory affairs email: votto@png · cod s and standards s 14,052 s...

Documents