Accounting for Big Energy Efficiency in RTO Plans and Forecasts: Keeping the Lights on While Avoiding Major Supply Investments

摘要

States in several regions are investing in “Big EE”defined as energy efficiencyprograms with annual energy savings of around 2% or more of retail salesto meet significantportions of customer energy needs. Energy efficiency is the largest future energy resource inseveral states, and its share of the total resource mix is growing quickly. Regional TransmissionOrganizations (RTOs) in these regions are examining their planning practices to consider andaccount for the impacts of Big EE, now that energy efficiency is no longer background noise intheir forecasts. It is crucial to neither under-count nor over-count the impacts of Big EE: on theone hand, under-counting will lead to billions of dollars of unneeded supply and transmissioninvestments, thereby eliminating a portion of the economic value of the EE programs; on theother hand, over-counting the impacts will result in reductions in system reliability. Since thestakes are high, several RTOs are paying closer attention, although questions remain about theaccuracy and effectiveness of the revised RTO planning methods. In this paper we review thechanging planning and forecasting practices of RTOs in two regions that have substantial EEprograms by analyzing how RTOs: (1) treat EE in their forecasts, (2) forecast EE impacts infuture years beyond the time period covered by available EE plans, (3) distinguish energy vs.peak demand impacts, and (4) address the performance uncertainties and risks of future EE,including any discounting practices. We conclude with a summary of best practices to dateamong RTOs.