Energy Efficiency Resource Standard

Program Description

Program Administration and Design

Utility energy efficiency programs under previous EEPS (2008- 2015) were oriented towards providing direct rebates and subsidies to promote energy efficiency technologies. The commission noted that while these programs have been successful to acquire energy savings as a resource, it envisions the post 2015 utility efficiency programs to be focused on market transformation efforts which would allow wide scale penetration and market acceptance of efficiency measures which would eventually eliminate the need for customer funded subsidies. 

The commission has provided flexibility to the utilities to design and implement the programs. Beginning 2016, the utilities are required to develop more innovative approaches to energy efficiency programs which may include rebates, but are more focused on market transformational efforts.

Cost Effectiveness and Program Evaluation

While implementing the energy efficiency programs the utilities will track their MWh and Dth savings targets, but will also track CO2 emission reductions, customer bill reductions, reductions in MWs, and private investment in energy efficiency technology and solutions as to measure the success of the program in terms of broad state wide energy policy goals provided in the Clean Energy Fund (CEF). The NY Technical Resource Manual (TRM) provides a standardized and transparent approach for calculating energy and demand savings from the energy efficiency programs. 

In January 2016, the PSC provided a framework to develop new Benefit Cost Analysis (BCA) as a part of REV that would be applied to energy efficiency and distributed energy resources, however, the PSC has retained that the total resource cost (TRC) test be the primary cost effectiveness test for energy efficiency. While the TRC can be applied to varying levels of granularity, the Commission requires the TRC to exceed 1.0 at a portfolio level analysis. 

Utility Cost Recovery Provisions

The costs for the programs are recovered through Energy Efficiency Tracker (EE Tracker) system benefit surcharge. As of February 2017, the PSC has not determined the utility performance incentives for post 2015 programs. The issue of utility performance incentives is being developed in the Track 2 of the NY REV proceeding.

The utilities in the previous EEPS program (2008-2015) were allowed a two-step utility performance incentive for reaching energy efficiency targets. The first portion of the incentive was based on the achievement of the utilities’ specific goals, and the second was based on collective utilities and NYSERDA’s achievement of reaching statewide efficiency targets. 

Self Direct Programs

In its February 2015 NY REV order, the PSC required the utilities to implement a self-direct program for large commercial and industrial customers that allows large customers to self direct funds that would otherwise support the utilities energy efficiency programs. On August 2015, the commission approved self direct program guidance document which provides framework for utilities to develop their self direct programs for qualifying customers. 

To be eligible for self direct program the customer must have at least 36 month average demand of 2 MW or greater, or customers with aggregated 36 month average demand of 4 MW or greater as long as one of the accounts has one month average of 1 MW.

Qualifying large industrial and commercial customers who pay the Energy Efficiency Tracker surcharge will have the opportunity to direct majority of their contributions to qualifying projects, with up to 15% allocated to support program administrative and verification expenses. The utility must allocate at least 50% of the three year average annual EE Tracker surcharge from qualifying customers. All the projects implemented in the self-direct program must pass the cost effectiveness tests, including an energy savings commitment in $/MWh that is at least 7.5% lower than the $/MWh of the utilities’ energy efficiency portfolio.

Low Income programs

The energy efficiency programs for low income customers are administered by NYSERDA through the EmPower program. The Empower program is funded by the Systems Benefits Charge. While NYSERDA is the default provider of low income programs, the utilities also have programs that provide energy efficiency services to low income communities in concert with NYSERDA programs.  

*The PUC initiated the REV proceedings on April 2015 following Governor Cuomo’s vision towards a comprehensive reform in the State’s power industry with a broad goal to align electric utility practice and the regulatory paradigm with the technological advances. The REV initiative seeks to create next generation of utility business models that is customer centric and is driven by technological innovation and private investments to provide resilient, affordable, and clean energy in the State. Other initiatives that are part of the REV include the Green Bank, NY Sun, and BuidSmart NY.