NormalizedMeteredEnergyConsumption(NMEC)Explained

JenniferBarnes,AESPCaliforniaChapterCarmenBest,Recurve

DavidJump,kWEngineering

May7,2020

Announcements•  AESPCaliforniaChapterBoardCallforNominations

–  2OpenPositions:VP,SouthernCalifornia&MembershipChairperson

–  Emailbio&letterofintenttoslipp@TRCCompanies.combyMay18th

•  UpcomingWebinar–  Wednesday,May20,2020:TRCversusPAC:Howto

ReformCost-EffectivenessforModernDSM

Today’sPresenters

•  CarmenBest,DirectorofPolicy&EmergingMarketsforRecurve

•  DavidJump.Ph.D.,P.E.,CMVP,DirectorforkWEngineering

AbbreviatedHistoryofNMECinCalifornia

CarmenBestDirector,Policy&EmergingMarkets

Recurvecarmen@recurve.com

5

NormalizedMeteredEnergyConsumption

“The energy efficiency savings and demand reduction . . . achieving the targets established pursuant to paragraph (doubling of EE by 2030) shall be measured taking into consideration the overall reduction in normalized metered electricity and natural gas consumption where these measurement techniques are feasible and cost effective.” Link: https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160SB350

SB-350 Clean Energy and Pollution Reduction Act of 2015. (2015-2016)

6

NormalizedMeteredEnergyConsumption

". . . increase the energy efficiency of existing buildings based on all estimated energy savings and energy usage reductions, taking into consideration the overall reduction in normalized metered energy consumption as a measure of energy savings. Those programs shall include energy usage reductions resulting from the adoption of a measure or installation of equipment required for modifications to existing buildings to bring them into conformity with, or exceed, the requirements of Title 24 of the California Code of Regulations . . ." Link: https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160AB802

AB-802 Energy efficiency.(2015-2016)

7

●  TheRulingwasmodeledaftertheregulatoryrequirementsforbehaviorprograms.

●  Intendedtoprovidemoretimelyinformationtocustomers,program

administratorsandregulatorsonperformancewithoutsignificantre-castingofsavingsonanexpostbasis.

●  Upfrontagreementandreviewofmethodsappropriatefortheprogram

andinsomecasesforthespecificproject●  Processofadviceletterreviewservedasthe“caselaw”documentingthe

detaileddirectionontheproposalsandmethodscomingfromtheCommission.

RulingonHighOpportunityProgramsandProjects-CPUC2015

CPUCResponseintheNMECRuling

PG&EResidentialPay-for-

Performance

•  FlexibilityPurchaseAgreement(FPA)•  3xKickerforsummersavingsfrom4pmto9pm•  PaymentsbasedonCalTRACK/OpenEEmeter 8

Resource Curve

Duck Curve

23% of Projects

9

2.5X Greater Savings

70% Fewer

Negatives

23% of Projects

10

2.7X Avoided GhGs

3x Avoided

Cost

ComparisonGroups-MacroAnalysis

NMECMeter-BasedChangesin

ConsumptionIntegratedDistributedEnergyResources(techneutralcontracts)

DistributionPlanningAdvisoryGroup(DPAG)(modelingassumptions)

EnergyEfficiencyPortfolio

(BusinessPlans)

IntegratedResourcePlan(CarbonOptimized)

DistributedResourcePlans(geographicneed)

Resource

MarketTransformationCodes&

Standards

DemandAnalysisWorkingGroup

(DAWG)

Shouldbe1stpriority P4P

WorkforceE&T

Non-Resource

DRIVE-Transportation

IEPR-CECLoadForecast

BUILD-TECHDecarbonization

SiloedRegulations&Programs

12

NormalizedMeteredEnergyConsumption

Site-LevelNMECDavidJump.Ph.D.,P.E.,CMVP

DirectorkWEngineering

djump@kw-engineering.com

NMEC–aNewApproach•  Ameter-basedapproachtoquantifyingsavings

–  Quantifiessavingsascustomersperceivethem:atthemeter–  RequiresmeterdatabeforeandafterEEMsinstalled–  AllowsP4P:Incentivespaidondemonstratedsavings

•  Deemedandcustomestimatesavingspriortoinstallation–  Subjecttomeasurecategoriesandrulesregardingbaselines

•  NMECestimatessavingspost-installation–  Existingconditionsbaseline

•  Site-levelNMECprovidesperformancefeedback–  Enablescorrectionofpoorperformance–  Promotessavingspersistence

OptionC–“AvoidedEnergyUse”

BaselinePeriod InstallationPeriod Post-InstallationPeriod

Energy

Time

Savings

Predictedbybaselinemodel:Whatbaselineusewouldhavebeen

1.Developmodel2.Predictuseunderpostconditions3.Estimatesavings

OptionC-NormalizedSavings

BaselinePeriod

InstallationPeriod

Post-InstallationPeriod

NormalConditionsPeriod(e.gCACZlongtermtypicalweather)

Predictedbybaselinemodel:Whatbaselineusewouldhavebeen

Predictedbypost-installmodel:Whatpost-installationusewouldhavebeen

NormalizedSavings

Energy

Time

AdvancedM&VAMI data:

Short time scale High volume

Greater access

Advanced analytics Automated processing

–  Fasterfeedbackonperformanceandsavings–  Higheraccuracyovermonthlybillinganalysis–  Captureofinteractiveeffects–  Time-of-dayandseasonalsavingsfeedback

AdvancedAnalytics•  Familiar

–  LinearOLSRegression

•  MoreAdvanced–  ASHRAERP1050Change-PointModels–  LBNLTemperatureandTime-of-WeekModel

•  Exotic–  NeuralNetwork–  GradientBoostingMachine–  RandomForest–  MuchMore..

AM&VTools•  ‘nmecr’https://github.com/kW-Labs/nmecr

–  TOWT,TOW,change-point,SLR,HDD-CDDmodels,Rpackage

•  EnergyChartingandMetrics(ECAM)www.sbwconsulting.com/ecam–  change-pointmodels,MSExceladd-in

•  RMV2.0https://github.com/LBNL-ETA/RMV2.0–  TOWT&GBMmodels,Rpackage

•  OpenEEMeterhttps://github.com/openeemeter/eemeter–  ImplementsCALTRACKmethods,Pythonpackage

•  UniversalTranslatorM&VAnalysismodulehttp://utonline.org/cms/–  TOWT,TOW,change-pointmodels,Desktopapplication

ModelGuidance•  BaselineModels

–  NMBE(biaserror)<0.5%–  CV(RMSE)(randomerror)<25%–  R2(explanatorypowerofind.vars.)>0.7–  Savings‘detectableabovemodelvariations’

•  Uncertainty(90%CI)<50%(ofsavings)

•  BestPractices–  Weathercoverage–  Linearrelationship–  Correctmodelspecification–  Normalityofresiduals–  Homoskedasticity

https://www.cpuc.ca.gov/General.aspx?id=6442456320

Example•  LinearOLSModel

•  Temperatureonly•  CV=25%

�  Advanced Model �  Temperature and Time-of-Week �  CV = 11%

CPUCRulebookSite-Level NMEC Requirements (partial list)

Existing buildings or similar use portions of industrial facilities

Target 10% or more savings - provide explanation how < 10% savings distinguishable from the noise

Customized to a particular site & its drivers of energy use

Full descriptions of methodology for calculating NMEC savings: analytical methods, software, data, sources, etc.

Documentation of expected costs, energy and demand savings

3-year maintenance plans for BRO measures

Weighted average EUL

Provide live calculations and data (provisions for submittal of proprietary software)

CPUC reviews are for early feedback and to inform evaluation

Site-LevelRisks•  Buildingnot‘predictable’

–  Energyusenotexplainedbyweatherorschedule–  Modelingalgorithmsinsufficient–  ToomanyNREs–  Addressedthroughpre-screening

Predictable Unpredictable

Site-LevelRisks•  Non-RoutineEvents(NREs)

–  ChangesinbuildingoroperationsunrelatedtoEEMs–  Addedorremovedload–  Detectionrequiresperiodiccheck-inormonitoring–  SavingsmustbeadjustedforsignificantNREs

Baseline Period Install Period Performance Period

1. Feasibility Report -  EEMs -  Expected savings & costs -  Weighted EUL -  Site-level M&V Plan

2. Installation Report -  Verify installed

EEMs -  Actual costs

3. Savings Report -  Per M&V Plan -  Raw data to final savings -  Live calcs provided

5. Progress Reports 4. Pre-Screen Report -  ‘Predictability’ -  Deep savings -  NREs

A Site-Level NMEC Process

What’sGreatAboutNMEC?•  Potentiallystreamlinesaccountingofsavings

–  MoreresourcesforfindingEEMs(&DERS!)

•  Motivatesparticipantstodomore

What’sGreatAboutNMEC?•  Feedbackonperformance

–  AssureEEMseffective–  Largerroleforenergymanagementtools(EMIS)

Grocery store during COVID period Compressor racks reaching full capacity (rare previously) - massive restocking?

Other‘Opportunities’model misspecification autocorrelation machine learning

Thank you! Questions? email djump@kw-engineering.com

indicator variables

COVID

PowerofPopulationNMECCarmenBest

Director,Policy&EmergingMarketsRecurve

carmen@recurve.com

30

Marketsarecomplex...

...enablesettlementatthemeter.

•  StandardM&VCalculationMethods

•  Monthly,Daily,andHourly

•  PublicStakeholdersEmpiricalProcess

•  www.CalTRACK.org

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•  PythonCalTRACKEngine

•  OpenSourceApache2.0

•  HowItWorks:https://goo.gl/mhny2s

•  CodeRepo:https://goo.gl/qFdW4P

RevenueGrade=Transparent,Consistent,Repeatable

33

ManageRiskacrossthePopulation&OptimizewithinthePopulation

34

ForMoreDetail:CPUCReleasesVersion2.0oftheMeter-BasedNMECRulebook

Pre-Defined&Consistent

Measurementmethodsandcalculationsoftwarearesetbeforetheprogramstarts(andnotsubsequentlychanged)andapplytoallsitesinauniformfashion

ProgramFitProgramsmustmeetthePopulation-levelNMECregulatoryandfilingrequirementsdescribedinthisdocument;

Population-LevelNMEC

Meter-BasedEnergysavingsdeterminationsaremadeusinganNMECapproachbasedonpreandpost-interventionenergyusagedataobservedatthemeter

PerformanceAccountability

Contractors

LoadServingEntity

PrivateCapital

PerformanceRisk

EfficiencyBusinesses

Utility

Measurement

ProjectFinance Insurance

Aggregators

Channels

Buildings

35

Planning/Evaluation

Regulatory

LoadForecast

StateEnergyOfficeorRTO

PopulationNMECM&VPlan&ComplianceChecklist

ImpactEvaluationSpecificationComparisonGroupMethods

-MatchingApproach&Criteria-StatisticalMetrics

BUSINESSMODELS

SavingsComfortHealth

3RDPartyProviders(aggregators)

ServicesandProducts

ConsumerFinance

ProjectFinance

SalesandMarketing

ContractorManagement

36

DEMANDFLEXIBILITY

MarketScalabilityasaResource

CarmenBestDirectorofPolicy&EmergingMarketscarmen@recurve.com

Q&A•  We’llunmutethelinessoyoucanaskyourquestionsverbally

•  Youmayalsopostyourquestionsinthechatbox

ThankyouforJoiningUs!•  Don’tforgetaboutourupcomingwebinar:

–  Wednesday,May20,2020–  TRCversusPAC:HowtoReformCost-EffectivenessforModernDSM•  AdamScheer,DirectorofCustomerSolutionsfor

Recurve•  MohitChhabra,SeniorScientist,Climate&Clean

EnergyProgramforNRDC

APPENDIXSLIDES

40

PopulationNMECM&VPlan&ComplianceChecklist

ImpactEvaluationSpecificationComparisonGroupMethods

-MatchingApproach&Criteria-StatisticalMetrics

"Proprietary Methods & Software: Savings measurementmethodsandcalculationsoftwarethatispublic,andespeciallythosethatareopen-source,benefitfromastakeholdervettingprocess that allows experts and practitioners to share theirknowledge and use updated information to inform savingsestimates.TheCommissionhassupportedthedevelopmentofpublic,open-sourceprocessestodevelopNMECmethods(e.g.CALTRACK) and encourages stakeholders to engage in theseopen-sourceinitiatives."p.18

RulebookforProgramsandProjectsBasedonNormalizedMeteredEnergyConsumption

Version2.0ReleaseDate:7January,2020

41

Reproducible Execution

Professional Guidance

Framework (2004)

TimeofWeek&Temperature

ModelProtocols

(2006)

IPMVP Option (C)

M&VProtocolsandstandards...

...enablesettlement.

42https://ww2.energy.ca.gov/

2019_energypolicy/documents/#08272019

2019EnergyEfficiencyPlan-DoublingEfficiency

-  “Develophourlyandlocationalaggregatedenergyconsumptiondatasets”

-  “DevelophourlyenergyefficiencysavingsestimatesfromintervalmeterdatatoverifyandforecastSB350targets.”

-  “Stateagenciesshouldcollaborate...dataanalytics,warehouses,modelingmethods,etc.”

-  “developabilitytoincorporateaggregationsofenergyefficiencyanddemandresponseprogramsintolongtermplanning”

-  “incorporatemeter-basedanalysisintopotentialstudiestoidentifycosteffectivesavingspotential.”

“With current savings projections, the state is missing the 2030 goal in terms of avoided GHG emissions.” p4

43

EfficiencyFeedbackloop-StatusQuoGoals&Potential

MeasurebasedanalysisTechnologycostsdriver

EvaluationHighimpactmeasures

Deemedestimateupdate

Implementation/TrackingMeasurebaseddeploymentFixedLoadshape

Program/BusinessPlansMeasureBasedProgramsCEPortfoliooptimization

-Savingsgoals-Measure-based-Portfoliodefault

+Meter-based+PayforPerformance

+Thirdparty%

+Non-Utilityprograms

+Markettransformation+Decarbonization+Holisticanalysis+Fasterturnaround

+"Topdown"

+NMECPotential

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EfficiencyFeedbackloop-Reinvisioned

LocalizedPotentialActuarialconsumption

Marginalprice

EvaluationValidation/Verification Implementation/Tracking

Meter-based/TimeValuationActualLoadshapeReporting

Program/BusinessPlansCarbonoptimizationLocalizedResourceProcurementPlan

+AvoidedCostGoals+Meter-based+Procurement