STRATEGIC ENERGY MANAGEMENT MATURITY MODEL

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January 30, 2014

STRATEGIC ENERGY MANAGEMENT MATURITY MODEL Prepared by: EnerNOC Utility Solutions 500 Ygnacio Valley Road, Suite 450 Walnut Creek, CA 94596 Northwest Energy Efficiency Alliance PHONE

503-688-5400 FAX

503-688-5447 EMAIL

[email protected]

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ii Northwest Energy Efficiency Alliance

This paper was prepared by: EnerNOC Utility Solutions 500 Ygnacio Valley Blvd., Suite 450 Walnut Creek, CA, USA 94596 Principal Investigators: Chad Gilless Richard Hart Tulsi Shah This paper received expert input from the following persons: Charlie Grist, Northwest Power and Conservation Council, USA Kevin Wallace, BC Hydro, Canada Jess Burgess, Consortium for Energy Efficiency, USA Finally, the Northwest Energy Efficiency Alliance’s (NEEA) Emerging Technology team provided input, with principle input from: Nick Leritz And additional input from: Jeff Harris Mark Rehley John Wallner The paper was prepared on behalf of NEEA and should be cited in literature as follows: Strategic Energy Management Maturity Model, Northwest Energy Efficiency Alliance. Portland, OR. 2013. Copyright © 2013 Northwest Energy Efficiency Alliance. All rights reserved

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Northwest Energy Efficiency Alliance iii

TABLE OF CONTENTS

1 SUMMARY ................................................................................................................................. 1

2 INTRODUCTION ......................................................................................................................... 1

3 DETAILS OF THE SEM MATURITY MODEL ................................................................................... 3

4 USING THE SEM MATURITY MODEL ......................................................................................... 15

APPENDIX – SUMMARY OF THE RESEARCH .................................................................................. 16

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Strategic Energy Management Maturity Model 1

1 SUMMARY Strategic Energy Management (SEM) is, broadly speaking, a systematic approach to delivering persistent savings based on executive commitment, energy goals, and performance indicators. With SEM, organizations integrate energy into business practices in the same way that they have integrated quality or safety. SEM activity is just beginning to take off in North America, but no consensus or standards have been developed regarding levels of implementation or even what basic components should be included within SEM activities. In this paper, we describe some of the problems that this lack of standardization has created for NEEA, utilities, regulators, and end-use customers. We then lay out a comprehensive maturity model matrix of SEM components and levels of implementation that addresses these problems. Finally, we suggest immediate next steps for application of the maturity model. The model is intended to apply to a wide-range of organizations in the commercial, industrial, and institutional sectors. The intended audience for this document includes but is not limited to:

NEEA staff who wish to accelerate the adoption of SEM and thereby increase savings from business and institutional customers

Program planners and designers at NEEA's funding utilities and agencies who are looking to improve the design and delivery of their SEM programs by leveraging efforts across the industry in a reliable way.

Program planners at other utilities across North America who have similar needs Program managers at utilities who are looking to control costs with repeatable

elements from other SEM programs and with standardized evaluation procedures. Business and institutional customers who are interested in standardizing SEM at

facilities across the enterprise Regulators who are looking for clarity on how to compare proposed SEM programs

with existing programs in other jurisdictions

2 INTRODUCTION Utilities across North America are rolling out a variety of programs to encourage organizational changes that will provide increased energy efficiency at the facilities of their commercial, institutional, and industrial (C&I) customers. For purposes of this paper, we use the term Strategic Energy Management as an overarching label for this program category, with specific utilities naming their programs Continuous Energy Improvement (CEI), Process Efficiency, Industrial Energy Improvement, and High Performance Energy Management (HPEM), among others. These programs encourage a broad set of activities, such as recruitment of energy managers, target setting, energy monitoring, and employee/occupant engagement. In most cases, these programs are in the early stages of development, reaching a limited set of the possible customers to whom these initiatives might apply. A few programs have successfully completed four to five years of deployment. The relative newness of SEM programming results in widely varying ideas of what specifically constitutes an SEM implementation at a C&I facility or organization. There is the International Organization of Standardization (ISO) Standard 50001, released in 2011,

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2 Strategic Energy Management Maturity Model

which is based on a continuous improvement model similar to that of other ISO standards for quality improvement and environmental management. However, this standard sets a high bar for organizations and facilities and has not seen widespread adoption yet. In some ways, the situation is analogous to how the term “energy audit” was inconsistently used prior to 2004, when the American Society of Heating, Refrigeration, and Air Conditioning Engineers (ASHRAE) stepped in to create a formal definition of three audit levels based on audit depth and rigor.1 Having these standardized definitions available has reduced confusion within the industry so that all of the various players (building and facility owners, utility program implementers, audit practitioners, and regulators) can understand what will be delivered by each of the audit levels. For SEM, the lack of agreed-upon definitions and levels leads to the following problems:

Utility program planners are frequently "reinventing the wheel" because there is no ready-made list of SEM components

Program designers cannot leverage best practices from their colleagues because programs are so different that it is hard to benchmark success

Utilities pay higher implementation costs because service providers cannot fully leverage their investment in previous programs

Utilities pay higher evaluation costs because each program and evaluation approach is unique

Market actors across the region face a lack of clarity on the state of SEM market adoption and what future opportunities might exist

Market actors across the region and nationally are unable to clearly understand the extent to which the SEM market is being transformed

Customers with facilities across multiple utility service areas are encouraged to practice wholly different elements of SEM within the same organization with no cohesion behind these elements

Regulators have less faith in delivered energy savings due to the lack of consistency between programs across jurisdictions (compare the relative ease with which residential behavior programs have spread based on common elements of paper reports, web-based tools, and programmable thermostats)

To help address this lack of a common language regarding SEM implementation and customer required actions, this white paper lays out a maturity model, of SEM components and levels that can be used to provide solutions to the above problems. The model is based on (1) research into SEM programs, (2) research on other frameworks or matrices used to gauge levels of engagement or maturity of process, and (3) experience of how C&I organizations implement SEM within their own facilities. The model provides a tool that can be used for program planning, program design and implementation, and program evaluation. The balance of this white paper describes the elements of the model, how it was developed, and its possible applications. This white paper does not address program implementation questions such as: market segmentation, market sizing, deployment models, or incentive structures. Rather, it establishes some initial foundational concepts, from which those program implementation questions can be answered and programs can be designed.

1 ASHRAE defines audit levels as I – Walk-Through Analysis, II-Energy Survey and Analysis, and III-Detailed Analysis of Capital-

Intensive Modifications. See www.ashrae.org/File%20Library/docLib/Technology/FAQs2012/TC-07-06-FAQ-95.pdf.

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3 DETAILS OF THE SEM MATURITY MODEL The SEM Maturity Model builds on two significant efforts to establish SEM components:

The ISO 50001 Standard mentioned above which describes a fully functioning organizational energy management system (EnMS)

The Minimum Elements of Strategic Energy Management for the industrial sector, laid out by the Consortium for Energy Efficiency (CEE). The CEE document is in draft form as of this writing, with expected completion in early 2014.

The model itself is visually displayed as a grid, as shown in Table 1. The columns show the level of SEM engagement, while the rows include the components of energy management. As one moves across the table from left to right, the level of engagement in the SEM process increases, as indicated by the column labels:

0 Unengaged — the organization has not paid serious attention to its energy use and has no established energy policies or formal processes

1 Engaged — the organization is more seriously engaged with energy management: formal processes are emerging and basic measurement is in place

2 Systematic — the facility has made a formal commitment to energy management and works to systematically manage energy using core process components

3 Sustaining — the organization has a comprehensive system and is demonstrating ongoing improvement

4 Integrated — the organization has a documented and integrated management system elements that support continuous improvement

5 World Class — the organization goes beyond the minimum requirements of existing standards to incorporate all elements of SEM best practices, such as setting stretch goals and communicating performance broadly

Note that in this listing we use the term “organization” for the scope of energy management. However, energy management is often applied at the facility or building level, across multiple facilities, or across specific parts of a facility as well. The energy management components are as follows:

Management Commitment — the involvement of executives and senior managers in promoting and deploying energy management

Resources (financial, human) — the organizational resources that are engaged with energy management, such as budgets, energy leaders, energy teams

Energy Review and Analysis — the regular assessment of energy consuming activities in the facility

Energy Key Performance Indicators (KPIs) and Targets — the definition and use of strategically relevant metrics of energy consumption and waste

Action Plans — specific plans related to energy management Operations and Maintenance — the ongoing attention to energy during regular

business operations Monitoring and Analysis — the monitoring of energy consumption at the appropriate

level and the continuing analysis of data Employee Engagement — the degree to which employees across the organization

concern themselves with energy consumption Regular Reporting, Review, and Reassessment — the information flow across the

organization and the periodic adjustments in response to new strategy or new information

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Procurement and Design — the inclusion of energy consumption as a criterion in the purchasing of equipment and supplies, and in the design of new facilities, equipment, or processes

Documentation and Records — the record-keeping associated with reducing re-work and identifying improvement areas; the documentation of operational processes and the management system

Energy Management System Audits — the periodic assessment of the entire management system for energy

Consider for example the first program component, Management Commitment, which appears in the first row of Table 1. At the 0 — Unengaged maturity level, the organization has no energy policy whatsoever. The 1 — Engaged level would apply when an organization has an informal energy policy, perhaps at the facility level, but upper management has not been involved in creating a policy that applies across the entire corporation or institution. As we look across the columns, we see increasing high-level management involvement in creating, prioritizing, monitoring, evaluating, and regularly revising the energy policy.

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Table 1. SEM Maturity Model

Component 0

Unengaged 1

Engaged 2

Systematic 3

Sustaining 4

Integrated 5

World Class

Management Commitment

No commitment to energy management

Sporadic interest in energy control

Management has expressed verbal support for energy management activities

Informal policies exist

Top management sets and communicates energy policy and goals

Formal energy policy exists

Energy management vision is defined and communicated

Energy policy includes commitment to continual improvement and is updated annually

Energy policy discussed and updated annually

All Level 3 components + Top management establishes, implements

and maintains an energy policy Top management ensures policy:

o is appropriate to nature/scale of organization’s energy use

o commits to ensure information availability and resource adequacy to achieve goals

o commits to comply with legal/subscribed2

requirements o provides framework to set and achieve

goals o supports the purchase of efficient

products/services and design for energy performance improvement

o is documented and communicated at all organization levels

o is regularly reviewed and updated as necessary

All Level 4 components + Energy policy is an organizational

priority and is referenced in annual reports

Executive officer appointed to chair energy team

At least some top management performance goals include energy goals

Top management commits to long term goals appropriate to the organization’s opportunities

Policy adds additional management commitments: o Alternative energy

sources/technologies o Reduced carbon footprint o Supply chain energy management

Resources (financial, human)

No resources assigned to energy management

Individuals are tasked with energy management but without formal coordination

Budgets can include items for energy management but it is not a consistent priority

Individual or team has responsibility / accountability for implementation

Sufficient resources provided to attain goals

Energy team meets at least monthly

Sufficient resources provided to maintain efforts for more than a year, but not necessarily to improve to “the next level”

Competency is evaluated in “reactive” way, after person(s) in energy-related position

All Level 3 components + Top management appoints appropriately

skilled/competent champion and approves energy team formation (champion identifies team personnel)

Top management provides resources needed to establish, implement, maintain and improve EnMS and resulting performance

Champion defines and communicates responsibilities and authorities

Persons related to Significant Energy Uses (SEUs) are competent based on education, training, skills, or experience; identify needs and take action on needs associated with EnMS operation and SEU control

All Level 4 components + Organization has trained / hired one

or more certified energy professionals in past three years

Certified energy professionals responsible for, and are active in, organizational energy management activities

2 The term “subscribed requirements” covers such items as voluntary industry standards (e.g. FSC for paper), national certifications (e.g. LEED), or customer purchasing standards (e.g. Walmart’s

Supplier Energy Efficiency Program)

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Component 0

Unengaged 1

Engaged 2

Systematic 3

Sustaining 4

Integrated 5

World Class

Energy Review and Analysis

No review and analysis

Facility has undergone an equipment assessment

Energy bills are focus of energy review

Comprehensive review of energy use, consumption, and costs that includes significant drivers

Top management considers energy performance in long-term planning

Significant Energy Uses (SEUs) have been identified

Top management is the audience for energy review / planning, not just the team leader

Analysis has led to action plans

All Level 3 components + Top management identifies EnMS scope

and boundaries Champion ensures energy management

planning activities support organization’s energy policy

Energy planning : o involves review of organizational

activities that affect energy performance o is consistent with policy o leads to energy performance

improvement activities Organization implements energy-related

legal requirements: o management determines how

requirements apply to energy o management ensures that requirements

are considered in the EnMS o requirements are reviewed at defined

intervals o management checks compliance with

requirements at planned intervals Organization develops, records and

maintains an energy review which includes: o Analyzing energy from measurement /

data (current energy sources, past/present use)

o Identifying SEUs by identifying facilities, equipment, systems, processes and personnel that significantly affect energy

o Identifying relevant variables affecting SEUs

o Determining current energy performance of facilities, equipment, systems and processes related to SEUs

o Estimating future use o Identify, prioritize and record

performance improvement opportunities Energy review updated at defined intervals

and in response to major facility, equipment, system, or process changes

All Level 4 components + Energy balance document details

system energy consumption for 90%+ of total facility energy consumption

SEUs designated for 50-80%+ of total facility energy consumption

Strategic plans establish and address energy management priorities and provide resource allocations consistent with priorities

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Component 0

Unengaged 1

Engaged 2

Systematic 3

Sustaining 4

Integrated 5

World Class

Energy Key Performance

Indicators (KPIs) and

Targets

No Energy KPIs and targets

Baseline of energy consumption is established

Energy consumption is tracked and informal goals are set

Baseline of energy use, consumption, and cost is established and regularly compared to actual performance going forward

Formal goals set Energy

performance is tracked against baseline

Energy (use and) consumption converted to KPIs that are normalized for drivers

KPIs and targets re-assessed periodically to ensure that they align with current business and energy drivers

If necessary, baseline and KPIs adjusted to account for [major] events (e.g. process changes and stoppages)

All Level 2 components +

Targets set for each KPI

Objectives/targets exist, but are not as in-depth and fully aligned with significant energy uses, policy or other items as identified in energy review and analysis

All Level 3 components + Top management ensures goals

established Organization establishes, implements and

maintains documented energy objectives and targets at relevant functions, levels, processes, or facilities

Time frames established for achieving objective / target

Objectives / targets align to policy, and targets consistent with objectives

Objectives / targets established and reviewed while accounting for: o legal requirements o SEUs o energy performance improvement

opportunities o financial/operational/business conditions o technological options o interested party views

Top management ensures KPIs appropriate to organization

Baseline established using info from initial energy review, considering suitable data period for energy use; energy performance changes measured against baseline

Baseline is maintained, and adjusted when: o KPIs no longer reflect energy use o Major changes to process, operational

patterns, or energy systems Baseline adjusted by a predetermined

method KPIs identified as appropriate for

monitoring and measuring performance Organization records and regularly reviews

methodology for determining / updating KPIs

KPIs reviewed and compared to baseline as appropriate

All Level 4 components + KPIs embedded in organizational

scorecard Anomalies on each SEU are tracked

and investigated at least monthly

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Component 0

Unengaged 1

Engaged 2

Systematic 3

Sustaining 4

Integrated 5

World Class

Action Plans

No action plans

Action plans created to meet informal goals

Plans implemented but with inconsistent follow-through

Action plans created to meet formal goals for one or more years and include processes, programs, and projects (both capital and O&M)

Action plans include: o Savings

assessment o Financial

assessment o Priority and

timeline for projects

Action plans reviewed to ensure prioritized measures completed within timelines.

Planned measures re-assessed periodically to ensure that they are relevant for current practices


Action plans have been proven through use and have been refined as necessary

Results verified against plans

Management plays a significant role in developing action plans

All Level 3 components + Action plans to achieve objectives / targets

are established, implemented, maintained, and updated at regular intervals

Action plans include: o Designation of responsibility o Means/time frame by which targets are to

be achieved o Description of method for verifying

results and for verifying energy performance improvement

All Level 4 components + Plans endorsed by top management

and align with organization’s energy policy

Organization consistently monitors, measures, and analyses the effectiveness of action plans

Entire organization assessed on performance against plan

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Component 0

Unengaged 1

Engaged 2

Systematic 3

Sustaining 4

Integrated 5

World Class

Operations & Maintenance

(O&M)

O&M depart-ments do not consider energy

O&M staff adopt low- and no-cost energy savings measures when found, but persistence strategies not established

Changes made to standard operating procedures (SOPs) to ensure that operational changes to reduce energy waste are persistent

O&M activities included in action plans

Operational controls are communicated to relevant personnel


Energy related O&M activities are assigned to a group of personnel (e.g. maintenance), but not to larger employee base

All Level 3 components + Champion determines criteria and

methods to ensure effective EnMS operation and control

O&M activities related to SEUs are identified, planned and carried out by: o establishing and setting criteria for

effective O&M of SEUs, where lack could lead to significant energy performance deviation;

o applying operational criteria to O&M of facilities, processes, systems and equipment

All Level 4 components + O&M staff identify preventive /

predictive maintenance activities that improve efficiency associated with SEUs

Maintenance activities are managed in a maintenance system and completed as scheduled

Control systems are regularly monitored to ensure optimal operations

O&M staff o actively seek low- and no-cost

energy savings measures o have specific energy goals within

the organization

Monitoring & Analysis

No monitoring and analysis

Energy consumption and costs are occasionally checked, but only at facility level

Employees track energy savings (incl. costs) when time permits

Key factors that influence energy consumption are measured and normalized

Energy consumption and KPIs monitored and analyzed

Energy data stored consistently across the organization and in easily accessible formats

Where necessary, facility installs permanent submetering of key processes


Employees assigned to acquire / analyze energy data

Measurement needs incorporated into planning (e.g. purchasing/installing submeters)

Through experience, organization understands opportunities to improve data acquisition and analysis

All Level 3 components + At planned intervals, staff monitor,

measure and analyze key characteristics of operations that determine energy performance, including: o SEUs and other energy review outputs o Relevant variables related to SEUs o KPIs o Action plan effectiveness in meeting

objectives / targets o Evaluation of actual versus expected

consumption Organization defines and implements

energy measurement plan, appropriate to organizational size and complexity and its monitoring / measurement equipment

Organization defines and periodically reviews measurement needs; ensures monitoring / measurement equipment provides accurate/repeatable data; maintains calibration records

Staff investigate and respond to significant performance deviations

All Level 4 components + Submetering in place for processes

and equipment that are significant energy users

All relevant staff trained on common energy analysis tools and procedures

Energy team plans for monitoring & analysis needs across all facilities in the organization

Staff regularly analyze measurement / monitoring equipment to improve data accuracy

The organization and/or facility has an information system that captures energy use, energy cost and energy drivers (e.g. production, occupancy)

The information system is accessible to all relevant staff

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Component 0

Unengaged 1

Engaged 2

Systematic 3

Sustaining 4

Integrated 5

World Class

Employee Engagement

No employee engagement

Motivated employees are engaged in energy management

Employees get regular communication about performance against energy goals.

There is a formal employee awareness and internal communications plan

Employees understand how their actions can impact energy use

Employees empowered to take action on energy management

Employee ideas about improvement in energy management are actively solicited


Employees are familiar with energy policy, KPIs and targets

Employees understand how their actions can impact achievement of energy targets

All Level 3 components + Top management communicates energy

management importance to organization Champion promotes awareness of energy

policy and objectives at all organization levels

Staff aware of: o importance of policy, procedures and

EnMS requirements o roles, responsibilities and authorities in

achieving EnMS requirements o energy performance improvement

benefits o actual and potential impact of their

activities on energy use and how their behaviors contribute to energy objectives / targets

o potential consequences of departures from procedure

Organization communicates internally regarding energy performance and EnMS

Organization establishes and implements process for EnMS comments/suggestions

Organization decides whether to communicate externally about policy, EnMS, and energy performance; if it communicates externally, organization establishes and implements an external communication method

All Level 4 components + Organization goals are broken down

to specific employee goals; relevant employees have energy goals in personal objectives.

Employees periodically take time from standard jobs to investigate energy savings opportunities (e.g. energy kaizen events)

Employee improvement ideas about improvement in energy management are recognized and rewarded

Organization routinely communicates with community regarding energy use

Organization provides general energy efficiency opportunity information to employees for use in non-work environment

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Component 0

Unengaged 1

Engaged 2

Systematic 3

Sustaining 4

Integrated 5

World Class

Regular reporting, review and

reassessment

Management pays no attention to energy

Management checks in on energy consumption during annual budget cycle

Individual or team regularly reviews performance against plans and sets appropriate course correction for continuous improvement

Energy performance and achievements regularly communicated to stakeholders as appropriate


Individual or team leads a regular (e.g. annual) formal review of energy performance results and plans for coming year(s)

All Level 3 components + Top management ensures results

measured and reported at determined intervals

Top management conducts management reviews

Champion reports energy and EnMS performance to top management

At planned intervals, top management reviews EnMS to ensure suitability, adequacy, and effectiveness; inputs include: o Previous management review follow-up

actions o Review of energy policy o Review of energy performance and KPIs o Results of evaluation of compliance with

legal/subscribed requirements o Status towards objectives/targets o EnMS audit results o Status of corrective and preventive

actions o Following period’s projected energy

performance o Improvement recommendations

Management review outputs include decisions and actions related to: o Energy performance changes o Energy policy changes o KPI changes o Changes to objectives/targets or other

EnMS elements to support continual improvement

o Resource allocation changes

All Level 4 components + Executive officer reviews energy

team's activities on a regular basis Energy reporting and review is a

regular responsibility of all units of the organization

Management review includes input from employees/stakeholders on energy projects and EnMS processes

Management review includes review of SEUs and SEU significance

Each organizational functional area has team or management member involved in management review

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Component 0

Unengaged 1

Engaged 2

Systematic 3

Sustaining 4

Integrated 5

World Class

Procurement & Design

Procurement and facility design do not take energy into account

Energy consumption is brought into procurement and facility design only if motivated staff make it happen

[Not specifically addressed by CEE. We propose the following elements.]

Energy consumption is taken into account for capital purchases when incentives or rebates are identified

Energy consumption is brought into procurement and facility design on a regular basis but is not a priority

Specific procedures in place for procurement of services, products and equipment that can have significant energy use impact: o Suppliers informed that energy

performance is part of evaluation o Criteria set up to assess energy use over

the expected operating lifetime Energy purchasing criteria are specified to

ensure effective energy use Energy performance improvement

opportunities are considered in the design of new, modified and renovated facilities, equipment, systems and processes that can significantly impact energy performance

Results of energy performance evaluation are incorporated where appropriate into specification, design and procurement activities

All Level 4 components + Facility design and procurement staff

are part of the energy team Procurement works with O&M staff

to ensure efficiency goals are met Onsite energy generation is

considered alongside purchased utility energy, as appropriate

Financial metrics for energy projects account for long-term energy savings

For major upgrades, identify energy efficient features, analyze savings, and include these as appropriate

Institute policies that take energy efficiency into account in repair/replacement decisions

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Component 0

Unengaged 1

Engaged 2

Systematic 3

Sustaining 4

Integrated 5

World Class

Documentation and Records

No documentation of energy management

Organization documents its projects in an ad-hoc manner

Organization begins to record energy use, consumption, and costs.

[Not specifically addressed by CEE. We propose the following elements.] The organization documents or keeps records of the following: Energy Policy Energy goals Breakdown of

energy use, consumption, and costs

Baseline (for subsequent adjustment) and all related data

Plan of processes, programs and projects to be undertaken in coming year

Employee awareness program and internal communica-tions plan

Regularly reporting on attainment of plans, performance results, and achievement of goals

All Level 2 components+

Energy-related documents continually refined for ease of use and to provide clear information to guide actions

All Level 3 components + Energy management system is

comprehensively and consistently documented

Documents include: o Planning process o Scope/boundaries of the EnMS o Energy policy o Energy objectives/targets and action

plans o Method used to develop energy reviews o Action plans o Decision on whether to communicate

externally regarding policy, EnMS and energy performance

o Energy purchasing specifications, as applicable for effective energy use

Records include: o Energy review o Opportunities for performance

improvement o Baseline o Methodology for determining/updating

KPIs o Competency and training records o Results of design activity o Results of key characteristic monitoring

and measurement o Calibration records o Results of evaluation of compliance with

legal/subscribed requirements o EnMS internal audit results o Corrective and preventive actions o Management review

Documents required by the EnMS are controlled: o Approved for adequacy prior to issue o Periodically reviewed and updated as

necessary o Changes/current revision status identified o Relevant versions available as needed o Obsolete documents removed

Energy records are identified, legible, traceable to the relevant activity, and easily retrieved

All Level 4 components + Organization defines and

implements record identification, retrieval, retention, legibility, and traceability

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Component 0

Unengaged 1

Engaged 2

Systematic 3

Sustaining 4

Integrated 5

World Class

Energy management system audits

[Not specifically addressed by CEE. We propose the following elements.] Organization has

rated current practices with an Energy Management Assessment (EMA) or performance scorecard

Practices subsequently reassessed using an EMA or performance scorecard

Organization regularly reviews attainment to plans, sets appropriate course correction for continuous improvement

Organization reassesses minimal management system elements (goals, metrics and planned measures) to ensure they align with current business and energy performance drivers

Organization utilizes root cause analysis (RCA) approaches to understand reasons for EnMS non-performance, and then takes appropriate action.

All Level 3 components + At planned intervals, conduct internal

EnMS audits to ensure ISO conformance, conformance with objectives/targets, effective implementation & maintenance, and energy performance improvement

Audit plan and schedule is established considering status & importance of auditable processes/areas and previous audit results

Objective auditors selected Audit results maintained and reported to

executives Address actual/potential nonconformities

by: o reviewing nonconformities o determining nonconformity causes, o evaluating need for corrective and

preventive action (CAPA) to ensure non-occurrence

o determining and implementing appropriate CAPA

o maintaining CAPA records o reviewing CAPA effectiveness

CAPAs appropriate to magnitude of actual/potential problems and energy consequences

Ensure necessary EnMS changes made

All Level 4 components + Use preventive actions as input into

energy projects by using real-time data trends, energy review updates, and supplier data trends

Results of EnMS audits are consistently used to improve energy management

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4 USING THE SEM MATURITY MODEL The maturity model developed under this research, and detailed in Table 1, provides a comprehensive model to align and benchmark energy management offerings. By standardizing the language that we use to discuss programs, all parties can gain a clearer view of what steps are involved in energy management. From the utility perspective, staff can initially use the model to build out market assessments and adoption curves. They can then employ the model as a basis to design, implement, and evaluate energy management programs. For instance, a utility program designer could create one program aimed at moving customers toward level 2 — Engaged. Such a program might be largely educational, with workshops or other services aimed at encouraging customers to begin the process of formally creating energy management plans, monitoring, and assessment. A higher-tier program could incorporate the elements in Level 4 — Integrated, and be geared toward supporting customers to become ISO 50001 compliant. Such a program could provide consulting services and financial incentives for verified savings. Evaluators would have differing expectations of how to evaluate the programs and what savings each could provide. Programs could be more readily benchmarked against achievements of and best practices within comparable programs. For other parties, the model is useful as well. Adoption of this sort of maturity model would enable regulators to better distinguish among varying offerings. It provides a means for customers to understand the differences between the levels of engagement. This is particularly valuable for organizations with multiple locations spanning various utility service territories or regulatory jurisdictions.

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16 Strategic En

APPENDIX – SUMMARY OF THE RESEARCH To develop the model, the project team looked at a range of similar models used to rank process optimization, process maturity, and/or participant engagement. Among the models that we reviewed were the following:

Carbon Trust Energy Management Matrix and Energy Management Assessment — Carbon Trust has created an Energy Management Matrix that uses five levels and “gives a quick high-level assessment of strengths and weaknesses” for six components. http://www.carbontrust.com/resources/guides/energy-efficiency/energy-management http://www.carbontrust.com/media/13187/ctg054_energy_management.pdf http://www.carbontrust.com/media/226647/ctx614-em-self-assessment-tools.xlsx

ENERGY STAR Energy Management Matrix — The U.S. Environmental Protection Agency (EPA) ENERGY STAR Energy Management Matrix allows users to rate their level of engagement in seven energy management activities. http://www.energystar.gov/buildings/tools-and-resources/energy-star-guidelines-energy-management http://www.energystar.gov/buildings/sites/default/uploads/tools/Energy_Assessment_Matrix_06022011.xls

U.S. EPA Assessment of Current Energy Management System — Another EPA tool provides a table that scores ten energy management “topics” at levels 1–5. http://www.epa.gov/region6/water/energymgt/assessment_current_energy_mgt_system.pdf

ISO 50001 Standard — ISO 50001 is based on a continuous improvement model. Organizations wishing to be certified under ISO 50001 must meet requirements in seven broad areas: General requirements, Management responsibility, Energy policy, Energy planning, Implementation and operation, Checking, Management review. http://www.iso.org/iso/home/standards/management-standards/iso50001.htm

Superior Energy Performance (SEP) — SEP was developed by the U.S Department of Energy (DOE) and the U.S. Council for Energy-Efficiency Manufacturing, It draws upon ISO 50001 but establishes a two-tier program — Energy Performance Pathway and Mature Energy Pathway — to accommodate companies’ varying maturity levels of energy management programs. http://www.superiorenergyperformance.net/index.html http://www.superiorenergyperformance.net/pdfs/SEP_Overview.pdf http://www.superiorenergyperformance.net/qualify.html

Capability Maturity Model Integration (CMMI) — This process improvement certification program was developed at, and is managed by, Carnegie Mellon University. CMMI divides processes into five maturity levels: Initial, Repeatable, Defined, Quantitatively Managed, and Optimizing. Although initially applied to software engineering and development, it is now applied to a wide range of other activities including manufacturing, service delivery, and procurement. http://cmmiinstitute.com/

Colorado Department of Public Health Hazard Analysis Toolkit and Environment Risk Assessment Planning Matrix — Developed to help health care facilities assess their emergency preparedness, this matrix uses three levels: high-, medium-, and low-risk. Along with the three risk levels, there is also ranking based on federal and state priorities. The criteria or components assessed include specific hazards, such as wildfire, drought, tornado, and flood; facility-specific components such as staffing shortages, food shortage, missing residents; and readiness planning components, such as emergency operations plans, checklists, procedures, safety

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kits, and the like. http://www.colorado.gov/cs/Satellite?blobcol=urldata&blobheadername1=Content-Disposition&blobheadername2=Content-Type&blobheadervalue1=inline%3B+filename%3D%22Hazard+Analysis+Toolkit.doc%22&blobheadervalue2=application%2Fmsword&blobkey=id&blobtable=MungoBlobs&blobwhere=1251810096774&ssbinary=true

Sustainability Appraisal of Alternative Options for Proposed Development Management Policies — The Appraisal Framework developed by the Poole Borough Council in the UK evaluates the sustainability of development proposals. The score reflects the degrees of impact and ranges from -2 for high adverse impact to +2 for high positive impact. Proposed developments are rated in a matrix that considers various topics in one dimension (e.g., design, shopping, heritage assets, and tourism) against previously established core strategy objectives in the other dimension (e.g., revitalize the town center, meet housing needs, nurture economic development, protect natural environment, and other goals). Within this matrix, items are further divided according to whether or not a policy has been put in place. http://poole-consult.objective.co.uk/portal/p/site_specific_allocations/ssadmp_iopadmp_0810?pointId=1280152361720

Consortium for Energy Efficiency (CEE) Strategic Energy Management Minimum Elements — CEE created this guide to describe “the minimum conditions that an industrial company or facility should have in place in order to effectively and continuously improve their energy performance”. The guide does not provide a series of different levels but establishes a highly useful benchmark for SEM at industrial facilities.

While some of the models had three levels, most used a five-level structure. The SEM model includes five levels of engagement, plus an additional “zero” level in which the organization is not engaged in energy management. We felt this division provided the appropriate granularity for the model. The number of components was selected to incorporate the best features of the various energy management systems that we reviewed. The components also incorporate the key elements of best practices in existing SEM programs.

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NORTHWEST ENERGY EFFICENCY ALLIANCE

The Northwest Energy Efficiency Alliance is a non-profit organization working to maximize energy efficiency to meet our future energy needs. NEEA is supported by and works in collaboration with Bonneville Power Administration, Energy Trust of Oregon and more than 100 Northwest utilities on behalf of more than 12 million energy consumers. NEEA uses the market power of the region to accelerate the innovation and adoption of energy-efficient products, services and practices. Since its inception in 1997, NEEA initiatives have saved enough energy to power more than 450,000 homes each year. Energy efficiency can satisfy more than half of our new demand for energy, saving us money, and keeping the Northwest a healthy and vibrant place to live. For more information visit neea.org

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EnerNOC is a leading provider of energy intelligence software and related solutions. Since 2001, EnerNOC has worked with hundreds of utilities, electricity retailers, and grid operators in both vertically integrated and restructured markets worldwide to design, implement, and manage successful, cost-effective demand response and energy efficiency programs. We provide energy suppliers with the technology, tools, and expert-based services they need to realize their DSM objectives. EnerNOC Utility Solutions™ offerings include a comprehensive portfolio of DSM program implementation and consulting services. Our implementation expertise is focused on helping utilities, grid operators, energy retailers, and other power suppliers develop and deliver cost-effective demand response and energy efficiency programs to the commercial, industrial, institutional and agricultural market segments. Our consulting expertise spans the full spectrum of DSM activities, including potential assessments, program design, measurement and evaluation, and engineering support.

STRATEGIC ENERGY MANAGEMENT MATURITY MODEL

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