1.1. Industrial /Agriculture/Large Commercial, Non-residential New Construction

1.1.1. Background

Industrial, Agriculture, and Large Commercial Programs

Because the industrial, agriculture and large commercial (IALC) programs deliver the majority of portfolio therm savings and a large percentage of electric savings, we are dedicating significant effort to impact, process, and market characterization work in these segments. The results from the impact studies are of primary importance in supporting savings potential and goals estimates, calculating greenhouse gas reductions, and for procurement purposes. The IOUs, third party implementers and stakeholders are also interested in the answers from impact, process and market studies as these will enable us to achieve all possible cost-effective savings, fully engage the relevant markets, ensure that ratepayer funds are spent wisely and achieve greenhouse gas emissions reduction goals.

The industrial, agriculture and large commercial (IALC) sectors are diverse in terms of customer type and savings opportunities. Energy efficiency in these sectors is largely served by statewide IOU programs as well as third-party programs targeted to specific markets or measures. The primary focus of the industrial and agricultural programs has historically been the realization of direct energy savings through projects that offer incentives based on calculated savings. Accordingly, the primary evaluation focus has been on ex post measurement and verification of program and measure impacts to produce estimates of both gross and net savings (kWh, kW and therms) as well as a better understanding of the market conditions faced by customers.

Programs Included in Research Scope

The utilities individually field statewide industrial, agricultural and large commercial calculated incentive programs. In addition, there are certain statewide non-resource programs common among the IOUs, as well as numerous third party programs that serve specified markets or technology users. Calculated incentive projects that fall within the scope of this research may also be implemented by local government partnerships, institutional partnerships, and Regional Energy Networks (RENs). Rather than list each program individually, the table below shows budgets and estimated savings for the statewide programs, and rolled up estimates for the IOUs’ third party programs. Any calculated incentive projects that may be implemented by the RENs fall under other types of programs, and therefore budget and savings are not included below.

The programs offered in 2015 are generally a carryover from the 2013-2014 portfolio period, which were generally similar to those offered in prior cycles. As in the 2013-2014 portfolios, in addition to energy savings the 2015 statewide programs are also directed toward meeting the energy management goals of the Strategic Plan through focused demand side management offerings and laying the groundwork for adoption of continuous energy improvement (CEI) by large, medium and small customers.

Since these sectors include customers that use large amounts of water in their activities, they provide program opportunities for combined water conservation and energy savings projects as well as opportunities for meeting the needs of agencies seeking greenhouse gas reduction through water conservation efforts. For these reasons, the IOUs were directed to include expanded efforts to address the water/energy nexus in their agricultural and industrial programs beginning in 2013. In 2014, a separate proceeding was initiated to address water-energy nexus issues.[1] A decision issued in 2015 adopted an avoided embedded energy water-energy cost effectiveness calculator that can be used in developing programs that benefit both utility ratepayers and water customers.[2]

Table 1. 2015 IALC Programs Savings and Budget Summary

Please note: the Program Savings and Budget Summary Tables will be updated before the Roadmap revision is finalized.

IOU / Program Name / Estimated KWh / Estimated KW / Estimated
Therms / Budget /
SCE / Industrial Energy Advisor / 120,509,751 / 0 / 0 / $1,794,545
SCE / Industrial Calculated Incentives / 68,568,511 / 1,495 / 0 / $4,212,157
SCE / Industrial Deemed Incentives / 0 / 792 / 0 / $1,555,273
SCE / Industrial Continuous Energy Improvement / 192,948,162 / 0 / 0 / $887,112
SCE / Industrial Third Party / 18,000,000 / 21,135 / 0 / $42,823,805
SCE / Agriculture Energy Advisor / 12,421,810 / 2,076 / 0 / $3,172,896
SCE / Agriculture Calculated / 4,535,772 / 361 / 0 / $1,136,820
SCE / Agriculture Deemed / 31,016,699 / 419 / 0 / $836,138
SCE / Commercial Calculated / 0 / 4,545 / 0 / $6,297,012
SCE / Commercial CEI / 38,669,945 / 0 / 0 / $1,269,525
SCE / Commercial SBD / 120,509,751 / 6,905 / 0 / $8,739,228
PG&E / Industrial Energy Advisor / 358,002 / 213 / 49,167 / $3,132,289
PG&E / Industrial Calculated Incentives / 27,978,459 / 3,734 / 3,337,558 / $13,763,312
PG&E / Industrial Deemed Incentives / 3,153,346 / 691 / 174,086 / $1,204,021
PG&E / Industrial Continuous Energy Improvement / 0 / 0 / 0 / $589,159
PG&E / Third Party Industrial / 56,200,225 / 6,535 / 2,050,215 / $20,899,617
PG&E / Agricultural Calculated Incentives / 24,661,234 / 5,242 / 1,501,966 / $10,240,375
PG&E / AG Deemed Incentives / 12,281,345 / 5,762 / 155,874 / $3,815,997
PG&E / AG Third parties / 14,902,779 / 2,123 / 227,964 / $8,227,091
PG&E / AG Energy Advisor / 23,899,261 / 3,369 / 35,604 / $4,259,648
PG&E / AG CEI / 0 / 0 / 0 / $506,988
PG&E / SW Commercial Calculated Incentives / 68,844,271 / 7,084 / 2,395,580 / $25,132,514
PG&E / Commercial SBD / 24,025,984 / 6,742 / 116,869 / $10,237,119
PG&E / Commercial Deemed / 54,697,637 / 9,466 / 909,969 / $18,922,890
PG&E / Commercial Energy Advisor / 7,960,408 / 3,104 / 1,217,783 / $5,979,427
PG&E / Commercial HVAC / 6,805,062 / 2,122 / 209,214 / $18,277,223
PG&E / Commercial 3P / 67,325,613 / 9,133 / 1,197,117 / $51,591,182
PG&E / SW COM CEI / 0 / 0 / 0 / $491,754
SDG&E / SW-IND- Benchmarking / 0 / 0 / 0 / $14,754
SDG&E / SW IND – Audits NonRes / 0 / 0 / 0 / $240,589
SDG&E / SW IND – Audits CIEEP / 0 / 0 / 0 / $440,859
SDG&E / SW IND – CEI / 0 / 0 / 0 / $254,062
SDG&E / SW IND -- Pump Test Services / 0 / 0 / 74,882 / $160,473
SDG&E / SW IND -- Calculated Incentives / 3,802,070 / 222 / 14,686 / $1,444,593
SDG&E / SW-IND-Deemed Incentives / 1,379,032 / 225 / 0 / $564,594
SDG&E / SW-AG- Benchmarking / 0 / 0 / 0 / $6,533
SDG&E / SW-AG Pump Test
Services / 0 / 0 / 0 / $138,307
SDG&E / SW AG – Audits / 0 / 0 / 0 / $106,599
SDG&E / SW-AG Calculated
Incentives / 1,901,035 / 111 / 37,441 / $623,270
SDG&E / SW-AG Deemed
Incentives / 689,416 / 112 / 7,960 / $257,877
SDG&E / SW COM – CEI / 0 / 0 / 0 / $382,462
SDG&E / SW—COM Pump Test Services / 0 / 0 / 0 / $159,392
SDG&E / SW COM Calculated Incentives / 42,488,109 / 1,778 / 880,197 / $11,082,732
SDG&E / SW-COM-Calculated Incentives-RCx / 5,853,670 / 160 / 820,940 / $3,231,960
SDG&E / SW-COM-Calculated Incentives-Savings by Design / 12,139,049 / 3,405 / 38,898 / $5,240,036
SCG / SW-IND-Energy Advisor / 0 / 0 / 0 / $615,730
SCG / SW-IND CE 109,061 I / 0 / 0 / 0 / $324,017
SCG / SW-IND-Calculated Incentives / 0 / 0 / 9,900,000 / $9,184,880
SCG / SW-IND-Deemed Incentives / 0 / 0 / 646,582 / $1,048,590
SCG / SW-AG-Energy Advisor / 0 / 0 / 0 / $39,703
SCG / SW-AG-CEI / 0 / 0 / 0 / $32,200
SCG / SW-AG-Calculated Incentives / 0 / 0 / 3,327,300 / $3,663,775
SCG / SW-AG-Deemed Incentives / 0 / 0 / 214,744 / $502,829
SCG / SW-COM CEI / 0 / 0 / 0 / $200,329
SCG / SW-COM-Calculated Incentives / 0 / 0 / 3,836,700 / $5,195,394
Total Statewide IALC / 1,068,526,408 / 109,061 / 33,379,296 / $315,151,656

Table 2. 2013-2014 IALC Programs Savings and Budget Summary

IOU / Program Name / Estimated KWh / Estimated KW / Estimated
Therms / Budget /
SCE / Industrial Energy Advisor / 0 / 0 / 0 / $3,671,003
SCE / Industrial Calculated Incentives / 120,509,751 / 14,798 / 0 / $18,173,825
SCE / Industrial Deemed Incentives / 68,568,511 / 19,873 / 0 / $9,416,633
SCE / Industrial Continuous Energy Improvement / 0 / 0 / 0 / $1,538,537
SCE / Industrial Third Party / 192,948,162 / 27788 / $43,509,480
SCE / Agriculture Energy Advisor / 18,000,000 / 0 / 0 / $5,921,087
SCE / Agriculture Calculated / 12,421,810 / 3,174 / 0 / $3,231,235
SCE / Agriculture Deemed / 4,535,772 / 1,437 / $936,322
SCE / Commercial Calculated / 150,257,234 / 25,441 / 0 / $16,087,060
SCE / Commercial CEI / 0 / 0 / 0 / $2,609,300
SCE / Commercial SBD / 85,050,000 / 15,120 / 0 / $17,823,294
PGE / Industrial Energy Advisor / 1,004,736 / 608.00 / 235,036.00 / $6,063,079
PGE / Industrial Calculated Incentives / 71,279,214 / 9,600.18 / 12,733,111.11 / $25,398,702
PGE / Industrial Deemed Incentives / 6,344,844 / 1,341.66 / 413,704.81 / $2,019,954
PGE / Industrial Continuous Energy Improvement / 0 / 0 / 0 / $1,022,797
PGE / Third Party Industrial / 78,628,794 / 11,549.84 / 13,381,851.92 / $50,690,708
PGE / Agricultural Calculated Incentives / 59,437,524 / 9,610.63 / 3,709,826.52 / $16,463,577
PGE / AG Deemed Incentives / 61,560,923 / 40,567.60 / 1,696,087.42 / $7,245,687
PGE / AG Third parties / 159,586,467 / 55,264.65 / 5,633,060.93 / $20,333,052
PGE / SW Commercial Calculated Incentives / 117,724,326 / 15,148.76 / 2,309,106.96 / $36,364,706
PG&E / Commercial SBD / $19,473,462
PGE / SW COM CEI / 0 / 0 / 0 / $840,083
SDGE / SW-IND- Benchmarking / 0 / 0 / 0 / $81,895
SDGE / SW IND – Audits NonRes / 0 / 0 / 0 / $200,079
SDGE / SW IND – Audits CIEEP / 0 / 0 / 0 / $795,346
SDGE / SW IND – Audits (TA) / 0 / 0 / 0 / $823,388
SDGE / SW IND – CEI / 0 / 0 / 0 / $900,998
SDGE / SW IND -- Pump Test Services / 0 / 0 / 0 / $30,463
SDGE / SW IND – Calculated Incentives / 11,039,522 / 1,318 / 312,192 / $3,338,913
SDGE / SW-IND-Deemed Incentives / 6,834,105 / 1027 / 36,428 / $1,420,649
SDGE / SW-AG- Benchmarking / 0 / 0 / 0 / $35,134
SDGE / SW-AG Pump Test Services / 0 / 0 / 0 / $362,856
SDGE / SW AG – Audits / 0 / 0 / 0 / $74,174
SDGE / SW-Ag Audits (TA) / 0 / 0 / 0 / $589,343
SDGE / SW-AG Calculated Incentives / 5,519,760 / 659 / 156,096 / $1,685,189
SDGE / SW-AG Deemed Incentives / 3,424,140 / 515 / 16,599 / $719,800
SDGE / SW COM – CEI / 0 / 0 / 0 / $1,270,010
SDGE / SW—COM Pump Test Services / 0 / 0 / 0 / $70,664
SDGE / SW COM Calculated Incentives / 93,835,934 / 11,202 / 3,109,836 / $26,009,238
SDGE / SW-COM-Calculated Incentives-RCx / 9,754,445 / 276 / 106,254 / $2,359,543
SDGE / SW-COM-Calculated Incentives-Savings by Design / 20,851,070 / 8442 / 751,496 / $10,732,410
SCG / SW-IND-Energy Advisor / 0 / 0 / 0 / $1,216,007
SCG / SW-IND CEI / 0 / 0 / 0 / $645,999
SCG / SW-IND-Calculated Incentives / 0 / 0 / 21,902,488 / $25,258,193
SCG / SW-IND-Deemed Incentives / 0 / 0 / 2,947,836 / $2,083,532
SCG / SW-AG-Energy Advisor / 0 / 0 / 0 / $78,013
SCG / SW-AG-CEI / 0 / 0 / 0 / $64,221
SCG / SW-AG-Calculated Incentives / 0 / 0 / 1,496,799 / $3,545,233
SCG / SW-AG-Deemed Incentives / 0 / 0 / 924,465 / $1,067,167
SCG / SW-COM CEI / 0 / 0 / 0 / $399,999
SCG / SW-COM-Calculated Incentives / 0 / 0 / 5,844,240 / $9,239,849
Total Statewide IALC / 1,359,117,044 / 274,761.32 / 77,716,514.67 / $403,931,888
Evaluation Role in Addressing Program Challenges and Uncertainty

Custom impact evaluations continue to find that the largest uncertainties in ex ante gross impact estimation are establishing baselines, screening for measure eligibility and accurately representing true operating conditions for individual projects. Related to the baseline issue is the tendency to mischaracterize the type of projects – for example, treating projects as early retirement opportunities or add-on projects, even when preponderance of evidence might suggest natural replacement of customer systems.

Other areas for focused ex ante gross impact improvement include key metrics and factors such as a current and comprehensive assessment of the following: market characterization, measure saturation, industry standard practice, effective useful measure life, and savings persistence. The evaluation also reviews whether programs are following best practices in modeling. The ex post evaluations and companion ex ante review activities focus on improvement in these areas for calculated (i.e., non-deemed or custom) offerings.

In addition, understanding the complexities of program influence on the customer decision-making process (net to gross), remains a very salient and crucial research challenge. To address this, field research is needed to arrive at ex post savings estimates that reliably account for and attribute all program influence, yielding net impact results that clearly inform program design, goals and supply forecasting, among other areas.

Beginning in the 2010-2012 portfolio period, CPUC staff implemented an ex ante parallel review process for calculated incentive projects. The intent of this process is to conduct collaborative review with the IOUs of savings calculations and program influence before an application is approved. This is intended to improve program effectiveness through changes in implementation processes and procedures. The ultimate goal, through these activities, is to bring the program realization rate as close to 1.0 as possible, thereby reducing uncertainty with respect to realized savings.

As in prior evaluations, the 2015 ex post evaluation of savings impacts will be coordinated with the custom project ex ante review activity to optimize evaluation efforts. The impact review and results will provide useful and timely project review and program design and implementation feedback to the utilities and third party program implementers.