Courtesy of Utility Dive

Dive Brief:

• The Public Utilities Commission of Texas has opened a new docket to consider changes to utilities’ energy efficiency and demand response goals, after the local Sierra Club chapter filed an Aug. 17 petition for rulemaking that proposes doubling utility peak demand reduction targets.
• The proposal would also set utility performance bonuses at a maximum of 10% of total net benefits. The conservation group has previously decried utility bonuses that can be equal to a third or more of their energy efficiency budgets.
• While Texas utilities are exceeding their peak demand and energy savings targets, those were last set a decade ago, according to Cyrus Reed, conservation director of the Sierra Club’s Lone Star Chapter. “That’s something we need to deal with. That’s not fair to the ratepayers who are paying for those programs,” he said Thursday at the PUCT’s open meeting.

Dive Insight:

Texas regulators have been working to overhaul the state’s wholesale markets in an effort to improve grid reliability, but conservation advocates maintain the changes largely overlook the simplest and most cost-effective solutions: using less electricity.

Independent market monitor Carrie Bivens, in an Aug. 16 report, warned that congestion costs and changes to the grid’s operating reserve demand curve have added billions to customer bills.

“Our petition, what it would do is double the peak demand goals that are required of utilities and also increase the energy efficiency overall savings goals, both for summer and winter,” Reed said. “We’re concerned about any solutions to the grid that’s going to put the burden on residential ratepayers, without offering solutions about how to lower those potential costs through energy efficiency, demand response and distributed generation.”

Sierra Club’s proposal was designed to be implemented in three phases, “with goals and metrics increasing modestly in a stagger-stepped approach in 2023, 2024 and 2025 to provide an opportunity to administrators and implementers to rev up their programs,” the group said in its filing.

The proposed rules include utility energy saving targets of 0.25% by 2023, 0.5% by 2024 and 1% by 2025. Peak demand reduction goals would be 0.5% of residential and commercial demand by 2024, and 0.7% by 2025.

Currently, Texas’ eight investor-owned utilities are proposing to reduce peak demand in 2023 by 531 MW, according to Sierra Club’s filing.

“While it is true that utilities have essentially doubled their required goals, the legislature and commission set these goals more than 10 years ago and neither the Legislature nor the Commission has tweaked them since 2012,” the group said.