From:Regiana M Sistevaris <>
Sent:Wednesday, June 7, 2017 1:33 PM
To:Poli, Patricia (LARA)
Cc:Jon C Walter; Thomas R Zelina; Jim Ault ()
Subject:RE: Seeking input from interested parties on two matters related to energy waste reduction potential
Pat, thank you for providing I&M the opportunity to comment on the EWR assessment. Pursuant to your request, below are I&M’s comments.
1. Additional data on energy waste reduction potential to inform staff’s assessment of the statewide energy waste reduction potential. Staff welcomes all input and data relative to the following suggested areas and any other data sources that interested parties believe would inform the staff’s statewide assessment of energy waste reduction potential: (1) increasing the incremental cost of incentives from 50% to 100%; (2) estimating optimum energy waste reduction potential by considering optimal program design including increased incremental incentive, increased program participation rates, inclusion of all low-income measures and inclusion of certain emerging technologies; and ( 3) estimating optimum potential by considering a scenario with an environmental constraint such as an emission reduction reflected as a high carbon price. Attachments 1 and 2 provide additional information related to this item.
Response:I&M prefers the development of its own energy waste reduction potential that would best reflect I&M customer demographics and service territory conditions. I&M specific potential will better align with EWR actual results used in I&M’s IRP. If a statewide energy waste reduction potentialis developed and relied upon for utility EWR planning, I&M requests sufficient flexibility to customize according to customer segments used to set targets. Further, I&M requests consideration and flexibility to utilize PJM capacity and energy prices forecasts for avoided cost determination, not a MISO avoided cost that reflects the rest of Michigan. Last, I&M requests consideration for“reasonableness” in potential to the extent that higher customer incentives do not directly equate or necessarily result in a certain percentage incremental participation in waste reduction participation and savings.
For a multi-jurisdiction utility such as I&M, I&M is constrained in EWR planning and resource selection based on both the TRC and UCT cost tests, not just the UCT. The sole reliance on the UCT may allow for high cost measures to be included where higher incentives are allowed to be offered. Many high cost measure do not pass the TRC so under a UCT/TRC balance point, there is a limit to how much and how many of the high cost measures can be included in a program that is cost effective. I&M will be differently constrained in relying upon both the TRC and the UCT tests.
2. Input on how to reflect energy waste reduction in the draft IRP modeling assumptions. Examples of the type of input requested are: (1) what are the EWR sensitivities to be considered in each draft scenario? (2) Should a supply curve be developed allowing energy waste reduction to be considered as a supply resource? and (3) should a certain level of energy waste reduction be ‘forced’ to be selected by the model in lieu of a supply side resource? See Attachment 3 for addition information on this item.
Response: EE should be modeled as a resource along with other resources, therefore a supply curve will be developed by each utility. Sensitivities used are overall Economic sensitivities and I&M prefers that EWR be an economic selection. In addition, the EWR resources within the IRP model are proxy resources that should not be considered or treated as specific EWR measures ultimately offered to the customers through various EWR programs. Under this IRP modelling treatment of EWR, forcing any certain amount of EWR resources inhibits economic selection where I&M is not supportive of forcing any level of EWR.
Regiana M. Sistevaris
Regulatory Consultant
Indiana Michigan Power Company
Indiana Michigan Power Center, Floor 25
Fort Wayne, IN 46801
Phone: (260) 408-3524 Audinet: 500-3524