1. Presentation at the Energy Efficiency Programs Workshop
Taking Utility Energy Efficiency Programs to the Next Level in New Mexico
Howard Geller
Presentation at the Energy Efficiency Programs Workshop
Santa Fe, NM
Dec. 4, 2007

2. Electric Utility DSM Funding in the Southwest Continues to Grow
State
DSM program budget
(million $ per year)
2002
2004
2005
2006
2007 (est)
2008 (est) AZ 4 10 19 32 42 CO 11 21 24 18 25 NV 3 14 30 36 48 NM 1 UT 9 16 20 33 WY ~0
Region 29 54 70 93
127
166

3. Energy Savings Are Growing Too
Xcel Energy (CO) reducing electricity use by ~0.5% per year, but proposing to achieve savings of 0.75% per year
Rocky Mountain Power (UT) reducing electricity use by ~0.6% per year and still expanding programs and savings
Nevada Power Co. (southern NV) achieved savings of 0.7% in 2006 and expanding
Sierra Pacific Power Co. (northern NV) proposing to reduce electricity use by 1.0% per year during

4. Status of Decoupling and Utility Shareholder Incentives in the Region
Nevada utilities earn additional 5% ROI on equity portion of DSM expenditures
APS earns a bonus equal to 10% of net economic benefits, capped at 10% of expenditures
Colorado legislation directs PUC to provide utilities with a profit opportunity for both gas and electric DSM programs
Xcel Energy has proposed receiving a bonus equal to a small percentage of net economic benefits in both CO and NM

5. Status of Decoupling and Utility Shareholder Incentives in the Region
Questar Gas Co. has received approval of gas sales-revenue decoupling on a pilot basis in conjunction with implementing comprehensive gas DSM programs
Nevada legislation directs PUC to adopt decoupling for gas utilities

6. Recommendations for New Mexico
Expand utility energy efficiency programs significantly striving for savings of % of electricity sales each year
Provide utilities with a “carrot” – a performance-based financial incentive if they exceed certain energy savings targets
Adopt a shared savings approach whereby utilities are allowed to “keep” a small percentage of net economic benefits (or a small percentage of expenditures), with the % increasing as energy savings increase

7. Example of Potential Incentive Structure

8. SWEEP: Dedicated to More Efficient Energy Use in the Southwest
Resources available online at:
Howard Geller, Executive Director
Southwest Energy Efficiency Project (SWEEP)