1. 2019 Potential and Goals Study Workshop
February 21, 2019

2. Overview and Agenda Overview Agenda Items
The P&G Study is scoped with developing multiple scenarios of future market potential for energy efficiency programs.
Scenarios inform the CPUCs goal setting process.
Navigant does not make recommendations on which scenario the CPUC should pick to be the basis for goals.
Agenda Items
Scope
Approach to scenarios
What was done in 2017
Variables that influence scenarios
Draft 2019 scenarios
Discussion

3. Today’s discussion focuses on P&G Scenarios, not AAEE Scenarios
P&G Scenarios Scope
The 2019 P&G study will develop a total of four scenarios that inform the CPUC’s goal setting process. We refer to these as the P&G Scenarios:
One “reference” scenario that stems directly from the calibration process
Three additional alternate scenarios (informed by stakeholder input)
Additional scenario analysis will be conducted as part of the Additional Achievable Energy Efficiency (AAEE) analysis after the P&G study is finalized. AAEE Scenarios:
Feed into the California Energy Commission’s Integrated Energy Policy Report (IEPR)
Are built around the adopted IOU goals and informed by P&G Scenarios
Consider additional variables and policy context
Do not impact IOU goals
Today’s discussion focuses on P&G Scenarios, not AAEE Scenarios

4. Example Internally Influenced Example Externally Influenced
What’s a Scenario?
Key variables in the P&G model can fall within a range possibilities. Variables are grouped into two categories:
Internally Influenced - policies and program decisions that are under control of the CPUC and IOUs collectively,
Externally Influenced - those that CPUC and IOUs collectively do not have complete control over.
Scenarios allow us to explore different futures based on a combination of assumed policy interventions, program design decisions, and exogenous factors
Example Internally Influenced
Example Externally Influenced
Cost-effectiveness (C-E) test
C-E measure screening threshold
Incentive levels
Marketing & Outreach
Behavior, Retro commissioning & Operational (BROs) customer enrollment over time
IOU financing programs
Building stock forecast
Retail energy price forecast
Measure-level input uncertainties (unit energy savings, unit costs, densities)
Non-IOU financing programs
Enacting of Future Codes and Standards

5. Approach to P&G Scenarios
The Reference Scenario will be primarily informed by current program design and policy. It is meant to best represent “current and known future policy”
The three additional scenarios will be finalized in conjunction with CPUC
Objective of the alternate scenarios: make sure the results are most useful for policy decision making. As such:
P&G scenarios should focus on internally influenced variables
P&G scenarios will fix externally influenced variables to a single setting across all scenarios:
CEC Mid-case forecast for retail rates, population, building stock
Use DEER and workpaper values as is
One set of assumptions about future C&S

6. Scenarios from the 2017 Study
The 2017 P&G Study developed scenarios that were primarily focused around the cost effectiveness screen using different tests and different avoided costs
Focus on C-E tests was due to lack of a final GHG adder to be incorporated into the avoided energy costs
Program engagement was either set to a reference case or an aggressive case (in only one of the scenarios)
2017 Study Scenario
Cost Effectiveness Screen
Program Engagement
1: TRC | Reference
TRC test using 2016 Avoided Costs
Reference
2: mTRC (GHG Adder #1) | Reference
TRC test using 2016 Avoided Costs + IOU proposed GHG Adder
3: mTRC (GHG Adder #2) | Reference
TRC test using 2016 Avoided Costs + Commission staff proposed GHG Adder
4: PAC | Reference
PAC test using 2016 Avoided Costs
5: PAC | Aggressive
Aggressive

7. Candidate Scenario Levers - Descriptions
Potential Impact Applicability
Economic
Market
Cost-Effectiveness (C-E) Test
Different Cost-Effectiveness screening tests and/or thresholds yield different amounts of economic potential and cause the market potential model to incentivize different sets of measures. These only apply to rebate programs (excluding the LI program) ✔
C-E Measure Screening Threshold
Incentive Levels
Varying incentive levels will change both the cost-effectiveness of measures and their value proposition to customers.
Marketing & Outreach
Varying marketing and outreach levels impacts the rate at which technologies are adopted by customers.
BROs Program Assumptions
Enrolment in BROs programs is an input vector. Navigant can assume a conservative roll-out, or an aggressive roll-out of BROs programs
Financing Programs
IOU Financing programs help reduce the cost burden associated with efficient measure adoption.

8. Candidate Scenario Levers - Ranges
Range/Bounds
Lower
Upper
Cost-Effectiveness (C-E) Test
TRC, PAC, RIM, Societal*
C-E Measure Screening Threshold
0.85 for all measures
1.25 for all measures
Incentive Levels
Capped at 50% of incremental cost
Capped at 75% of incremental cost
Marketing & Outreach
Default calibrated value
Increased marketing strength
BROs Program Assumptions
Reference: Continued offering of existing BROs interventions and planned new interventions based on policy directions
Aggressive: Intervention penetration grows faster than the Reference Case and additional BROs not currently in CA utiltiy plans are included
Financing Programs
No savings claimed from financing programs**
IOU financing programs broadly available to Residential and Commercial customers
*Not fully defined by CPUC
** Consistent with 2017 P&G Study

9. Draft 2019 Scenarios
This is not intended to be considered final, but an initial proposal for stakeholders to consider and comment on.
Lever
Reference
Alternate 1
Alternate 2
Alternate 3
Cost-Effectiveness (C-E) Test
TRC
C-E Measure Screening Threshold
1.25 for all measures
1.0 for all measures
1.0 for all measures*
0.85 for all measures
Incentive Levels
Capped at 50%
Capped at 75%
Marketing & Outreach
Default calibrated value
Increased marketing strength
BROs Program Assumptions
Aggressive
Financing Programs
No modeled impacts
IOU financing programs broadly available to Res and Com customers
*If Alternate 1 results in a portfolio that is not cost effective (TRC less than 1.25), threshold will be moved back to 1.25

10. Discussion, Questions and Next Steps
Questions for stakeholder to consider:
What additional scenarios should be considered and why?
Do the majority of scenarios lie within a realistic policy framework under which CPUC could set goals?
What can be done to capture the essence of SB350 (doubling EE) within the scenarios?
What level of certainty is needed for future C&S to be included in IOU goals?
A useful way to submit comments: fill out your own table on slide 9 with your own suggested settings
Comments on due: February 28, 2019
Access slides and submit comments via the CPUC Public Document Archive (PDA)

11. contacts Amul Sathe Greg Wikler Julie Penning P&G Manager 415.399.2180
Greg Wikler
P&G Senior Advisor
Julie Penning
Modeling Lead
navigant.com