10.16.20 - PAYS®, Energy Burdens, and WA's CETA
Policy and technology tools to complement and extend PAYS power to increase energy equity.
While the Pay As You Save system’s laudable people agnostic approach means it can serve everyone (from high to low income), we PAYS Pals are most interested in harnessing PAYS to serve those who truly need it first. However, the decision of “who in my service territory gets offered PAYS first” is up to the utility and its program operator. Some utility sponsors market their PAYS upgrade program to the entire service territory, letting customer/member signs-ups determine prioritization. In cases that involve the program operator EEtility, their utility partners target market to homes with the highest energy use per sqft or, if sqft data is not available, to the homes with the highest energy use within persistent poverty areas.
Since, for the present, the decision on how to wield the PAYS tool rests primarily with the utility, convincing the utility of the business case of serving this subset of the most burdened first is often a necessary step of any program pitch. Initial results indicate this is a good investment strategy for the utility because homes with higher pre-upgrade energy use and intensity produce higher percent reductions and higher total energy savings and are thus better investments. But, even when we convince the utility to prioritize high energy intensity homes with potentially high utility returns, we still leave out some people in dire need. For example, households that are so economically stressed that they curtail their energy use will be missed by this strategy. Washington State may have a solution.
The Washington State’s Clean Energy Transformation Act (See Section 12, excerpted in the attached) specifically requires their utilities to prioritize their programs to low-income and energy burdened households and compels them to measure and improve energy equity starting next year. If such legislation becomes the norm, PAYS will be well positioned as the best tool for regulatory compliance IF it can be combined with ways to easily identify energy burdened households and track progress toward reducing those burdens.
Such a tool, Energy Flywheel, now exists thanks to a fellow PAYS Pal, Hassan Shaban, and his company Empower Dataworks that can be used for visualizing and targeting highly burdened households.
Empower Dataworks has also developed a Quantitative Energy Equity framework with a set of indices defining and measuring energy equity performance for a utility and customer subsegments (see whitepaper and book a demo with him). We particularly like the Equity Gap, a measure of the total annual cost to the utility to levelize energy burdens to a target burden level.